Chapter 11a Strategy of International Business

Chapter 11a Strategy of International Business - 11-1Click...

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Unformatted text preview: 11-1Click to edit Master subtitle styleChapter 11The Strategy of International Business11-2IntroductionQuestion:What actions can managers take to compete more effectively in a global economy?Managers must consider the benefits of expanding into foreign marketswhich strategies to pursue in foreign marketsthe value of collaboration with global competitorsthe advantages of strategic alliances11-3Strategy and the FirmQuestion:What is strategy?A firms strategycan be defined as the actions that managers take to attain the goals of the firmTypically, strategies focus on profitability and profit growthProfitabilityrefers to the rate of return the firm makes on its invested capitalProfit growthis the percentage increase in net profits over time11-4Strategy and the FirmDeterminants of Enterprise Value11-5Value CreationQuestion:How do you increase the profitability of a firm?To increase profitability, value must be created for the consumerValue creationis measured by the difference between V (the price that the firm can charge for that product given competitive pressures) and C (the costs of producing that product)The two basic strategies for creating value are 1.differentiation 2.low cost11-6Strategic PositioningTo maximize profitability, a firm must pick a position on the efficiency frontier that is viable in the sense that there is enough demand to support that choiceconfigure its internal operations so that they support that positionmake sure that the firm has the right organization structure in place to execute its strategySo, a firms strategy, operations, and organization must all be consistent with each other in order to achieve a competitive advantage and superior profitability11-7Operations: The Firm as a Value ChainFirms are essentially value chains composed of a series of distinct value creation activities, including production, marketing, materials management, R&D, human resources, information systems, and the firm infrastructureValue creation activities can be categorized as 1.primary activities2.support activities 11-8Operations: The Firm as a Value Chain1. Primary Activities involves creating the product, marketing and delivering the product to buyers, and providing support and after-sale service to the buyers of the product2. Support Activities provides the inputs that allow the primary activities of production and marketing to occur11-9Operations: The Firm as a Value ChainThe Value Chain11-10Classroom Performance SystemAll of the following are examples of primary activities excepta)Logisticsb)Marketing and salesc)Customer serviced)Production11-11Organization: The Implementation of StrategyOrganization architecturerefers to the totality of a firms organization (formal organizational structure, control systems and incentives, organizational culture, processes, and people) Organizational structure refers tothe formal division of the organization into subunits...
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This note was uploaded on 09/23/2011 for the course ECON 101 taught by Professor Smith during the Spring '11 term at North Shore Community College.

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Chapter 11a Strategy of International Business - 11-1Click...

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