International strategies
International strategies
Learning objectives
1.
2.
6.
7.
8.
International strategies
Outline
Introduction
References
Strategic analysis
3.
Analyse the
environment
Strategic
direction-setting
6.
Identify the
organisations
current vision,
mission and
strategic
objectives
Reassess the
organisations
vision, mission
and strategic
objectives
Analyse the
organisations
resources
Strategic
Strategic
implementation evaluation
Identify
opportunities
and threats
1.
4.
Strategic choice
7.
Formulate
strategies
to achieve
strategic
objectives
8.
9.
Implement
strategies
Evaluate
results
5.
Identify
strengths and
weaknesses
(Source: Robbins, S. P., Bergman, R., Stagg, I. and Coulter, M. 2009. Management, 5th edition, Pearson Education,
Australia: 276; and Robbins, S. P., Bergman, R., and Stagg, I. 1997. Prentice Hall, Australia: 248 ).
Introduction
An earlier topic examined strategy at the corporate level: that is, strategies
pursued by corporations with multiple businesses in different industries/
markets.
Introduction
A further reminder: What is strategy?
A strategy is a comprehensive plan or blueprint that sets out coordinated commitments and activities that will be implemented
in order to achieve strategic objectives.
(Hanson et al., 2014: 4-6)
Levels of strategy
Emerging
Use of the Internet and telecommunications to facilitate
easy global transactions
High potential global demand for consumer products and
services.
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Return on investment
Firm recovers investments in plant, capital equipment and R&D from the
larger international market
Economies of scale
Firm achieves optimal economies of scale and exploits core
competencies through resource use.
Multi-domestic strategy
Strategic and operating decisions are decentralised to the firms
business unit in each country
This strategy recognises that each countrys market may be very
different: therefore the need for local responsiveness is very high;
A multi-domestic strategy focuses on competition within each
country, supports product customisation and encourages competitive
response to local conditions. Hence the firms business in each
country behaves almost like an autonomous business in that country
(GMH)
Global strategy
Firm offers standardised products across country markets, with
competitive strategy being dictated by the home office:
Emphasis is upon economies of scale and exploiting innovations in
many markets (Apple, Nokia)
Requires resource sharing and coordination across country
boundaries (Apple, Nokia))
McDonalds restaurants pursued a global strategy during the last
century.
Transnational strategy
A transnational strategy seeks to achieve both global efficiency
and local responsiveness:
To achieve a competitive advantage in each country requires local
flexibility
Therefore, a transnational strategy involves conflicting goals of close
global coordination and local flexibility
Effective implementation of transnational strategy often produces
higher performance
McDonalds pursues a transnational strategy.
Regionalisation
One response to the liability of foreignness is to focus on regions where the
markets are more similar and some coordination and sharing of resources
would be possible.
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Political
risks
Economic
risks
Political
risks
Economic
risks
Management challenges:
Understanding local conditions in many different countries
Multiple risks involved when operating in many countries.
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Conclusion
Strategic decision-making is too complex for perfect
decisions to be made: they tend to be satisfactory rather
than optimal
A good choice today may be a poor choice tomorrow:
ongoing strategic decisions needed
strategy must be flexible enough to continue to change
Conclusion
Above all, strategic decision-making is a never ending
process of creation, trial and error, adaptation and
adjustment - at both business and functional strategic
levels - to ensure a firm remains competitive in this
era of rapid, volatile, discontinuous change!