International Strategy

1
International Strategy

• BUSI 7130/7136
• Chris Shook, Ph.D.

2
AGENDA

• Lecture
• BRL Hardy

3
Drivers of Globalization

• Increased similarity of lifestyles
• Global communications
• Fast communication
• Pressures to reduce costs

4
Motivators

• Increase Market Size
• Achieve Acceptable ROI
• Achieve Economies of Scale
• Achieve Location Advantage

5
Choice of Entry Mode

• Exporting
• Licensing
• Franchising
• Joint Ventures
• Acquisition of Wholly-Owned Subsidiary
• Development of Wholly-Owned Subsidiary

6
Home country of origin is crucial to
International success
Factor Conditions
Basic Factors
- Land, labor
Advanced Factors
- Highly educated workers - Digital communications
Generalized Factors
- Capital, infrastructure
Specialized Factors
- Skilled personnel
7
Home country of origin is crucial to
International success
8
Home country of origin is crucial to
International success
9
Home country of origin is crucial to
International success
Firm Strategy, Structure Rivalry
Intense rivalry fosters industry competition
10
Advice from Porter

• Create pressures for innovation
• Seek out competitors as motivators
• Establish early warning systems
• Improve national diamond
• Welcome rivalry
• Globalize to tap selectively into sources of
  other nations
• Locate home base to support competitive advantage

11
International Corporate Strategy
Corporate-Level International Strategies
Multi-Domestic Strategy
Three Corporate Strategies
Global Strategy
Transnational Strategy
12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
(No Transcript)
16
(No Transcript)
17
International Corporate Strategy
When is each strategy appropriate?
High
Need for Global Integration
Low
Low
High
Need for Local Market Responsiveness
18
(No Transcript)
19
Do you REALLY have a global strategy?

• Global strategy
• cross subsidization of national market share
  battles in pursuit of global brand and
  distribution positions

20
Do you REALLY have a global strategy?

• Why?
• Loose bricks
• Necessity of understanding competitors strategic
  intent
• Labor and scale advantages are not sustainable
• Domestic competitors are NEVER safe

21
Do you REALLY have a global strategy?

• Implications
• Broader corporate concept of a product line
• Dont allocate resources by SBUs
• Dont allocate resources by country