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Global Business Environment

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Title: Global Business Environment


1
Global Business Environment
  • Prasada Reddy
  • Lund University, Sweden

2
Lecture - A definition
  • The art of transferring information from the
    teachers notes to students notes without it
    entering either ones mind.

3
Business Environment
  • 1) Liberalization of economic policies worldwide
    (import-substitution vs. export-led strategies).
  • 2) Changes in the technology paradigms/regimes.

4
Economic Liberalization 1
  • Greater role for private sector.
  • Liberalization of trade and investment policies.
  • International institutional mechanisms to
    reinforce liberalization trends (e.g. WTO, EU,
    bilateral agreements)
  • Sectoral policies affecting innovation (e.g.
    Intellectual property rights, clinical trials,
    etc.)

5
Economic Liberalization 2
  • International standards setting (e.g. ITU, UN)
    facilitated flow of goods and services.
  • Global harmonization of consumer preferences in
    some industries.

6
Technological changes 1
  • Changes in techno-economic paradigm
  • Emergence of new science-based pervasive
    technologies
  • Even old products incorporate new technologies
  • Multi-disciplinary inputs for innovations

7
Technological changes 2
  • ICT as a driver and facilitator of globalization
  • Companies that did incorporate new technologies
    faded away
  • Learning-by-doing approach to Learning-by-training
    approach
  • Vertical disintegration of value chains
  • Divisibility of innovation processes

8
(No Transcript)
9
Chip Design Flow Chart
Market Analysis Product Planning
Define Standards
(Upstream) Market Specification
System/Application Level Specification
Behavioral Level Design
?
RTL Level Design
Speed, Quality, Flexibility, Cost
?
IC Design Implementation Flow
EDA Software Support
Gate Level Design
?
Circuit Level Design
?
Physical Level Design
?
Post-Layout Verification
Asias Advantage
Foundry Manufacturing, Packaging and Testing
(Downstream) Process Technology
Advantage of Advanced Countries
Semiconductor Material, Manufacturing Equipment
10
Global competition 1
  • Increased competition (more global competition in
    domestic markets also)
  • Greater complexity in competition
  • Oligopolistic competition in major industries
  • Emergence of innovative small firms in niche areas

11
Global competition 2
  • Shorter product life cycles
  • Technology becomes the key factor of
    competitiveness
  • Increasing RD costs
  • Shortage of ST skills in advanced countries.
  • Access to global markets and resources

12
New Competitors
  • Entry of emerging economies as huge markets
  • Brazil, Russia, India and China (BRIC-group of
    countries) as arbitrators of the global economic
    developments
  • MNCs from the emerging economies
  • Local availability of ST skills
  • Low costs of operations

13
Corporate responses
  • Rationalization of corporate structures
  • World/regional product mandates
  • Global intra-organizational networks
  • Global inter-organizational networks (including
    with universities)

14
Implications for innovation 1
  • Centre-for-global innovations for global markets
    centralized in headquarters
  • Local-for local innovations for local markets
  • Locally-linked innovations in each location for
    global application
  • Globally-linked collaboration between different
    local units for global innovations (Barlett and
    Ghoshal, 1991)

15
Implications for innovation 2
  • Modularity and divisibility of innovation process
    (specialization within the innovation process)
  • Globalization of RD (including to emerging
    economies)
  • RD outsourcing
  • Emergence of technology markets and research firms

16
Implications for innovation 3
  • Outsourcing of RD to emerging economies
    (firms/universities)
  • Emerging Products for Emerging Markets (e.g.
    single-chip mobile phones low-cost car Nano)
  • Standards setting by China
  • Entrepreneurship in emerging economies

17
Implications for innovation 4
  • University spin-offs
  • Regional/national government policies
  • Cluster development/science parks
  • New sources of financing for innovation
  • Importance of intellectual property rights
  • Regional agreements and trade barriers
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