Strategy and organisation Flashcards
Strategy
planned actions to best use firm’s resources and core competences to gain C.A.
International Strategies
help firm allocate scarce resources through: value adding activities on worldwide scale, go into major markets, valuable partnerships abroad, competitive moves in response to foreign rivals
How to build sustainable competitive advantage?
Efficiency=
- international value chains
- lowering costs of operations and activities
Flexibility
- worldwide flexibility → accommodate diverse country specific risks and opportunities
- tapping local resources and opportunities
- adapt marketing and country conditions
Organisational Learning
- ability to learn from international environments and use on worldwide basis
What is essential for building a successful firm
strategy, visionary leadership, organizational culture, structure and processes
Visionary Leadership and characteristics
- provides superior strategic guidance for managing efficiency, flexibility and learning
- the leaders needs to have a vision, mission statement, purpose, look at the long term, motivate employees
- international mindset, cross cultural openness and awareness
- willingness to commit resources, believe in eventually success
- strategic vision → helicopter view (macro), firm in future, how to get there as a driving force for everyone
- invest human assets
Organisational culture
- pattern of shared values, behavioural norms, systems and policies for employees to learn/adopt
- how to think, perceive, feel, behave in situations and solve problems
- derives from founders, visionary leaders or history
- accomplish: global perspective, competence among employees, corporate language for communication and ethical standards
Integration responsiveness
summarises two basic strategic needs companies have: 1. integrate value chain activities globally and 2. create product and process that are responsive to local market needs
Multi-domestic industries vs Global Industries
Multi-domestic =adapt to suit laws, culture, income levels etc (country to country basis, translate books, food, fashion)
- Global industries= - competition on regional/global/worldwide scale - always offer the same (like cars, chemicals, computers, flights)
Global Integration vs local responsiveness
Global Integration= - coordination of value-chain across borders to gain worldwide efficiency, take advantage of cross cultural similarities
Local responsiveness= - individual countries (often in multidomestic industry) value chain country by country
Home Replication Strategy
- extension of home advantage, usually at the beginning of internationalisation
- create products for home market, sell abroad for additional sales (smaller companies with little resources)
- temporary, not long term approach
Multi-domestic/local Strategy
- generate to (don’t share knowledge) manager (often national manager) in each country/market to operate independently = local responsiveness
- meet needs in each market, so less economies of scale
Global Strategy
- headquarters seek substantial control to achieve max efficiency, learning and integration worldwide
- sees the world as one big marketplace, and uses economies for scale to minimize cost- universal products and services
Transnational Strategy
- think globally, act locally
- more responsive to local needs but retaining sufficient central control over operations to ensure efficiency and learning
- combine major advantages of multidomestic and global strategies, minimise disadvantages (eg: Ikea) - BUT difficult to implement
Centralisation/decentralisation
where should decision making happen? Headquarters or delegate to other?
Important in experienced global firms
- local managers should identify with broad objectives of firm
- subsidiaries should be visited periodically to check on values and priorities
- rotate employees to promote development of a global perspective
- managers should interact, share experiences
