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INTERNATIONALCONTEXTDrItaO’Donovan1BeechgroveAssociatesOpportunitiesandOutcomesofInternationalStrategyExportingLicensingStrategicalliancesAcquisitionsEstablishmentofanewsubsidiaryInternationalbusiness-levelstrategyMultidomesticstrategyGlobalstrategyTransnationalstrategyIncreasedmarketsizeReturnoninvestmentEconomiesofscaleandlearningAdvantageinlocationIdentifyInternationalOpportunitiesExploreResourcesandCapabilitiesUseCoreCompetenceInternationalStrategiesModesofEntry2BeechgroveAssociatesOpportunitiesandOutcomesofInternationalStrategyBetterperformanceInnovationExportingLicensingStrategicalliancesAcquisitionsEstablishmentofanewsubsidiaryUseCoreCompetenceModesofEntryManagementproblemsandriskManagementproblemsandriskStrategicCompetitivenessOutcomes3BeechgroveAssociatesMotivationsforInternationalExpansionIncreaseMarketSharedomesticmarketmaylackthesizetosupportefficientscalemanufacturingfacilitiesReturnonInvestmentlargeinvestmentprojectsmayrequireglobalmarketstojustifythecapitaloutlaysweakpatentprotectioninsomecountriesimpliesthatfirmsshouldexpandoverseasrapidlyinordertopreemptimitators4BeechgroveAssociatesMotivationsforInternationalExpansionEconomiesofScaleorLearningexpandingsizeorscopeofmarketshelpstoachieveeconomiesofscaleinmanufacturingaswellasmarketing,R&Dordistributioncanspreadcostsoveralargersales’baseincreaseprofitperunitLocationAdvantageslowcostmarketsmayaidindevelopingcompetitiveadvantagemayachievebetteraccessto:RawmaterialsLowercostlaborKeycustomersEnergy5BeechgroveAssociatesInternationalBusiness-LevelStrategy:DeterminantsofNationalAdvantageFactorsofproduction:theinputsnecessarytocompeteinanyindustrylaborlandnaturalresourcescapitalinfrastructurebasicfactorsincludenaturalandlaborresourcesadvancedfactorsincludedigitalcommunicationsystemsandeducatedworkforce6BeechgroveAssociates7BeechgroveAssociates8BeechgroveAssociates9BeechgroveAssociatesInternationalBusiness-LevelStrategy:DeterminantsofNationalAdvantage:
Demandconditionscharacterizedbythenatureandsizeofbuyers’needsinthehomemarketfortheindustry’sgoodsorservicessizeofmarketsegmentcanleadtoscale-efficientfacilitiesefficiencycanleadtodominationoftheindustryinothercountriesspecializeddemandmaycreateopportunitiesbeyondnationalboundaries10BeechgroveAssociatesInternationalBusiness-LevelStrategy:DeterminantsofNationalAdvantageRelatedandsupportingindustries:supportingservices,facilities,suppliersandsoonsupportindesignsupportindistributionrelatedindustriesassuppliersandbuyers11BeechgroveAssociatesInternationalBusiness-LevelStrategy:DeterminantsofNationalAdvantageFirmstrategy,structure,andrivalry:thepatternofstrategy,structure,andrivalryamongfirmscommontechnicaltrainingmethodologicalproductandprocessimprovementcooperativeandcompetitivesystems12BeechgroveAssociates13BeechgroveAssociatesSource:MITSloan14BeechgroveAssociatesSource:MITSloan15BeechgroveAssociatesSource:MITSloan16BeechgroveAssociates17BeechgroveAssociatesInternationalCorporate-LevelStrategyNeedforLocalResponsivenessNeedforGlobalIntegrationLowHighLowHighGlobalstrategyTransnationalstrategyMultidomesticstrategy18BeechgroveAssociates19BeechgroveAssociatesInternationalCorporate-LevelStrategy:MultidomesticStrategyMultidomesticstrategyStrategyandoperatingdecisionsaredecentralizedtostrategicbusinessunits(SBU)ineachcountryProductsandservicesaretailoredtolocalmarketsBusinessunitsinonecountryareindependentofeachotherAssumesmarketsdifferbycountryorregionsFocusoncompetitionineachmarketProminentstrategyamongEuropeanfirmsduetobroadvarietyofculturesandmarketsinEurope20BeechgroveAssociatesInternationalCorporate-LevelStrategy:GlobalStrategyGlobalstrategyProductsarestandardizedacrossnationalmarketsDecisionsregardingbusiness-levelstrategiesarecentralizedinthehomeofficeStrategicbusinessunits(SBU)areassumedtobeinterdependentEmphasizeseconomiesofscaleOftenlacksresponsivenesstolocalmarketsRequiresresourcesharingandcoordinationacrossborders(whichalsomakesitdifficulttomanage)21BeechgroveAssociatesInternationalCorporate-LevelStrategy:TransnationalStrategyTransnationalstrategySeekstoachievebothglobalefficiencyandlocalresponsivenessDifficulttoachievebecauseofsimultaneousrequirementsstrongcentralcontrolandcoordinationtoachieveefficiencydecentralizationtoachievelocalmarketresponsivenessMustpursueorganizationallearningtoachievecompetitiveadvantage22BeechgroveAssociatesStrategicCompetitivenessOutcomes:
ReturnsInternationaldiversificationandreturns:firmexpandsthesalesofitsgoodsorservicesacrossthebordersofglobalregionsandcountriesintodifferentgeographiclocationsormarketsmayincreaseafirm’sreturnssuchfirmsusuallyachievethemostpositivestockreturnsfirmmayachieveeconomiesofscaleandexperience,locationadvantages,increasedmarketsizeandopportunitytostabilizereturns23BeechgroveAssociatesStrategicCompetitivenessOutcomes:InnovationInternationaldive
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