Slides%208%20Global%20Strategy - Strategic Management/...

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Strategic Management/ Strategic Management/ Business Policy Business Policy Slides 8 Global Strategy
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Questions About Global Competition Questions About Global Competition What is an international strategy? What is the value of global strategies? Why are some countries more competitive  than others in global competition? How do companies diversify internationally? How do you organize a global company?
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Value of Global Strategies Gain Access to New Customers for Current  Products or Services Disneyland Tokyo,  EuroDisney Gain Access to Low-Cost Factors of  Production Achieving global economies of scale in the  automobile industry Leverage Core Competencies E.g., Honda developing and leveraging its  competencies in producing motors for  motorcycles, automobiles, snow blowers and  lawn mowers. 
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Value of Global Strategies Value of Global Strategies “Stretching” to Develop New Core  Competencies E.g., Pepsi Restaurants trying to develop new  skills in upscale casual dining. Managing Corporate Risk As global capital markets become more  efficient over time, the benefit provided by  this corporate strategy diminishes.  
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International Business Strategy: A Typology Location of Production  Global integration: control Global Strategy Transnational Strategy International Strategy Multidomestic Strategy High Low Concentrated Dispersed
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Organization and drivers of performance Increasingly dispersed production means Fewer economies of scale (cost) But, (probably) lower transportation costs (cost) Local responsiveness (differentiation) More locations vulnerable to war, disasters, currency collapse (risk) But, no one unit as critical (risk) Higher costs of coordination (cost) But, lower costs from learning across production sites (cost) Less local responsiveness (differentiation) But, more control of reputation, marketing, quality (differentiation)
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This note was uploaded on 08/18/2011 for the course BADM 449 taught by Professor Fertig during the Spring '11 term at University of Illinois at Urbana–Champaign.

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Slides%208%20Global%20Strategy - Strategic Management/...

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