MGNT 4670 CHAPTER 13 Strategy in Intl Bus. 2013

1 p 403 thevaluechainofthefirm thevaluechainofthefirm

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: rcentage increase in net profits over time Determinants of Enterprise Value Determinants of Enterprise Value ► To increase profitability and profit growth, firms can add value lower costs sell more in existing markets expand internationally Figure 12.1 p 403 The Value Chain of the firm The Value Chain of the firm Inputs to support primary activities Fig 12.4 p 406 Value-adding activities STRATEGY in INTERNATIONAL STRATEGY in INTERNATIONAL BUSINESS ► Two basic strategies for creating value and attaining competitive advantage (Michael Porter): lower costs of value creation and/or differentiate the firm’s product offering through superior design, quality service, functionality, etc. in order to increase perception of value by the customer ► Companies must choose a strategy and position themselves accordingly. In order to implement the chosen strategy, firms must: configure internal operations to support that position have the right organization structure in place to execute the strategy STRATEGY in INTERNATIONAL STRATEGY in INTERNATIONAL BUSINESS Example: Clear Vision ► Clear Vision, manufacturer and distributor of eyewear ► Early 1980’s Clear Vision realized it had to lower its costs by importing; ► Started by importing from manufacturers in Asia but was not satisfied with product quality and delivery; ► Determined it had to have its own facilities, so settled on Hong Kong as a location due to: low labor costs, skilled workforce, and tax breaks offered by Hong Kong government. STRATEGY in INTERNATIONAL STRATEGY in INTERNATIONAL BUSINESS Example: Clear Vision ► After time, industrialization of Hong Kong caused labor shortage and increase in wages, so manufacturing plant was moved to mainland China. Objective: lower costs ► At same...
View Full Document

This document was uploaded on 02/26/2014.

Ask a homework question - tutors are online