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InternationalBusinessEnvironments Operations 15e GlobalEditionDaniels Radebaugh Sullivan 11 1 Chapter12 TheStrategyofInternationalBusiness Copyright 2015PearsonEducationLtd 11 2 LearningObjectives Evaluateindustrystructure firmstrategy andvaluecreationProfilethefeatures functions configuration andcoordinationofthevaluechainDescribehowandwhycompanieschoosetoclusterinclosegeographicproximityDescribehowrobotsinspecificandautomationingeneralchangehowmanagersinterpretthevaluechain Copyright 2015PearsonEducationLtd 11 3 LearningObjectives DiscusshowtheindustrychangeaffectstheeffectivenessofavaluechainCompareandcontrastthestrengthsanddrawbacksofarealityversusvirtualityindesigningthevaluechainExplaintheideasofglobalintegrationandlocalresponsivenessProfilethetypesofstrategiesusedbyMNEs Copyright 2015PearsonEducationLtd 11 4 Introduction TheRoleofStrategyinInternationalBusiness Copyright 2015PearsonEducationLtd 11 5 IndustryStructure LearningObjective Evaluateindustrystructure firmstrategy andvaluecreation Copyright 2015PearsonEducationLtd 11 6 IndustryStructure IndustrystructureinvolvestherelationshipsamongSuppliersofinputsBuyersofoutputsSubstituteproductsPotentialnewentrantsRivalryamongcompetingfirms Copyright 2015PearsonEducationLtd 11 7 IndustryChange IndustrystructurechangesbecauseofCompetitormovesGovernmentpoliciesShiftingpreferencesTechnologicaldevelopments Copyright 2015PearsonEducationLtd 11 8 IndustryStructure Strategy andValue Theindustryorganization IO paradigmpresumesthatmarketsdemonstrateperfectcompetitionwherenofirmorindustryconsistentlyoutperformsothersThepowerofinnovativeexecutivesbrightexecutivesexploitmarketimperfectionstooutperformrivalsStrategy shallmarksValueStrategy Copyright 2015PearsonEducationLtd 11 9 CreatingValue Valuethemeasureofafirm scapabilityofsellingwhatitmakesformorethanthecostsincurredtomakeitCreatevalueusingAcostleadershipstrategymakeproductsforalowercostthancompetitorsAdifferentiationstrategymakeproductsforwhichconsumersarewillingtopayapremiumprice Copyright 2015PearsonEducationLtd 11 10 TheFirmasaValueChain LearningObjective Profilethefeaturesandfunctionsofthevaluechain Copyright 2015PearsonEducationLtd 11 11 TheFirmasaValueChain Thevaluechainthesetoflinkedactivitiesthecompanyperformstodesign produce market distribute andsupportaproductThevaluechainconsistsofPrimaryactivitiesdesign make sell anddelivertheproductSupportactivitiesimplementprimaryactivities Copyright 2015PearsonEducationLtd 11 12 TheFirmasaValueChain PrimaryandSupportActivities Copyright 2015PearsonEducationLtd 11 13 TheFirmasaValueChain PrimaryandSupportActivitiesoftheValueChain Copyright 2015PearsonEducationLtd 11 14 ManagingtheValueChain Configurationdistributingvaluechainactivitiesaroundtheworldconcentratedputtingallvaluechainactivitiesinonelocationdispersedperformingdifferentvaluechainactivitiesindifferentlocationslocationeconomies Copyright 2015PearsonEducationLtd 11 15 ManagingtheValueChain Whenconfiguringthevalue considerWheretogoBusinessenvironmentalqualityInnovationcontextEconomiesofscaleLaborcostsLogisticsDigitization Copyright 2015PearsonEducationLtd 11 16 ManagingtheValueChain CoordinationlinkingthevaluechainactivitiesFactorsthatinfluencecoordinationOperationalobstaclesCorecompetenciesspecialoutlook skill capability ortechnologythatrunsthroughthefirm soperations threadingdisconnectedactivitiesintoanintegratedvaluechainSubsidiarynetworkssocialnetworks Copyright 2015PearsonEducationLtd 11 17 ChangeandtheValueChain Theconfigurationandcoordinationofavaluechainrespondstochangesincustomers competitors industries andenvironmentsEvenawellconfiguredandcoordinatedvaluechaincanbecomeobsoleteSo designinganddeliveringastrategyshouldbeanongoingprocess Copyright 2015PearsonEducationLtd 11 18 GlobalIntegrationvs LocalResponsiveness LearningObjective Explaintheideasofglobalintegrationandlocalresponsiveness Copyright 2015PearsonEducationLtd 11 19 GlobalIntegrationvs LocalResponsiveness Firmsfacetwoconflictingpressures PressuresforglobalintegrationtheprocessofcombiningdifferentiatedpartsintoastandardizedwholemaximizeefficiencyPressuresforlocalresponsivenesstheprocessofdisaggregatingastandardizedwholeintodifferentiatedpartsoptimizeeffectiveness Copyright 2015PearsonEducationLtd 11 20 PressuresforGlobalIntegration DriversofglobalintegrationTheglobalizationofmarketsTechnologyhelpsstandardizeconsumerpreferencesGlobalproductshavebecomepopularallowsforstandardizationofproductdesignTheefficiencygainsofstandardizationLocation scale andlearningeffectsWTOsupportsglobalstandards Copyright 2015PearsonEducationLtd 11 21 PressuresforLocalResponsiveness PressureforlocalresponsivenessisdrivenbyConsumerdivergenceculturalpredispositionhistoricallegacynationalismHostgovernmentpoliciesfiscal monetary andbusinessregulations Copyright 2015PearsonEducationLtd 11 22 WhenPressuresInteract Integration ResponsivenessGrid ByIndustry Copyright 2015PearsonEducationLtd 11 23 TypesofStrategy LearningObjective ProfilethetypesofstrategiesfirmsusedbyMNEs Copyright 2015PearsonEducationLtd 11 24 TypesofStrategy CharacteristicsoftheStrategyTypeUsedbyMNEs Copyright 2015PearsonEducationLtd 11 25 InternationalStrategy Internationalstrategyleverageacompany scorecompetenciesintoforeignmarketscriticalelementsofthevaluechainarecentralizedatheadquartersThestrategyworkswellwhenthefirmhascorecompetenciesthatforeignrivalslackthereislowpressureforglobalintegrationthereislowpressureforlocalresponsiveness Copyright 2015PearsonEducationLtd 11 26 MultidomesticStrategy Multidomesticstrategyemphasizesresponsivenesstotheuniquecircumstancesthatprevailinacountry smarketvalueaddedactivitiesareadaptedtolocalmarketsThestrategyworkswellwhenthereishighpressureforlocalresponsivenessthereislowpressureforglobalintegration Copyright 2015PearsonEducationLtd 11 27 GlobalStrategy GlobalstrategymakestandardizedproductsthataremarketedwithlittleadaptationtolocalconditionsexploitlocationeconomiesandcapturescaleeconomiesThestrategyworkswellwhentheMNEisthecostleaderthereislowpressureforlocalresponsivenessthereishighpressureforglobalintegration Copyright
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