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Managing Global Expansion: A Strategic Approach

Dive into the concepts and strategies of global expansion, exploring the reasons, frameworks, choice of products, strategic markets, and modes of entry for international growth. Learn how to transplant corporate DNA, win local battles, and accelerate global expansion effectively.

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Managing Global Expansion: A Strategic Approach

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  1. Managing Global Expansion: A Conceptual Framework Strategic Management Summer, 2001

  2. Reasons for Global Expansion • Growth Imperative • Efficiency Imperative • Knowledge Imperative • Globalization of Customers • Globalization of Competitors

  3. Conceptual Framework • Choice of Product Line to Launch Globalization • What Factors Make Some Markets More Favorable than Other Markets? • Entry Mode Considerations • How to Transplant the Corporate DNA • Winning the Local Battle • Speed of Global Expansion

  4. Choice of Products • Develop Capabilities • Learn about foreign markets • Learn how to manage people in foreign locations • Learn how to manage foreign subsidiaries • Required Degree of Local Adaptation • Expected Payoffs from Globalization

  5. Choice of Strategic Markets • Strategic Importance of Market • Market Potential • Current market size • Growth expectations • Learning Potential • Presence of sophisticated and demanding customers • Pace at which relevant technologies are evolving • Ability to Exploit Market • Height of Entry Barriers • Intensity of Competition (Rivalry)

  6. Mode of Entry • Export or Produce Locally • Size of local market • Shipping and tariff costs • Need for local customization • Local content requirements • Complete Ownership Versus Alliances • Physical, linguistic and cultural distance • Need for operational integration • Risk of asymmetric learning • Availability of capital • Government regulations

  7. Mode of Entry • Entry Through Local Production • Greenfield Venture Versus Acquisition • Speed of entry • Extent of local competition • Post-merger integration • Uniqueness of corporate culture • Impact of entry on industry structure and competition

  8. Transplanting Corporate DNA • Core Elements of Business Model • Clarifying and Defining the Core Beliefs and Practices • Transplanting Core Beliefs and Practices to the New Subsidiary • Embedding Core Beliefs and Practices • Visible commitment from parent • Deepening education/re-education process • Demonstrate connection with success

  9. Winning the Local Battle • Winning Host Country Customers • Understand uniqueness of local market • Adapt business practices • Winning Against Host Country Competitors • Acquire dominant competitor • Acquire weak local competitor • Enter poorly defended niche • Engage in a frontal attack • Managing Relationships with Host-Country Government • Don’t ignore local government and other stakeholders

  10. Speed of Global Expansion • Ease of Replicating your Recipe for Success • Importance of Economies of Scale • First mover advantages • Management Capacity to Manage • Ability to leverage management experience • Goal is Directed Opportunism

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