MGT704--China-WG-slides

1、Welcome,Course Coordinator: Dr Jane Craig,China Instructor: Dr Wayne Graham,Learning focus,Learning philosophy,The aims of these workshops are: to develop friendships with each other for your networks to learn from each others experiences to build skills in applying concepts to global strategy choic

2、es made by firms to model the skills evaluated in assessment tasks to provide opportunities to ask questions and receive formative feedback,Introductions ,My name is:,Please introduce yourself to the whole group.,The company I work with is:,My position within the company is:,Growing and internationa

3、lising a business,Complex international diversification,Emerging markets/ Emerging giants,MGT 704 Global Business Management course structure,Teaching Week: Drivers of globalisation International strategy concepts Internationalising the entrepreneurial firm Entering foreign markets Offshoring/BPO,Te

4、aching Week: Structures for complexity Managing global competitive dynamics Local firm responses to MNCs,Teaching Week: Borrowing and leveraging resources National competitive advantage Emerging giants from fast-growing emerging economies Review,MGT 704 Global Business Management weekly structure,Co

5、urse structure Section 1,Our meaning for Global strategy,Global strategy matters for managers,Globalisation affects firm choices,The two most extreme choices (globalisation or localisation) are rarely, if ever, feasible,100 markets -100 versions,Every market isolated localisation,All markets integra

6、ted total globalisation,100 markets -1 version,cliparts.co Bottles clip art - vector clip art online, royalty free & public ., Plastic drink bottle - Free Clip Art - DK Books,Should also fit with opportunities for value creation,Industry-based,Resources-based,selecting an attractive industry 5 force

7、s analysis using a competitive strategy generic strategies having core capabilities relevant for its positioning choice and the industry Resource based view Value chain analysis VRIO analysis,Industry-based analysis,Competitive forces: Porters 5 Forces,Industry Rivalry,Threat of New Entrants,Threat

8、of Substitutes,Bargaining power of Suppliers,Bargaining power of Customers,Competitive advantage,Porter, 1990,Competitive scope,Narrow target,Broad target,Cost,Uniqueness,Cost Leadership,Differentiation,Focused Low Cost,Focused Differentiation,Industry-based analysis,Generic strategies,Resource-base

9、d view,Resources, the determinants of competitive advantage include “all assets, capabilities, organizational processes, information, knowledge, etc controlled by a firm.” These resources enable the firm to create and pursue effective strategies Resource categories are . Financial capital Physical c

10、apital Human capital Organizational capital Barney 1991,Resource-based View,International expansion should deliver Capability leverage New opportunities to derive rents from existing capabilities, at relatively low risk Capability building Creates opportunities through exposure to new competitors an

11、d forms of competition Potential organisational learning,The value chain (Porter),Capabilities test - VRIO,Valuable: Do your firms competences/resources enable the firm to respond to threats or opportunities? Rare: How many competing firms already possess a particular competence/resource ? Inimitabi

12、lity: How hard ($/time) is it for others to copy your particular competence or resource ? Organization: Is your firm effectively organized to exploit the full competitive potential of its competences and/or resources ?,Ansoffs diversification matrix,VCP Model,MBV industry MBV geographic location MBV

13、 industry & geographic location,19,Globalisation - Key Guidelines,Select a specific foreign market to enter on the basis of strategic importance for globalisation as well as stand alone attractiveness Consider especially the home countries of major competitors/ customers Different countries can play

14、 different roles - Global Portfolio Analysis There are potential costs both qualitative and quantitative Structure (joint venture, strategic alliance, licence, franchise) may limit globalisation potential,Bartlett and Ghoshals typology,Global strategy elements,International expansion Increasing pres

15、ence in non-domestic locations Leverage assets in more markets (scope and scale) Tap into new assets and capabilities abroad, which can increase competitiveness Global integration High levels of coordination, giving global flexibility, cost optimisation,The “new” global strategy,An MNE integrates a

16、worldwide network of differentiated affiliates to exploit the best location for each value adding activity to deliver superior world-class value for money and highly flexible customer responsiveness (Tallman, 2001) An extension of Bartlett and Ghoshals transnational corporation Achieving global inte

17、gration and local responsiveness “think globally, act locally”,Global strategy choices should fit foreign market conditions - CAGE framework,Cultural distance Administrative distance Geographic distance Economic distance,Source: Ghemawat (2003),Ghemawats (2001) CAGE framework,Global strategy,Involve

18、s integrating competitive action across different countries, rather than adopting a country-by-country approach,With more isolation of markets,Select market on stand-alone attractiveness,Often termed “international” strategy,Select market on its contribution to global competitiveness,With more integ

19、ration of markets,Often termed “global” strategy,Yips Globalisation drivers,Market Cost Government Competitors,Per capita income converging World brands Convergence of tastes/ fashions Global advertising Channel amalgamation Lead countries,Globalisation drivers - market,Globalisation drivers - cost,

20、Economies of scale (and scope) Favourable logistics High product development Sourcing efficiencies Differences in country costs,Globalisation drivers - government,Reduced tariff barriers Reduced non-tariff barriers Trading blocs Reduced role of government as producer Shift to market economies Common

21、 marketing/technical standards,Globalisation drivers - competitors,High exports and imports Competitors globalized Interdependence of countries Transferable competitive advantage,Industries fall into categories based on their degree of globalisation, as measured by concentration of top four players

22、Carr & Collis (2011) Similar to Yip in focus on industry differences in globalisation Different in proposing four categories of industry globalisation and matching profit opportunities and matching strategy approaches,Global strategy patterns across industries,Global strategy choices should fit indu

23、stry conditions,Global oligopolies Innovation in developing new industry sectors (e.g. Google) Leverage scale and specialisation (e.g. Electrolux, Haier) Global consolidation through mergers and acquisitions (M&A) Global wars Strong threat to regional and national players (over-supply) Join forces w

24、ith a global leader Newcomers should innovate, not imitate incumbents Regional and national terrains Low scale economies and distance issues mean global strategy not feasible Shifting terrains Anticipate effects If deep pockets, may try to lead changes internal growth or acquisition?,Source: Carr an

25、d Collis (2011),Industry concentration patterns,Adapted from Carr & Collis (2011),Industry concentration patterns,Adapted from Carr & Collis (2011),Entrepreneurship defined: identifying and exploiting previously unexplored opportunities Includes activity by founders and owners of new businesses mana

26、gers of existing firms Entrepreneurial firms Often small, young firms But not necessarily,Internationalising entrepreneurial firms,Even though distance creates transaction costs CAGE framework Some EFs use international strategies for entering foreign markets Direct exporting Licensing or franchisin

27、g Foreign direct investment (FDI),Some entrepreneurial firms enter foreign markets,Others stay in domestic markets,indirect exporting through domestic-based export intermediaries supply to foreign firms doing business in ones home country licensee or franchisee of foreign brands alliance partners of

28、 foreign direct investors harvest and exit through sell-offs to foreign firms,Copyright 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.,How to Enter?Scale of Entry: Commitment and Experience,Large-Scale Entries Benefit from a strategic commitment Drawbacks of large-scale entries: Limited strategic flexibility and potential huge losses Small-scale entries Focus on accumulating experience “Learning by doing” Drawbacks of small-scale entr