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BusinessPolicyNotes08 - r Chapter 8 Strategy in the Global...

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Unformatted text preview: r Chapter 8 Strategy in the Global Environment 182 STRATEGIC MANAGEMENT Lecture 8 Dr. John Kraft Opening Case ·:·Evolution of Global Strategy at Procter and Gamble P&G ~C lIiD ulII*M .-n e:-.-..MtW*--'- National and Competitive Advantaae t: .~~~: ~1···"·; ~'~';'.-' .:, ,.:~"'. :', ..:'" w,," '~ '::'-~= :;-7 ; .~ . "~-, of~" .~)- Sowu: AdapIed 1iOIIIMrPona;""fhcCOiRpdrtift~tap:ofN.tions. ~ H --'JB .a -R ltW w , CowighIOHousl *'" Ml l irI ~.,. ••••-.-. 311 313 ~O •..•••••.• M il'IIiIl~.NrigtO _ Strategy in Action ·:·Finland's Nokia N O K IA Connecting People Cot¥ighIO......,.., MI In c:.np.ny..••••.•.••--..d. 312 ,,< The Global and National Environments International expansion represents a way of earning greater returns by transferring the skills and product offerings derived from distinctive competencies to markets where indigenous competitors lack these skills. The trend toward globalization has many implications: 1. Indusbies are becoming global in scope Industry boundaries no longer stop at national borders. 2. Shift from national to global markets This has intensified competition in industry after industry. 3. Steady decline in barriers to cross-border trade and investment This has opened up many once protected markets to companies based outside of them. Increasing Profitability Through Global ExpanSion ·:·Location economies • Economic benefits from performing a value creation activity in the optimal location • Effects- Can lower costs- Can enable differentiation • Caveats- Transportation costs and trade barriers- Political and economic risks ~ •••••.•.•••.. e-.,..,.", ••• ---- 315 183 ~OHaugfW:ln MIl in c:-.-.r.MrW* _ 3'. 1 .:. The experience curve • Serving a global market from one or a few plants is consistent with moving down the experience curve and establishing a low-cost position .:. Transferring distinctive competencies • Companies with distinctive competencies can realize large returns by expanding to global markets where competitors lack similar competencies and products .:. Leveraging the skills of global subsidiaries Competencies can be created anywhere within a multinationars global network of operations • Managers must establish an incentive system to encourage local employees to acquire new competencies • Managers must have processes in place to identify valuable new competencies and help transfer them within the company ~O""""""'~.AI"--.d.. "7 ~o~..-n~.""" _ "8 Opening Case ·:·Wal-mart in Global Expansion \VAL-MART 'tGt-:-- I ! ! : j r-"--l~\ . \ . I I j ~/ eop,rigHClHDilgt*ln •••• ~ .•••• r is II* - .d . ". ":.+H I - Pr_""'-I,~ CopyrVhI HicIu;t*ln •••.• eomp.ny. A IrVt*- . - I ....
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This note was uploaded on 05/12/2010 for the course MAN 6721 taught by Professor Kraft during the Spring '10 term at University of Florida.

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BusinessPolicyNotes08 - r Chapter 8 Strategy in the Global...

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