Global Strategy Alphabet Frameworks

Global Strategy Alphabet Frameworks - Global Business...

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Unformatted text preview: Global Business Alphabet Models of D 102: Global Leadership Program Global Business H.V.C. Dimensions Heterogeneity x x Historical, social, economic, and political differences Differences in "institutions" which support business Volatility x & Risk Exchange rate fluctations x Inflation and factor prices Complexity x & Scale Voigt , 2010 2 Multiple national locations, customers, employyes BUAD 102: Global Leadership Program Global Business A.A.A. Framework Arbitrage x Buying cheap and selling high Adaptation x (Replication) Transferring a business model Collecting smaller amounts of demand across markets to achieve critical mass (minimum efficient scale) Voigt , 2010 3 Aggregation x BUAD 102: Global Leadership Program Examining Relevant "Distances" C.A.G.E. Global Business CAGE Framework (Ghemawat) x x x x Cultural Distance Administrative Distance Geographic Distance Economic Distance Global strategy must exploit/mitigate relative "distance" between the firm and the global market CAGE can be applied at the Country level, industrial sector, industry, and firm level GSBA 582: GLOBE Voigt , 2010 4 Global Business The "Radio" Model Framework W B M H Why go global? What is the motivation, goals, intended end outcomes? What does the firm bring (and what will "travel") to the global market opportunity? What must the firm build in the new market to be successful? What will/should/can the firm expect to meet when it goes global? How should the firm enter the global market? How should it organize itself? Source: WBMH is built on idea from Porter BUAD 102: Global Leadership Program Voigt , 2010 5 Global Business BUAD 102: Global Leadership Program Voigt , 2010 6 Arbitrage Global Business BUAD 102: Global Leadership Program Voigt , 2010 7 Replication ("No" adaptation) Global Business BUAD 102: Global Leadership Program Voigt , 2010 8 Global Business Adaptation BUAD 102: Global Leadership Program Voigt , 2010 9 Adaptation/Replication Global Business BUAD 102: Global Leadership Program Voigt , 2010 10 How far can a business model travel? Global Business BUAD 102: Global Leadership Program Voigt , 2010 11 Global Business Aggregating demand across markets BUAD 102: Global Leadership Program Voigt , 2010 12 Aggregating demand to lower administrative (back office) costs Global Business BUAD 102: Global Leadership Program Voigt , 2010 13 Global Business BUAD 102: Global Leadership Program Voigt , 2010 14 Arbitrage Global Business BUAD 102: Global Leadership Program Wal-Mart is the fifth largest trading partner in China Voigt , 2010 15 Adaptation/Replication Global Business BUAD 102: Global Leadership Program Voigt , 2010 16 Global Business BUAD 102: Global Leadership Program Voigt , 2010 17 Global Business BUAD 102: Global Leadership Program Voigt , 2010 18 Global Business BUAD 102: Global Leadership Program Voigt , 2010 19 Global Business BUAD 102: Global Leadership Program Voigt , 2010 20 Global Business BUAD 102: Global Leadership Program Voigt , 2010 21 Global Business BUAD 102: Global Leadership Program Voigt , 2010 22 Global Business BUAD 102: Global Leadership Program Voigt , 2010 23 Global Business The "Radio" Model Framework W B M H Why go global? What is the motivation, goals, intended end outcomes? What does the firm bring (and what will "travel") to the global market opportunity? What will/should/can the firm expect to meet when it goes global? How should the firm enter the global market? How should it organize itself? Source: WBMH is built on idea from Porter BUAD 102: Global Leadership Program Voigt , 2010 24 WHY? INHA Summer Program 2010 Why? Global Business Motivations/Imperatives 1. Growth Imperative: pursuing new sources of volume by finding "Q" in new global markets x for "Becoming" Global "Replication" of existing business model in new location pursuing low cost raw materials, labor, etc. 1. Efficiency Imperative: x "Arbitrage" is using involved in some way Minimum efficient scale may be bigger than any single market x economies of scale and scope x reducing distribution costs, inventory costs, etc Voigt , 2010 26 BUAD 102: Global Leadership Program Global Business Seeking Growth in China BUAD 102: Global Leadership Program Voigt , 2010 27 Global Business Manufacturing Efficiency BUAD 102: Global Leadership Program Voigt , 2010 28 Why? Global Business Motivations/Imperatives (Continued) 3. Knowledge Imperative: continuous learning markets change, consumer's tastes and needs change, competitors innovate and adapt, technology "jumps" Globalization of Customers: when customers start to go global, firms must keep pace with them or lose overseas and domestic business to new rivals 4. 5. Globalization of Competitors: Rivals may capture global first mover advantages Rival may be able to use multi-market presence to cross-subsidize an attack on a firm's home market Voigt , 2010 29 BUAD 102: Global Leadership Program Global Business BUAD 102: Global Leadership Program Voigt , 2010 30 Global Business ASIA : Siemens & Coke have jointly rolled out a truly trendsetting initiative in the largest mobile phone market in the world - CHINA this summer .This is a FIRST of its kind in China & possibly globally Conceptualized & executed by mobile2win - the wireless agency for brands this promotion features a "Coke ICY adventure" K Java game embedded in the 2128 Siemens handset . Consumers in China who purchase this 2128 SIEMENS phone get an opportunity to play this exciting Coke game & win great prizes.The concept drives interactivity with consumers for both the brands & brings home a new dimension in embedded games The concept of the game called " the Coke ICY adventure" is a exciting adventure where Siemens users have to help the TEEN HERO of this Coke game cross a treacherous desert successfully by avoiding obstacles like bandits , strange creatures & rocks & mirages .These obstacles can make him lose his precious choice of refreshment "Coke" & have him stranded in the desert . Every obstacle avoided gets users POINTS & users can submit their scores in this contest through SMS !!!!! The TOP 10 scorers over a period of time can win exciting prizes - the NEW S57 MMS phone from Siemens & 10 one year free supplies of Coke . To make the process simple -these scores can be submitted through the Siemens phone to the mobile2win SMS gateway -8558 .To make it competitive users also have a menu driven option that is inbuilt into the Siemens 2128 to query the mobile2win database with a simple SMS message to get the TOP 5 scores in CHINA sent to them on their mobiles . Sumanta Dutta ,Brand Director of Coke says " This WOW initiative is very relevant to Brand Coke as it reaches out to young mobile phone users on their mobile phones devices that are a VERY PERSONAL asset for most teens ." "In addition in Shanghai the Coke 600 ml bottles from early May carried a new LABEL DESIGN that highlights the exciting Coke ICY adventure game in the Siemens 2128 mobile phone ".Users who already have purchased the 2128 in previous months can still experience the excitement - by downloading the game from the Siemens WAP portal Kenny He ,Sr Product Mktg Mgr at Siemens Mobile said " This tie in with Coke allows us to create a delightful user benefit & enhances the consumers daily mobile life .We are targeting more such first -mover initiatives that delight consumers " This entire initiative is aimed at building a distinct & superior "INNOVATION" tag for both brands . The initiative shows promising early results with some consumers spending over 10 hours already in the first week to log in scores of as high as 68000 points !!!! Ranganath Thota ,CEO of mobile2win the wireless agency that conceptualized ,created & executed the complete project comments " We saw the opportunity of creating a NEW BRAND EXPERIENCE for consumers through these BEEGES ( BG's-Brand games) & were fortunate to have 2 like minded brands to work with ".BeeGee's are a new dimension in mobile entertainment & we will see more of them soon " This promotion has already got a whopping 40,000 plus score submissions !!! In addition to consumers who had the game EMBEDDED on their handset another 35,000 downloads of the game have taken place through the WAP portal -a huge number by any standards. BUAD 102: Global Leadership Program Voigt , 2010 31 Global Business BUAD 102: Global Leadership Program Voigt , 2010 32 BRING/ BUILD? INHA Summer Program 2010 Global Business Bring: What travels? Business Model Competitive Advantages Core Competencies and Capabilities Corporate Culture BUAD 102: Global Leadership Program Voigt , 2010 34 Bring/Build? Global Business Bases for Global Advantage Economies of Replication National Differences Non-Market Strategies Global Learning Economies Voigt, Mayer & Liebeskind, 2006 of Scale BUAD 102: Global Leadership Program Global Flexibility Economies of Scope Voigt , 2010 35 MEET? What is similar and what is different, and what is different within the similarities and difference? INHA Summer Program 2010 Global Business Country's Overall Attractiveness Size of market Growth rate Economic System BENEFITS ATTRACTIVENESS Political factors Economic underdevelopment Legal system COSTS Political Economic Legal BUAD 102: Global Leadership Program RISKS Voigt , 2010 37 Meet? Global Business Examining Relevant "Distances" CAGE x Framework (Ghemawat) Cultural Distance x Administrative Distance x Geographic Distance x Economic Distance Global strategy must exploit/mitigate relative "distance" between the firm and the global market BUAD 102: Global Leadership Program Voigt , 2010 38 Meet Question? Global Business Analyzing the Global Market: What will the firm meet? Regional Analysis Country Analysis Industrial Sector Competitiveness Analysis Industry Analysis Feasibility Analysis Market Potential Analysis Competitor Analysis BUAD 102: Global Leadership Program Voigt , 2010 39 Profitability Analysis Global Business Institutional & Business "Context" Business Strategy & Operations "Soft" Infrastructure "Hard" Infrastructure Country Factor Endowments Logistics Intermediaries Professions, Debt & Equity Credentialing Markets, Search Firms Venture Capital Schools, Banks & Financial Physical & Roads, Rail Property Universities, Institutions, & Ports Rights Security Training Regulators Specialized Consultants Accountants & Legal System Functioning Independent Legal System Land Labor Capital Markets Political & Social Systems Voigt , 2010 40 BUAD 102: Global Leadership Program Global Business GLOBE Voigt , 2010 41 Global Business GLOBE Voigt , 2010 42 Global Business GLOBE Voigt , 2010 43 Global Business GLOBE Voigt , 2010 44 Global Business GLOBE Voigt , 2010 45 Global Business GLOBE Voigt , 2010 46 Global Business BUAD 102: Global Leadership Program Voigt , 2010 47 Global Business BUAD 102: Global Leadership Program Voigt , 2010 48 Global Business GLOBE Voigt , 2010 49 Global Business GLOBE Voigt , 2010 50 Global Business GLOBE Voigt , 2010 51 Global Business GLOBE Voigt , 2010 52 Global Business GLOBE Voigt , 2010 53 Global Business GLOBE Voigt , 2010 54 Global Business GLOBE Voigt , 2010 55 Global Business GLOBE Voigt , 2010 56 Global Business The Market Pyramid Domestically focused but upwardly mobile Subsistence/ Marginal consumers Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Global Consumers Locallyfocused but with income Consumers outside the formal economy BUAD 102: Global Leadership Program Voigt , 2010 57 Meet? Diamond of Global Competitiveness Chance Firm Strategy, Structure, and Rivalry Global Business Factor Conditions Demand Conditions Related and Supporting Industries Source: Porter (1990) Government BUAD 102: Global Leadership Program Voigt , 2010 58 HOW? INHA Summer Program 2010 How? Global Business Four Basic Global Strategies High GLOBAL TRANSNATIONAL Efficiency, Global Scale, Low Cost, Global Integration INTERNATIONAL MULTIDOMESTIC Low Importance of Local Responsiveness BUAD 102: Global Leadership Program EXPORT -ING Low High Voigt , 2010 60 Global Business ENTRY STRATEGIES EXPORT ENTRY x Direct and indirect exporting CONTRACTUAL ENTRY x x Licensing/franchising, technical agreements Contract manufacturing, turnkey projects STRATEGIC ALLIANCES INVESTMENT ENTRY x Wholly owned subsidiaries Voigt , 2010 61 BUAD 102: Global Leadership Program Global Business BUAD 102: Global Leadership Program Voigt , 2010 62 ...
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