Focus on executional excellence and common quality standards Able to

Focus on executional excellence and common quality

This preview shows page 10 - 12 out of 14 pages.

Focus on executional excellence and common quality standards . Able to standardize and centralize manufacturing to capture full benefits of scale. → minimum efficient scale Usually adopt matrix structures with a dominant business unit or functional axis and a secondary geographical axis. Capturing local ideas is less critical, resulting in limited local partnerships and innovation being driven top-down. Example: GE Aviation, single product sold across geographies, e.g.m aircraft turbines. Local customizer Sell products or services that are carefully tailored to local customer needs across a variety of markets. Focus on market responsiveness. Strongly embedded values and “way of working” used to glue together decentralized organizations with diverse leadership. Develop a diverse senior leadership group through global rotational programs. Matrix structures balance complex relationships between corporate center and strong local/regional presence. Use a small number of standardized processes to manage performance and ensure best practice in key local processes. Example: GE Healthcare, speciality products to meet the current and future needs in specific markets, e.g. handheld ECG scanners in India and alarms for the elderly in the U.S. Global corporate strategies Drivers of global integration: Economies of scale Uniform service to global customers Global sourcing of raw materials, components, energy, and labor Converging consumer trends and universal needs, e.g. Coca-Cola and Nike Media that reaches customers in multiple markets, e.g. internet Drivers of local responsiveness Local customer needs, cultural differences, e.g. food and clothing
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Differences in distribution channels, e.g. small retailers in Japan Government requirements and regulations Export Strategy Company views international business as separate from, and secondary to, its domestic business Views international as an opportunity to generate incremental sales for domestic products Products designed with domestic customers in mind Company expects little knowledge flows from foreign operations Global Strategy Approach Headquarters seeks substantial control over country operations to minimize redundancy, and achieve maximum efficiency, learning and integration worldwide Products often the same everywhere Product and business managers often have worldwide responsibility R&D and manufacturing are centralized activities and management tends to see the world as one large marketplace Advantages Creates economies of scale Can lead to higher quality products and processes, primarily by simplifying manufacturing and other processes Disadvantages Hard to coordinate activities of widely-dispersed international operations Can lead to lack of responsiveness and flexibility in local markets Transnational Strategy Approach Firm strives to be more responsive to local needs while retaining sufficient central control of operations to ensure efficiency and learning
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