Week 8 Strategy in international context Flashcards
Define international strategy and globalisation
International strategy – for operating outside an org’s country of origin
Globalisation – coordinated activities througout world (1 type of international strategy).
Yip’s framework suggests internationalisation potential of industries varies depending on factors impacting on it. List these drivers.
MCGC
o Standardised Market drivers – the standardisation of market characteristics:
o Cost drivers - scale, georgraphical cost advantages
o Government drivers – policy
o Competitive drivers – global cost / competition advantages
What does Porters diamond suggest. How is it used?
Suggests locational advantages profide ongoing CA, from -
- Local factors
- Demand
- Related / supporting industry
- Firm strategy/structure/rivalry
What is the international value network?
Suggests elements of the value chain to located in the country or region that is most effective and efficient
Define the global/local dillemma
The global/local dilemma is the tension between standardising a product across boundaries versus adapting it to meet local markets.
List the 4 basic international strategies,
o global strategy - coordinated inational value networks
o complex export - management realises locational advantage
o simple export - locational advantage with no coordination
o multidomestic - benefit in adapting to local needs
What 4 PESTEL elements are particularly important in market entry
o Political
o Economic
o Social
o Legal
The CAGE framework considers the match with an intended country on 4 factors. List.
o Cultural distance - differences in language, ethnicity, religion and social norms.
o Administrative and political distance -re administrative, political or legal traditions.
o Geographical distance - size, sea-access, quality of communications infrastructure.
o Economic - wealth distances.
• What is the staged international expansion model for market entry and how is it being challenged?
ELJS
Def – proposes sequential entry into new markets
- Export
- License/franchse
- Joint ventures
- Subsidiaries
Challenged by:
o Born global firms
o Emerging multinationals – all capabilities essential for market share
What are some of the findings from research on the relationship between internationalisation and performance
- Inverted u curve – At a point org complexity exceeds benefits of scale/scop/local - advantage.
- Service sector disadvantaged - culture, restrictions, high supervision
- Product diversified coordination capabilities are offset by costs
What are the four main subsidiary roles in multinationals around capabilities (x) vs local importance (y)?
BSCI
Black holes – low capabilties, important area
Strategic leaders – valuable capabilities, important area
Contributors – valuable capabilities, lesser area
Implementers – low capabilities, lesser areas
