Management Chapter 9: International Strategy and Globalization
International Strategy and
Globalization Globalization Globalization refers to the linkages between markets that exist across national borders. These linkages may be economic, financial, social, political, in effect, anything that leads to increased interdependence among nations. This implies that what happens in one county has an impact on occurrences in other countries.
International Strategy and
Globalization International Strategy Motives for international diversification: Organizational Factors - Role of senior management team - Firm specific-factors Environmental Factors - Unsolicited proposals - The bandwagon effect - Attractiveness of the host country
International Strategy and
Globalization A Globalization Framework - Ghoshal (1987) The Goals of a Multinational Corporation: 1. Achieving Efficiency 2. Managing Risks 3. Innovation, Learning and Adaptation
International Strategy and
Globalization A Globalization Framework - Ghoshal (1987)
International Strategy and
Globalization A Globalization Framework - Ghoshal (1987) The Sources of Competitive Advantage: 1. National Differences 2. Economies of Scale 3. Economies of Scope
International Strategy and
Globalization Types of International Strategy When competing in international markets organizations must decide: To what extent should they produce standardised products for sale in different countries utilising the locational advantages of low cost countries? To what extent should they produce differentiated products that embody variations in local tastes and preferences but incur greater costs? This is the debate between globalization and localization
International Strategy and
Globalization Types of International Strategy The issue of globalization versus responsiveness to local needs highlights four basic strategies open to the organization: Multidomestic Global International Transnational.
International Strategy and
Globalization Types of International Strategy
Figure 9.2 Characteristics of Multidomestic, Global and International Companies
Globalization The Diamond of National Advantage Porter (1990) Four attributes: 1. Factor Conditions 2. Demand Conditions 3. Related and Supporting Industries 4. Firm Strategy, Structure, and Rivalry
International Strategy and
Globalization Porters Diamond of Competitive Advantage
Figure 9.4 Determinants
of National Competitive Advantage
International Strategy and
Globalization The Myths of Global Strategy Rangan (2000) argues that there are seven common myths about companies considering a global strategy: 1. Any Company With Money Can Go Global 2. Internationalization In Services Is Different 3. Distance And National Borders Dont Matter Anymore 4. Developing Countries Are Where The Action Is 5. Manufacture Where Labour Costs Are Cheapest 6. Globalization Is Here To Stay 7. Governments Dont Matter Any More