1 / 32

MBAD6197 Managing Multinational Enterprises

MBAD6197 Managing Multinational Enterprises. Dr. Victor Z. Chen ( WWW.CHENZITIAN.COM ) UNC Charlotte. Course website: http://www.chenzitian.net/teaching/MBAD6197/. CSA vs. FSA Contextual Boundedness.

vic
Download Presentation

MBAD6197 Managing Multinational Enterprises

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MBAD6197Managing Multinational Enterprises Dr. Victor Z. Chen (WWW.CHENZITIAN.COM) UNC Charlotte Course website: http://www.chenzitian.net/teaching/MBAD6197/

  2. CSA vs. FSA Contextual Boundedness • CSAs are home market-specific advantages that are generally supportive to all (most) firms serving the same market (e.g., same location, same industry). • Contextual boundedness is corresponding to each of the FSAs (e.g., a unique technology; a unique product). • A large population • A large population of graduates who use computers • A large population of graduates who use Macbooks • A large population of graduates who are skilled at using SAS Programs

  3. Chance Factor Conditions Demand Conditions Structure of firms and rivalry CSAs in certain industries/products The diamond model: Porter’s explanation of determinants of national competitiveness From Mike Porter’s The competitive advantage of nations.

  4. Human resources • Quality, skills, and cost • Physical resources • Land, water, mineral deposits, timber, hydro power sources, and fishing grounds • Knowledge resources • Scientific, technical, and market knowledge • Capital resources • Amount, type, and cost of financial resources • Infrastructures • Transportation, communications, health-care, etc. Chance Factor Conditions Demand Conditions Structure of firms and rivalry The diamond model: Porter’s explanation of determinants of national competitiveness

  5. Chance • Composition of the home demand • Various niches, buyer sophistication • The size and growth of the home demand • Internationalization of domestic demand Factor Conditions Demand Conditions Structure of firms and rivalry The diamond model: Porter’s explanation of determinants of national competitiveness

  6. Chance • Competitive downstream industries through efficient, early, or rapid access to cost-effective inputs; • Competitive related industries that can coordinate and share activities in the value chain • Competing products/services • Complementary products/services Factor Conditions Demand Conditions Structure of firms and rivalry The diamond model: Porter’s explanation of determinants of national competitiveness

  7. The ways in which firms are managed and choose to compete • The motivations of companies and their employees and managers • The competition intensity in the respective industry • Identify the industry SIC4 code (Mergent Online database) • Calculate the total market share % of the largest one and five existing competitors in this SIC4 code • The lower (higher) %, the less (more) competitive • Your FSAs compared to these leading competitors Chance Factor Conditions Demand Conditions Structure of firms and rivalry The diamond model: Porter’s explanation of determinants of national competitiveness

  8. Chance • Chance events are occurrences that are outside of control of a firm • New inventions • Political decisions by foreign governments (Brexit; Trump’s travel ban and withdrawal from TPP) • Wars • Significant shifts in world financial markets or exchange rates • Discontinuities in input costs such as oil shocks • Surges in world or regional demand • Major technological breakthroughs Factor Conditions Demand Conditions Structure of firms and rivalry The diamond model: Porter’s explanation of determinants of national competitiveness

  9. Government influences • Subsidies • Education policies • The regulation or deregulation of capital markets • The establishment of local product standards and regulations • The procurement of goods and services • Tax laws • Antitrust regulation Chance Factor Conditions Demand Conditions Structure of firms and rivalry The diamond model: Porter’s explanation of determinants of national competitiveness

  10. Clustering: Interconnection and Concentration of All These Factors Chance Factor Conditions Demand Conditions Structure of firms and rivalry CSAs in certain industries/products CSAs: Cluster-specific advantages

  11. An example: CSAs for American ICT multinationals such as Google.

  12. An example: CSAs for American ICT multinationals such as Google.

  13. An example: CSAs for American ICT multinationals such as Google.

  14. Silicon Valley • Chance events: • PC revolution • WWW revolution • Supporting industries and institutions: • HR intermediaries: e.g., Smart Valley Inc. • High-standard universities: e.g., Stanford • Information sharing networks: e.g., Enterprise Network; Software Industry Coalition. • Collective lobbyists for deregulation and low tax: e.g., Regulatory Forum; Council on Tax and Fiscal Policy Chance • Demand conditions: • Relatively richer consumers • Sophisticated buyers located in the founding district of ICT industries • Factor conditions: • Plenty of high-quality computer sciences and engineering graduates • Abundant VC capital network Factor Conditions Demand Conditions • Structure of firms and rivalry: • Information sharing across IT researchers is common • Risk-taking and entrepreneurship is a local culture embedded in the wild west California style • Government: • Public R&D funding: e.g., SBIR, DARPA, etc. • Public VCs: e.g., CalPERS • Tax exempt for selected VC activities. Structure of firms and rivalry CSA for ICT industries/products An example: CSAs for American ICT multinationals such as Google.

  15. Group Practice 1: • Question 1: In this situation, how do you expand the diamond model to capture Canada? • Question 2: What are the locational advantages for this cluster in the US? (list 1 example for each box/bubble of the diamond model) • Question 3: What are the locational disadvantages for this cluster in the US assuming the absence of Canada in the model? (list 1 example for each box/bubble of the diamond model) • Question 4: How do Canadian locational advantages contribute to this cluster? (list 1 example for each box/bubble of the diamond model) • Question 5: Can you organize all the above discussions into the model you created for Question 1? The rise of the Great Lakes area as a cluster of auto industry: An application of diamond model

  16. Group #1: From Single to Double Diamond Model The rise of the Great Lakes area as a cluster of auto industry

  17. 1. Factor conditions Population

  18. 1. Factor conditions Population density

  19. 1. Factor conditions Household income and diversity

  20. 1. Factor conditions Geographic centrality

  21. 2. Demand conditions Population

  22. 2. Demand conditions Household income and diversity

  23. 3. Supporting industries/infrastructures/institutions Transport of goods and resources

  24. 4. Competition/Rivalry US auto models (affordable for middle class, big size comfort, oil consuming) are unique in their own way, not much competition from European and Asian cars in early days

  25. 5. Government impact Safer oil/gas transport Strong state government/policy support Natural Gas Pipeline Safety Act 1968 Natural Gas Wellhead Decontrol Act of 1989 Energy Policy Act 1992

  26. 6. Chance events Discovery of oil in the Gulf areas through 1960-1980s

  27. GDP US$1.7 trillion GDP US$15 trillion 3 billion bbl per year just for running vehicles, not including production etc. Production vs. Consumption ml. bbl/day: US: 19 vs. 9.7 (-9.3) Canada: 3.9 vs. 2.2 (+1.7) An example: North Am auto industry (cont’d): Oil reserves in Canada; Oil pipelines between Canada and US; Auto industry in the US.

  28. Up to 58 hours closer Asia’s pacific ports 5 days LA-Long Beach An example: North Am auto industry Canadian railways and ports of entry/exist serving the US markets

  29. FTA since Jan 1988 NAFTA since Jan 1994 An example: North Am auto industry (cont’d) Free-trade agreement

  30. The double diamond: Regional integration of multiple countries CA auto parts suppliers (e.g., Magna International) China WTO 2001 e.g., petroleum and minerals; Prince Rupert and Vancouver in British Columbia as ports of entry CN and CP railways as inter-state transportation e.g., a decent market with high purchasing power Pacific gateway initiative Two potential chance events: Trans-Pacific Partnership Trans-Atlantic Partnership (NA)FTA since 1988 Keep the border open; energy policies e.g., abundant labor force; petroleum refinery; domestic pipelines e.g., the largest vehicle market with high purchasing power US auto parts suppliers LXL Pipeline and others

  31. The Big Picture for Preparing for your Final Presentation • 1. CSA/FSA and contextual boundaries, taking into account regional integration and/or subnational fragmentation; • 2. Foreign context/market search, taking into account regional integration and/or subnational fragmentation; • 3. Economic/financial, legal/political, and sociocultural risks, taking into account regional integration and/or subnational fragmentation; • 4. Projection of potential disruptors, and a CSA/FSA and contextual analysis of these disruptors. • 5. Final words on your strategic plans on entry mode, potential local partners, etc.

  32. Contact Victor Z. Chen Belk College of Business UNC Charlotte +1 (704) 687-7645 zchen23@uncc.edu www.ChenZitian.com Course website: http://www.chenzitian.net/teaching/MBAD6197/

More Related