Six More Weeks of Winter

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Six More Weeks of Winter
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Globalization

• Are customers culturally/nationally diverse?
• Large percent of foreign revenue?
• Large percent of foreign assets?
• Are competitors global?
• Are owners, partners, suppliers global?
• How big is globalization?
• Whos doing it? Why?
• What are companies actually doing? Why?
• Who is successful? Why?

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Reasons to Go International

• Proactive Reasons
• Exploit factor-cost differences across countries
• Unique product
• Technological advantage
• Economies of scale
• Growing foreign markets
• Exclusive information
• Attack rivals on home turf

• Reactive Reasons
• Competitive pressure
• Overcapacity
• Declining domestic sales
• Saturated home market
• Under attack from foreign rivals

4
Going Global Effect on Bottom Line
ROI
Foreign Sales/ Total Sales
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FDI in the U.S.The New American Challenge

• Attractiveness test?
• Performance test?
• Diagnosis of barriers to competitiveness
• Scale
• Entry mode
• Competitive response

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FDI Modes and Choices
Scale Level Activity Type
None
Sales
Distribution
Full Scale
Partner Type
Other MNC
Local Firm
WOS
None
Govt.
Majority
Ownership
Minority
None
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Factors/Issues of Globalization
Economic
Cultural
Political
Legal
Competitive
Technology
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Challenge to Global Managers
Vision, Purpose, Goals
Strategy Intelligence
Cultural Interpreter
Learning, Cross-Pollination, Change
Structure Configuration
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Competitive Forces

• First-mover advantage eroding via local
  competition in foreign markets
• Great Lakes Juicee and MingLang juice in China
• Wal-Mart/Seiyu stores in Japan
• Market share dominance in U.S. under continuous
  attack by foreign rivals located here
• Toyota, Honda, Nissan, Mercedes, BMW
• Nestles, Grand Metropolitan, Unilever
• Made in AmericaWhos the Enemy?