International Business Strategy CoreReading Notes: Mike Peng‘GlobalStrategy’(2017)Key Term and InformationMNE (Multinational Enterprises)- firms that engage in foreign direct investment (FDI)bydirectly controlling and managing value-adding activities in other countries, often must adapt theirstrategies, products, and services for local markets.Globalizationbasically the close integration of countries and peoples of the world. Critics arguethat globalization undermines wages in rich countries, exploits workers in poor countries, grantsMNEs too much power, destroys the environment, and promotes inequality. (p18) Globalization canhelp enrich a country's economy, but also can lead to certain countries to seek rapid globalizationand lead to them exploiting certain factors such as labour laws etc. and has lead firms gainingpolitical power to influence a countries political situation to acquire certain benefits. (me)Semi globalization- suggests that barriers to market integration at borders are high but not highenough to insulate countries from each other completely…calling for more than one way ofstrategizing around the globe. (p20)Industry: A group of businesses or entities who of produce a similar line goods and services to sell.Strategy-centres around the time and performance. They are used to attain a certain realistic goalwithin a period and utilising numerous variable (my definition). A firm’s theory about how tocompete successfully. (Drucker) strategy is not a rulebook, a blueprint, or a set of programmedinstructions.A strategyentails a firm’s assessment at point A of its own strengths (S) and weaknesses (W), itsdesired performance levels at point B, and the opportunities (O) and threats (T) in the environment.(p9)Global Strategy (p17)-oProvide standardized products and/or services on a worldwide basis (i.e., traditional view)oAny strategy outside one’s home country (Realistic view)FDI (Foreign Direct Investment)-Emerging Economies/markets-refers to developing economies such as China India andMexico.oCommand 48% world tradeoContribute to 50% global gross domestic production,o40% global FDI outflowoAttract 60% global FDI inflowsThe Triad-The three main powerhouses of developed Economies in the world North America,Europe and JapanReverse Innovation-first adopted in emerging economies, it where the innovation flow isbottom up (simple, affordable and meet customer needs). Initially products were being simplifiedand lowered in price. However, this doesn’t always work as the product may still not meet customerneeds or still be too expensive.
Strategy tripod (pp.14-15)-three leading perspectives of business strategy based on strategy astheory:oindustry-based view-suggests that the strategic task is mainly to examine thecompetitive forces affecting an industry, and to stake out a position that is less vulnerablerelative to these forces. Focuses on Opportunities and ThreatsoResource-based view-largely concentrates on the internal Strengths and Weaknesses ofthe firm. This view posits that it is firm-specific capabilities that differentiate successful firmsfrom failing ones.