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International Strategy and Organization


... videos/games by an online retailer, or the final tune for a new car's engine. ... Sell unprofitable businesses. Stability Strategy. Guard against change and avoid ... – PowerPoint PPT presentation

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Title: International Strategy and Organization

International Strategy and Organization
Planning and Strategy
Identifying and selecting objectives and deciding
how to achieve those objectives
Set of planned actions that managers take to help
a company meet its objectives
Strategy-Formulation Process
Identify Mission and Goals
  • Mission statements must consider
  • Company activities
  • Business objectives
  • Stakeholders
  • Stockholders
  • Customers
  • Residents
  • Environment
  • and much more

Identify Core Competency
Special ability of a company that competitors
find extremely difficult or impossible to equal
Coordination of multiple skills
Lengthy period to develop
Difficult to imitate
Value-Chain Analysis
  • Divide company activities into primary and
    support activities and identify those that create
    value for customers

Each activity is a source of either strength or
Insights gained are fed into the strategy
formulation process
Value Chain Components
Primary Activities.
  • Inbound Logistics.
  • Here goods are received from a company's
    suppliers. They are stored until they are needed
    on the production/assembly line. Goods are moved
    around the organisation.
  • Operations.
  • This is where goods are manufactured or
    assembled. Individual operations could include
    room service in an hotel, packing of
    books/videos/games by an online retailer, or the
    final tune for a new car's engine.
  • Outbound Logistics.
  • The goods are now finished, and they need to be
    sent along the supply chain to wholesalers,
    retailers or the final consumer.

  • Marketing and Sales.
  • In true customer orientated fashion, at this
    stage the organisation prepares the offering to
    meet the needs of targeted customers. This area
    focuses strongly upon marketing communications
    and the promotions mix.
  • Service.
  • This includes all areas of service such as
    installation, after-sales service, complaints
    handling, training and so on.

Support Activities.
  • Procurement.
  • This function is responsible for all purchasing
    of goods, services and materials. The aim is to
    secure the lowest possible price for purchases of
    the highest possible quality. They will be
    responsible for outsourcing (components or
    operations that would normally be done in-house
    are done by other organisations), and ePurchasing
    (using IT and web-based technologies to achieve
    procurement aims).

  • Technology Development.
  • Technology is an important source of competitive
    advantage. Companies need to innovate to reduce
    costs and to protect and sustain competitive
    advantage. This could include production
    technology, Internet marketing activities, lean
    manufacturing, Customer Relationship Management
    (CRM), and many other technological developments.

  • Human Resource Management (HRM).
  • Employees are an expensive and vital resource.
    An organisation would manage recruitment and s
    election, training and development, and rewards
    and remuneration. The mission and objectives of
    the organisation would be driving force behind
    the HRM strategy.
  • Firm Infrastructure.
  • This activity includes and is driven by
    corporate or strategic planning. It includes the
    Management Information System (MIS), and other
    mechanisms for planning and control such as the
    accounting department.

Business Environment
National differences are inherent in analyzing a
companys unique abilities
  • Cultural differences
  • Political processes
  • Legal matters
  • Economic systems
  • Labor issues
  • Consumer forces
  • and much more

Multinational/Multidomestic Strategy
Adapting products and their marketing
strategies in each national market to suit local
  • Respond quickly to
  • buyer preferences
  • Difficult to exploit
  • economies of scale

Strategy and operating decisions are
decentralized to strategic business units (SBU)
in each country
Products and services are tailored to local
Business units in each country are independent of
each other
Assumes markets differ by country or regions
Focus on competition in each market
Prominent strategy among European firms due to
broad variety of cultures and markets in Europe
Global Strategy
Offering the same products using the
same marketing strategy in all national markets
  • Cost savings from
  • standardization
  • May overlook varying
  • buyer preferences

Products are standardized across national markets
Decisions regarding business-level strategies are
centralized in the home office
Strategic business units (SBU) are assumed to be
Emphasizes economies of scale
Often lacks responsiveness to local markets
Requires resource sharing and coordination across
borders (which also makes it difficult to manage)
Levels of Company Strategy
Growth Strategy
Increase the scale (size of activities) or scope
(kinds of activities) of operations
Internally generated growth
Mergers and acquisitions
Joint ventures
Strategic alliances
Retrenchment Strategy
Reduce the scale or scope of a corporations
Stability Strategy
  • Guard against change and avoid
  • growth or retrenchment
  • No opportunities or threats
  • Strengths fully exploited
  • Weaknesses fully protected
  • Stated objectives are met

Combination Strategy
Mix of growth, retrenchment, and stability
strategies across a corporations business units
Invest in promising units
Retrench for less exposure
Stabilize other units
Business-Level Strategies
Low-Cost Strategy
Exploit economies of scale to have the
lowest cost structure of any competitor in an
Mantra is cutting costs
Quality remains important
Scale is barrier for new entrants
Perhaps low customer loyalty
Differentiation Strategy
Design products to be perceived as unique by
buyers throughout an industry
Price premium
Customer loyalty
Portion of market only
Higher production costs
Focus Strategy
Focus on narrowly defined market segment by being
the low-cost leader, differentiating, or both
Many sub-segments today
Need distinctive product
Specific geography, ethnicity, etc.
Organizational Structure
Centralized decision making
Decentralized decision making
  • Coordination is paramount
  • Financial control and cost savings
  • Local responsiveness is key
  • Fast-changing environment

Arguments for Centralization
  • easier to coordinate
  • decisions consistent with organizational
  • means to push through major changes
  • avoids duplication of activities

Arguments for Decentralization
  • top management overburdened
  • more motivation at lower levels
  • more flexibility
  • better decisions on the spot by people directly
  • more accountability

International Division Structure
International Area Structure
Global Product Structure
Global Matrix Structure
Work Teams
Self-managed team Employees from one department
take on responsibilities of former supervisors
Cross-functional team Group of employees from
similar levels but different functional department
Global team Top managers from headquarters
and subsidiaries solve company problems
Malaysia Airlines
  • It is the mission of Malaysia Airlines System
    Berhad, as a corporation, to provide a transport
    service that ranks among the best in terms of
    safety, comfort and punctuality, distinguished
    and loved for its personal touch and warmth. We
    aim to set new world standards continually with
    our enhanced in-flight services, reliable ground
    support and excellent infrastructure and to
    respond to consumer demand for worldwide coverage.

  • Vision
  • "Our vision is to be the Communications Company
    of choice - focused on delivering Exceptional
    Value to our customers and other stakeholders
  • Mission
  • To achieve our vision, we are determined to do
    the following
  • Be the recognised leader in all markets we
  • Be a customer-focused organisation that provides
    one-stop total solution.
  • Build enduring relationships based on trust with
    our customers and partners.
  • Generate shareholder value by seizing
    opportunities in Asia Pacific and other selected
    regional markets.
  • Be the employer of choice that inspire
    performance excellence.