strategic mgt Session 08 - Global Environment

strategic mgt Session 08 - Global Environment - MGT 4195...

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MGT 4195 Strategic Management Fall 2010 Shanti D. Agung Georgia Institute of Technology
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The Global and National Environments 1. Industries are becoming global in scope 2. Shift from national to global markets intensifies competition 4 8 | 4 3. Steady decline in barriers to cross-border trade and investment creates opportunities
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s How does expanding globally enable companies to increase their profitability? 5
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GM’s Pontiac Le Mans s Marketed and sold primarily in the US s Designed: Germany ey components 6 s Key components manufactured: Japan, Taiwan, Singapore s Assembly operation: South Korea s Advertising strategy: UK
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Increasing Profitability Through Global Expansion s Location economies s Economic benefits from performing a value creation activity in the optimal location s Effects 7 s Can lower costs s Can enable differentiation s Caveats s Transportation costs and trade barriers s Political and economic risks
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Increasing Profitability Through Global Expansion (cont’d) s Cost economies from global volume s Economies of scale s Experience curve creases bargaining power with suppliers 8 s Increases bargaining power with suppliers
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Increasing Profitability Through Global Expansion (cont’d) s Leveraging products s Taking goods or services developed at home and selling them internationally ransferring distinctive competencies 9 s Transferring distinctive competencies
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Increasing Profitability Through Global Expansion (cont’d) s Leveraging the skills of global subsidiaries s Competencies can be created anywhere within a multinational’s global network of operations anagers must establish an incentive system to 10 s Managers must establish an incentive system to encourage local employees to acquire new competencies s Managers must have processes in place to identify valuable new competencies and help transfer them within the company
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HP Singapore s 1970, HP Singapore first factory s Manufactured basic components s 1973 s Transferred the manufacture of one of HP basic 11 hand-held calculators from US to Singapore s Keyboards, solid state displays, and integrated
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This note was uploaded on 01/25/2011 for the course MGT 4195 taught by Professor Aksha during the Fall '10 term at Georgia Tech.

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strategic mgt Session 08 - Global Environment - MGT 4195...

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