Justin Tumlinson Haas School of Business University of California, Berkeley Undergraduate International Business Disc

1. Justin Tumlinson Haas School of Business University of California, Berkeley Undergraduate International Business Discussion 201&202: Wednesday 12Aug09 Office Hour: 1:30-2:30P Fri, F533

3. Value can be Created through Low-Cost or Differentiation

4. Choosing A Strategy Four Basic Strategies

5. Global standardization strategy reaps cost reductions from economies of scale, learning effects & location economies Localization strategy customizes the firm�s goods or services to match to tastes in different national markets International strategy takes domestic market products and sells them internationally with minimal local customization Transnational strategy simultaneously achieves low costs through location economies, economies of scale, and learning effects differentiates the product offering across geographic markets to account for local differences fosters a multidirectional flow of skills between different subsidiaries in the firm�s global network of operations Management Focus: Vodafone in Japan Summary This feature explores the strategic decisions of Vodafone, the world�s largest provider of wireless telephone service, in Japan. Vodafone acquired J-Phone, the number three player in Japan�s wireless market, in 2002. However, after a series of questionable decisions, Vodafone sold J-Phone at a loss in 2006. Discussion of the feature can revolve around the following questions: 1. Why type of strategy was Vodafone trying to pursue when it acquired J-Phone? How did it hope this strategy would boost profitability and profit growth? Answer: Vodafone�s vision was to build a global brand using a phone that would work anywhere in the world. To achieve that vision, the company offered consumers a standardized product with the same technology regardless of where they were located. In theory, by offering the same basic product everywhere, Vodafone would not only capitalize on a brand name, it would also capitalize on a streamlined production process. Most students twill recognize this as a global standardization strategy. 2. Why did the strategy fail in Japan? What should Vodafone have done differently? Answer: Vodafone failed to recognize that consumers in different locations values different features. In Japan, the company was selling primarily to younger people who did not travel much, and did not value the global portability of the company�s phones. Instead, Japanese consumers were more interested in other features like games and cameras. In retrospect, Vodafone probably should have paid more attention to local preferences. The company delayed introduction of phones using 3G technology that would allow users to watch video clips and teleconference because it wanted to launch the technology only when it had a phone that would work inside and outside Japan. Management Focus: Vodafone in Japan Summary This feature explores the strategic decisions of Vodafone, the world�s largest provider of wireless telephone service, in Japan. Vodafone acquired J-Phone, the number three player in Japan�s wireless market, in 2002. However, after a series of questionable decisions, Vodafone sold J-Phone at a loss in 2006. Discussion of the feature can revolve around the following questions: 1. Why type of strategy was Vodafone trying to pursue when it acquired J-Phone? How did it hope this strategy would boost profitability and profit growth? Answer: Vodafone�s vision was to build a global brand using a phone that would work anywhere in the world. To achieve that vision, the company offered consumers a standardized product with the same technology regardless of where they were located. In theory, by offering the same basic product everywhere, Vodafone would not only capitalize on a brand name, it would also capitalize on a streamlined production process. Most students twill recognize this as a global standardization strategy. 2. Why did the strategy fail in Japan? What should Vodafone have done differently? Answer: Vodafone failed to recognize that consumers in different locations values different features. In Japan, the company was selling primarily to younger people who did not travel much, and did not value the global portability of the company�s phones. Instead, Japanese consumers were more interested in other features like games and cameras. In retrospect, Vodafone probably should have paid more attention to local preferences. The company delayed introduction of phones using 3G technology that would allow users to watch video clips and teleconference because it wanted to launch the technology only when it had a phone that would work inside and outside Japan.

6. The Evolution of Strategy Figure 12.8: Changes in Strategy over Time

7. Tradeoffs Exist in Any Market Entry Decision

8. There are Many Ways to Enter a Foreign Market

9. Selecting An Entry Mode

10. Microsoft Outsourcing Xbox Production

11. BreakExam Review Begins in 10 Minutes

12. Final Exam is Not Comprehensive, but Otherwise like a Longer Midterm

13. Review Strategy

14. Review Finance

15. Review HR & Marketing