Assessing Internationalisation - Bartlett And Ghoshal - International Strategy. Flashcards
Risks to business developing internationally.
Operational/management risk. Political risk. Technological risk. Environmental risk. Economic risk. Financial risk. Customer satisfaction risk.
Outline operational management risk.
Manufacturing quality may not be consistent throughout countries.
Outline political risk.
The political will to import/export.
Regulations may me enorous.
Political instability - not fond of foreign investment.
Outline technological risk.
Emerging markets may not have the technological capability to manufacture the wanted quality.
Outline environmental risk.
Poor environmental controls abroad could lead to environmental damage.
Outline economic risk.
Exchange rate fluctuations, boom and bust cycles may be different.
Outline financial risk.
Lose money if setting up new factories in a volatile state.
Two main questions when deciding how to manage international operations
If overseas operation should have high degrees of independence.
Should products be kept similar to domestic markets or adapted to suit local tastes?
Factors to consider when answering the two questions in how to manage international operations.
Extent of differentiation between local markets and requirements of customer.
What would the costs be of adapting to local needs and demands.
What would cost benefits be (via economies of scale) of standardising products and selling the same products globally?
Level of ease to managing the business centrally from one market.
What does the bartlett and ghoshal model do?
Outlines choices available to managers when faced with choices about the best way to manage their business internationally.
Two main factors of bartlett and ghoshal
Level of pressure for local responsiveness.
Level of pressure for global intergration.
Outline pressure for local responsiveness.
How far do local tastes differ?
How much need is there to adapt to these local differences?
Outline global integration
What benefits of cost reduction would there be for operating globally?
What extent do economies of scale exist?
Outline bartlett and ghoshal matrix
Four options depending on two factors:
High global intergration & low responsiveness:
Golobal strategy.
High local responsiveness & high intergration:
Transnational strategy.
Low global integration and low responsiveness:
International strategy.
Low global integration and high local responsiveness:
Multidomestic strategy
Outline the four strategy options.
International.
Multi-domestic.
Global.
Transnational.
International works best when
There is very little difference between the demands of the domestic and foreign markets - little pressure to customise products.
What do international strategy businesses focus on?
Domestic operations.
With the international strategy, control is
Control is centralised - headquarters decide upon new product development.
How are products sold with the international strategy?
Products developed at home are sold abroad witn some, but not significant adaptions.
Which is viewed as more important, the international or domestic business?
The domestic business.
International strategy - how are products designed - how are international markets viewed?
Designed for the domestic market.
Viewed as a way to boost sales.
