Global Strategy And Structure Flashcards
What is international / global strategy?
Setting up a series of action or activities to achieve worldwide company goals
Goal of profit maximization
Creating profit requires creating consumer value
What are some generic competitive strategies
Cost leadership
Differentiation strategy
Focus niche
Blue ocean strategy
What is consumer value?
When the benefits outweighs the cost
What are three major strategic options for companies to change?
Redesigning Value chain
Reinventing the consumer value proposition
Ré defining the customer segment
What are the global strategies for firms to operate
Global strategy
- value chain activities are located in countries with the highest comparative advantage
Transnational strategy
- value chain activities mostly located in host country and some are sourced form other subsidiary of MNE global operations
International strategy
- most value chain activities are located in home country
Multi-domestic strategy
- most value chain activities are located in host country
What is the global strategy formulation process
- Global vision/mission/goal
- SWOT analysis
- Analyse global strategic options
- Design of international organizational structure
- International market selection and entry
What is the global vision or mission
Purpose/motive of global operations
Objectives and goals
What can the swot analysis can help identify
External environment
- opportunities and threats
Internal environment
-resources, capabilities, and weaknesses
What is the PEST analysis for external environment
Analysis of:
Political environment
Legal environment
Economic environment
Cultural environment
Technological environment
The industry analysis targets what elements of the external environment?
Entry barriers
Access and quality of supplier
Competition
Market size and buyer sophistication
Accumulated knowledge
What is the strategy and framework of a MNE
International value chain configuration + international organizational structure -> international/global strategy
What is international organizational structure
An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aim
Must evolve to accommodate internalization
Should be contingency based
Must “fit” with strategy
What is the most complex geographic structure?
Matrix
What do the transnational corporation and network structure enables MNE to do?
Utilize its capabilities and resources
Achieve economies of scale of a global corporation
Achieve local responsiveness of a domestic company
Transfer technology and knowledge across international operations
What are some control and coordination mechanism of international organizations
Direct coordinating mechanism
- design of appropriate structures
- use of effective staffing practices such as use of expatriates in subsidiary
- vertical intergration of subsidiary with HQ
Periodic head quarter visits to subsidiaries
Indirect coordinating mechanism
- financial statement
Sales quotas , budgets, and reports
What does the configuration of the value chain do
Decides which value chain activities to conduct internally offshore and which ones to outsource to external partners
Decide how to transfer organizational capabilities to offshore facilities
Decide how much authority to centralize at headquarters and how much to delegate to subsidiaries
Decide upon coordination acros subsidiary and hq as well as subsidiary to other subsidiaries
Provide necessary collaboration/intergration across subsidiaries and input suppliers
What does outsourcing internal operations do
Cost reduction
Take advantage of suppliers competence
Improve innovative capacity
Can concentrate on company’s inique competence
Highly flexible and open to change
Less resource commitment
Loss of control
Risk of losing core competence to supplier
Can be vulnerable to supplier dependency and increase supplier bargaining power
What does the offshoring of internal operations do?
Greater control
Less risk of losing core competence
Less dependent/ vulnerable to supplier bargaining power
High resource commitment
Economies of scale
Less flexible
How can one manage an effective monitoring system
Extensive communication between hq and subsidiaries
Reporting systems
Evaluation variables across countries
Use of information system for prompt accurate and continuous feedback
What are the entry strategy/organizational structure/international-global strategy matrix
Exports -> domestic with foreign department-> international strategy
Contractual arrangement -> international division -> international strategy
Joint ventures and strategic alliances -> global network structure -> transnational strategy
Green-field -> global product structure-> global strategy
Acquisition -> world wide geographic structure -> multi-domestic strategy
What did industry 4.0 impact on the firm’s global strategy and structure
Strategy
Structure
Business model
Value proposition
Market selection
Value chain
What elements of industry 4.0 had an impact on a firm’s global structure
Internet of things
Ai and data analytics
Robotics and drones
Additive manufacturing
Cloud computing
Block chain
