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Mgt 485 Chapter 09

Mgt 485 Chapter 09. Strategic Planning. Additional Internet Sites. http://www.sls.wau.nl/vlk/pef/cpsm/pairdale.htm http://www.metalworld.com/a/view/0503.html http://www.aimnet.com/~mssm/sy283files/tankersley_p.html http://www.npr.gov/initiati/mfr/managebk.pdf

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Mgt 485 Chapter 09

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  1. Mgt 485Chapter 09 Strategic Planning

  2. Additional Internet Sites • http://www.sls.wau.nl/vlk/pef/cpsm/pairdale.htm • http://www.metalworld.com/a/view/0503.html • http://www.aimnet.com/~mssm/sy283files/tankersley_p.html • http://www.npr.gov/initiati/mfr/managebk.pdf • http://www.state.az.us/ospb/StratPlan.html • http://www.state.az.us/ospb/planning.html#Handbook • http://www.rba.co.uk/sources/index.htm • http://www.rba.co.uk/sources/stats.htm • http://www.carleton.ca/cifp/ • http://lcweb2.loc.gov/frd/cs/ • http://www02.imd.ch/documents/wcy/content/ranking.pdf • http://www.hbs.edu/projfinportal/countrydata.htm • http://www.eiu.com/ (No-cost registration required) • http://www.prsgroup.com/commonhtml/methods.html#_International_Country_Risk Very good discussion of risk factors • http://rob.customer.netspace.net.au/Activities/worldecosurv/worldsurv.html

  3. International Strategic Planning Strategic Planning:The process of determining an organization’s basic mission and long-term objectives, and then implementing a plan of action for accomplishing this mission and attaining these objectives

  4. 3 Central Management issues • Organizational Structure • Authority / Autonomy • Reporting relationships • Planning, Measurement, Control schemes • Standardization / Adaptation

  5. The Growing Need For Strategic Planning Examples: Ford Motors Bertelsmann AG Daimler-Chrysler A giant German book publisher GE Capital Services

  6. Approaches to Formulating and Implementing Strategy • Economic Imperative • Strategy based on Cost, differentiation, segmentation • Political Imperative • Country responsive strategies - protect local market niches • Quality Imperative • TQM - customer focus • Administrative Co-ordination • Strategic decisions based on individual situations

  7. Strategic Predispositions Ethnocentricallows the values and interests of the parent company to guide the strategic decisions Polycentric Tailored to suit the cultures of the countries where the MNC operates RegiocentricLeads a firm to try to blend its own interests with those of its subsidiaries on a regional basis Geocentric Tries to integrate a global systems approach to decision making

  8. Basic elements of strategic planning for international management Environmental Scanning Internal Resource Analysis Strategic Planning GOALS Implementation

  9. Environmental Scanning Attempts to provide management with accurate forecasts of trends that relate to external changes in geographic areas where the firm is currently doing business and/or considering setting up operations.

  10. Internal Resource Analysis Helps the firm to evaluate its current managerial, technical, material, and financial strengths and weaknesses A Key Success Factor(KSF) is a factor that is necessary for a firm to compete effectively in a market niche (defined by the Industry / Market – not the firm!)

  11. Strategy Implementation Provides goods and services in accord with a plan of action 1. The MNC must decide where to locate operations 2. The MNC must carry out entry and ownership strategies 3. Management must implement functional strategies in areas such as marketing, production, and finance

  12. Location Considerations for Implementation The Country: ex.) US company invests in Europe, Canada, Japan, Mexico... Specific Locale: ex.) Somewhere easily accessible and desirable

  13. Ownership and Entry Considerations for Implementation Joint Venture Franchising Fully Owned Subsidiary Export/Import Licensing

  14. Cultural Differences (Corning and Vitro Case) • What went wrong? • Vitro’s sales approach less aggressive • Cultural perceptions: • Mexicans thought Americans too forward • Americans believed Mexicans wasted time being polite • Americans perceived Mexicans unwilling to acknowledge problems and faults • Operations / Processes (Speed) • Mexicans thought Americans moved too quickly • Americans thought Vitro (Mexicans) moved too slowly • Clash of decision making styles

  15. Cultural Differences (Corning and Vitro Case) • Was the break-up handled properly? • Were the differences more pronounced in National culture or organizational culture?

  16. “Go East, Young People, Go East” p. 276 • What type of entry and ownership? • JV in Taiwan or S. Korea, produce on-site? • How Would partners use 4-P’s? • Must be determined on a country-by country basis • Existing product – demand forecast must be developed • Must assure reduction of trade (import) barriers • Must analyze price sensitivity • Promotion and place dictated by local conditions • Will Visions have problem coordinating production globally? • Inexperience of the firm? • Obtaining best inputs from around the world and producing components wherever most efficient. • Requires careful coordination

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