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Chapter 11a Strategy of International Business

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

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11-1 Click to edit Master subtitle style Chapter 11 The Strategy of International Business
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11-2 Introduction Question: What actions can managers take to compete more effectively in a global economy? Managers must consider the benefits of expanding into foreign markets which strategies to pursue in foreign markets the value of collaboration with global competitors the advantages of strategic alliances
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11-3 Strategy and the Firm Question: What is strategy? A firm’s strategy can be defined as the actions that managers take to attain the goals of the firm Typically, strategies focus on profitability and profit growth Profitability refers to the rate of return the firm makes on its invested capital Profit growth is the percentage increase in net profits over time
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11-4 Strategy and the Firm Determinants of Enterprise Value
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11-5 Value Creation Question: How do you increase the profitability of a firm? To increase profitability, value must be created for the consumer Value creation is 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 cost
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11-6 Strategic Positioning To 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 choice configure its internal operations so that they support that position make sure that the firm has the right organization structure in place to execute its strategy So, a firm’s strategy, operations, and organization must all be consistent with each other in order to achieve a competitive advantage and superior profitability
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11-7 Operations: The Firm as a Value Chain Firms 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 infrastructure Value creation activities can be categorized as 1. primary activities 2. support activities
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11-8 Operations: The Firm as a Value Chain 1. 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 product 2. Support Activities provides the inputs that allow the primary activities of production and marketing to occur
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11-9 Operations: The Firm as a Value Chain The Value Chain
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11-10 Classroom Performance System All of the following are examples of primary activities except a) Logistics b) Marketing and sales c) Customer service d) Production
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11-11 Organization: The Implementation of Strategy Organization architecture refers to the totality of a firm’s organization (formal organizational structure, control systems and incentives, organizational culture, processes, and people) Organizational structure refers to
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