International Strategic Management - PowerPoint PPT Presentation

1 / 22
About This Presentation
Title:

International Strategic Management

Description:

... by R. Dennis Middlemist, Professor of Management, Colorado State University ... Customers have common taste preferences. National Responsiveness. Segmented ... – PowerPoint PPT presentation

Number of Views:827
Avg rating:5.0/5.0
Slides: 23
Provided by: busi186
Category:

less

Transcript and Presenter's Notes

Title: International Strategic Management


1
International Strategic Management
  • Strategic Formulation and Implementation

Mark McKenna BUS 162 (6), International and
Comparative Management San Jose State University
Chapters 8, Hodgetts, Luthans and Doh,
International Management Culture, Strategy and
Behavior , 6th edition (New York McGraw-Hill
Irwin, 2006) Adapted from PowerPoint slides by
R. Dennis Middlemist, Professor of Management,
Colorado State University
2
Overview
  • Strategic Management
  • Approaches to Strategic Planning
  • Global vs. Regional Strategies
  • Elements of Strategic Planning
  • Specialized Strategies

3
Strategic Management
  • Strategic management
  • Determining the firms basic mission and
    long-term objectives, and developing and
    implementing an appropriate plan of action
  • Where are we going?
  • How are we going to get there?
  • Strategic management growing in importance
    because of the need to coordinate and integrate
    diverse operations

4
Benefits of Strategic Planning
  • Perceived benefits
  • Coordinate and monitor operations
  • Streamline product lines and supply chains
  • Manage political, currency, and competitive risks
  • Potential costs
  • Micromanagement of subsidiary operations
  • Misallocation of time and staff resources
  • Over-planning and lower profitability

5
Approaches to Strategic Planning
Economic Imperative
Administrative Coordination
Political Imperative
Quality Imperative
6
Economic Imperative
  • Strategy based on cost leadership,
    differentiation, and segmentation
  • Product mix
  • Value added in the upstream activities of the
    industrys value chain
  • generic good (not name brand or support service
    dependent)
  • Global sourcing to shorten the production or
    buying cycle

7
Political Imperative
  • Strategy country- responsive and designed to
    protect local market niches
  • Success of the product or service depends heavily
    on marketing, sales or service
  • Customer or client-focused
  • Approach most often used by MNCs pursuing a
    country-centered or multidomestic strategy.

8
Quality Imperative
  • Two possible paths
  • Change in attitudes to raise expectation for
    service quality
  • Implementation of practices to make quality
    improvement an ongoing process
  • Total quality management (TQM)
  • Cross-training personnel
  • Process re-engineering
  • Reward systems designed to reinforce quality

9
Administrative Coordination
  • Decision making based on the merits of the
    individual situation rather than a predetermined
    economic or political strategy
  • Coordination of global supply chains
  • Localized marketing of products and services
  • Least common approach given the pressures on MNCs
    to coordinate strategy both regionally and
    globally

10
Global vs. Regional Strategies
  • Global Integration
  • Products and services homogeneous in terms of
    type and quality
  • Customers have common taste preferences
  • National Responsiveness
  • Segmented regional markets
  • Need to respond to differing national standards
    and regulations
  • Adaptation of tools and techniques to manage
    local workforces

11
Four Strategic Options
Global strategy
Transnational strategy
International strategy
Multi-domestic strategy
Adapted from Figure 81 Global Integration vs.
National Responsiveness
12
Choosing an Option
  • The right strategy is tailored to particular
    country and industry characteristics
  • Reasons to choose each strategy
  • Global low-cost strategy, commodification
  • Multi-domestic products and services
    differentiated by market
  • International core competencies set the MNC
    apart from local competitors
  • Transnational
  • Require management of contradictory pressures for
    cost reductions and differentiation
  • Successful firms engage in glocalization,
    localizing their activities while maintaining a
    global focus

13
Elements of Strategic Planning for International
Management
External Environmental Scanning for MNC
Opportunities and Threats
Internal Resource Analysis of MNC Strengths and
Weaknesses
Strategic Planning Goals
IMPLEMENTATION
Adapted from Figure 82 Basic Elements of
Strategic Planning for International Management
14
Environmental Scanning
  • Provide management with accurate forecasts of
    trends that relate to external changes in
    geographic areas where the firm is currently
    doing business or considering setting up
    operations
  • These changes relate to the economy, competition,
    political stability, technology, and demographic
    consumer data

15
Internal Resource Analysis
  • Evaluate managerial, technical, material, and
    financial strengths and weaknesses
  • Determine ability to take advantage of
    international market opportunities
  • Match external opportunities (environmental scan)
    with internal capabilities (internal resource
    analysis)
  • Key question Do we have the people and resources
    that can help us to develop and sustain the
    necessary KFSs, or can we acquire them?

16
Strategic Planning Goals
  • Goal formulation often precedes the first two
    steps
  • However, more specific goals come out of external
    scanning and internal analysis
  • Typically serve as an umbrella for subsidiaries
    and international operations
  • Profitability and marketing goals almost always
    dominate
  • Once set, the MNC will develop specific
    operational goals and controls for the subsidiary
    or affiliate level

17
Implementation
  • Selecting a country and location
  • Country factors market openness, infrastructure,
    labor market flexibility
  • Location incentives, workforce, costs
  • Functional areas
  • Marketing usually country specific
  • Production domestic to foreign, foreign to
    domestic, or foreign to foreign, dispersed or
    coordinated
  • Finance local sources, centralized control,
    international markets, or barter trade

18
Specialized strategies
  • First-Mover Strategies
  • Bottom of the Pyramid Strategies
  • Born-Global Strategies

19
First-Mover Strategies
  • Useful in rapidly changing markets
  • Market opening in developing economies
  • Market reforms in transition economies
  • Privatization of state-operated enterprises
  • Advantages and risks
  • Capture benefits of learning
  • Form alliances with attractive local partners
  • Uncertain pace of reform
  • Opportunity costs of premature entry

20
Base of the Pyramid Strategies
  • Targeting emerging market
  • People making less than 2,000 p/year (4 billion)
  • Marketing requires smaller-scale strategies
  • Building relationships with local governments,
    small entrepreneurs, and nonprofits
  • Less dependence on central governments and large
    local companies

21
Born-Global Firms
  • Engage in significant international activity a
    short time after being established
  • Successful firms leverage a distinctive mix of
    orientations and strategies
  • Global technological competence
  • Unique-products development
  • Quality focus
  • Leveraging of foreign distributor competences

22
Implications for Managers
  • The complexity and interdependence of the global
    economy increases the need for firms to plan
    strategically
  • Effective strategies must balance tensions
    between
  • Top-down and bottom-up strategies
  • Economies of scale and differentiation
  • Managers need to anticipate the future evolution
    of the firm and global markets
Write a Comment
User Comments (0)
About PowerShow.com