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11. Global strategies and international advantage

11. Global strategies and international advantage. Outline. Terminology of International Business The Context of International Strategy National Competitive Advantage The Internationalization Process From International to Global Strategies The Drivers of Globalization. Outline (continued).

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11. Global strategies and international advantage

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  1. 11. Global strategies and international advantage

  2. Outline • Terminology of International Business • The Context of International Strategy • National Competitive Advantage • The Internationalization Process • From International to Global Strategies • The Drivers of Globalization

  3. Outline (continued) • Global vs. Local • Strategic Choices • The Best of Both Worlds • Strategy and Organization • Managing International Organisation

  4. The Terminology of International Business • International Business: Transactions across national borders. • International Trade: exporting and importing • Foreign Direct Investment: capital invested in other nations by firms through their control of foreign subsidiaries and affiliates. • Multinational Enterprises: Companies with subsidiaries located in more than one country, normally restricted to the largest international firms.

  5. World Trade 2000

  6. USA: Inward and Outward FDI 1999

  7. Determinants of National Competitive Advantage

  8. The Internationalization Process

  9. Determinants of Globalization

  10. Multidomestic Strategy Competition in one country is independent of competition elsewhere. Markets in each country have different consumer behaviour. Product diversity. Portfolio of independent subsidiaries Global Strategy Competition in one country influenced by competition elsewhere. Markets and consumer behaviour broadly similar in all countries. Product standardisation International coordination and integration. From International to Global Strategy

  11. Drivers of Globalization

  12. Strategic Choices

  13. Transnational Strategies “Exploit experience-based cost economies and location economies, transfer distinctive competences within the company, and at the same time pay attention to pressures for local responsiveness” (Bartlett and Ghoshal, 1989)

  14. Alternative Organizational Solutions

  15. The Flagship Firm

  16. Advantages Combines product specialisation with geographical market knowledge. Overcomes silos and duplication by direct contact. Effective when there is clarity, continuity and consistency through the organization. Disadvantages Extends decision-making time. Dual reporting can confuse responsibilities and priorities. May engender conflict. May make performance assessment ambiguous. The Matrix Structure

  17. Evolution of International Structure

  18. Concluding Remarks • International strategy is a significant extension of the logic of competitive advantage. • International trade and national competitive advantage are key parts of the business environment • International trade underpinning internationalization. • Globalization promoting international standardization.

  19. Concluding Remarks (continued) • International business strategy involves the management of standardization and differentiation. • Attempts to gain the ‘best of both worlds’ have involved • Transnational strategy • The matrix structure • The flagship firm

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