Bài giảng International Business - Chapter thirteen: International Competitive Strategy

International Competitive StrategyMcGraw-Hill/IrwinInternational Business, 11/eCopyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.chapter thirteenLearning ObjectivesExplain international strategy and competencies and international competitive advantageDescribe the steps in the global strategic planning processExplain the purpose of mission statements, objectives, goals, and strategies3Learning ObjectivesDescribe the methods of and new directions in strategic planningExplain home replication, multidomestic, regional, global, and transnational strategies and when to use themDescribe the sources of competitive informationUnderstand the importance of industrial espionage4International StrategyThe way firms make choices about acquiring and using scarce resources in order to achieve their international objectivesInvolves decisions that deal with all the various functions, products and regional unit activities of a company5International StrategyThe goal is to achieve and maintain a unique and valuable position both within a nation and globally: competitive advantageCompetitive advantage is the ability of a company to have higher rates of profits than its competitors6Competitive AdvantageTo create a sustainable competitive advantage, a company tries to develop skills thatCreate value for customersAre rareAre difficult to imitate or substitute forAre organized in a way that the company can fully exploit7Global Strategic PlanningProvides a means for top management to Identify opportunities and threatsFormulate strategies to handle themStipulate how to finance and manage the strategies’ implementationProvides consistency of actionProvides a thorough, systematic foundation for making decisions8Global Strategic Planning ProcessAnalyze the company’s external environmentsAnalyze the company’s internal environmentQuantify goalsDefine the company’s business and missionSet corporate objectivesFormulate strategiesMake tactical plansThe process of strategic planning provides a formal structure in which managers9Global Planning Process10Analyze Corporate Controllable VariablesSituational analysisForecastValue Chain AnalysisWho are the target customers?What value do we deliver?How will customer value be created?Figure 13.2 11Figure 13.2 – The Value Chain12Analyze Corporate Controllable VariablesKnowledge as a Controllable Corporate ResourceCapabilities of employeesStructures, systems, organizational routinesBuild knowledge database and transfer best practicesProtect knowledge from competitors13Define the Corporate Business, Vision, and Mission StatementsThese broad statements communicate to the corporation’s stakeholders what the company is and where it is going and the values that will guide the behavior of the organization’s membersMission statement A broad statement that defines the organization’s purpose and scope14Define the Corporate Business, Vision, and Mission StatementsVision Statement Description of the company’s desired future position if it can acquire the necessary competencies and successfully implement its strategyValues StatementClear and concise description of the fundamental values, beliefs, and priorities of the organization’s members15Set Corporate ObjectivesObjectives Direct the firm’s course of actionMaintain it within the boundaries of the missionEnsure its continuing existenceIn order to implement an effective strategy, it is important to quantify objectives 16Formulate Competitive StrategiesCompetitive StrategiesAction plans to enable organizations to reach their objectivesGenerally, participants in the strategic planning process will formulate alternative competitive strategies along with action plans that seem plausible17Formulate Competitive StrategiesIn the international market companies confront two opposing forcesReduction of costsAdaptation to local marketsBasic strategies address these pressuresHome ReplicationMultidomesticRegionalGlobalTransnational18Cost and Adaptation Pressures and Their Implications for International Strategies19Home Replication StrategyUsed when companies typically centralize product development functions in their home countryThen transferred to foreign markets in order to capture additional valueMicrosoft, McDonald’s20Multidomestic StrategyUsed when there is strong pressure for adaptation to local marketDecision making decentralized to allow for quick changeIncreases cost structureToo much adaptation may take away from productCost and complexity of coordination can be substantialSchneider Electric21Global StrategyUsed when a company faces strong pressure to reduce costs and limited pressure to adapt products for local marketsStrategy and decision making centralizedCompany offers standardized products and servicesValue chain activities in only one or a few areasResults in limited ability to adjust to meet customer needs and higher transportation costsIntel, Boeing22Transnational StrategyUsed when a company confronts pressures for both cost effectiveness and local adaptationCompany locations based on where most beneficial for each activityUpstream value chain activities will be more centralizedDownstream activities will be more decentralizedAchieving an optimal balance is challengingStrategic decisions, structures and systems will be complex23ScenariosMultiple, plausible stories about the futureOften the “what if” questions reveal weaknesses in present strategiesTypes of subjects for scenarios includelarge and sudden changes in sales (up or down)sudden increases in price of raw materialssudden tax increasesa change in the political party in power24Types of PlansContingency PlansPlans for the best-or-worst-case scenarios or for critical events that could have a severe impact on the firmTactical Plans (Operational)Spell out in detail how objectives will be reachedShort-term25Strategic Plan FeaturesSales Forecast and BudgetSales ForecastProvides management with an estimate of the revenue to be received and the units to be soldBudgetDuring planning, budgets coordinate the functions within the firm and provide management with a detailed statement of future operating results26Plan Implementation FacilitatorsPolicies and ProceduresPoliciesBroad guidelines to assist lower-level managers in handling recurring problemsPermit discretionary action and interpretationThe object is to economize managerial time and promote consistency among the various operating units27Plan Implementation FacilitatorsProceduresPrescribe how certain activities will be carried outEnsure uniform action on the part of all corporate membersFacilitate comparison among operational units28Performance MeasuresAssess if the strategy and its implementation are proceeding successfully and what modifications may be neededMeasures of the company’s success Financial, technological, and human resourcesMeasures of the effectivenessMeasures of the company’s progress29Kinds of Strategic PlansTime HorizonStrategic plans may be classified as short, medium, or long termLevel in the OrganizationEach organizational level will have its level of planFunctional area30Methods of PlanningTop-down planningBegins at the highest level in the organization and continues downwarddefinition of the businessmission statementcompany objectivesfinancial assumptionscontent of the planspecial issues31Methods of PlanningBottom-Up PlanningBegins at the lowest level in the organization and continues upwardIterative PlanningRepetition of the bottom-up or top-down planning process until all differences are reconciled32New Directions in PlanningWho Does the Planning?Many firms have introduced innovation to the planning processBring in customers and suppliers who have firsthand experience with the firm’s markets33New Directions in PlanningHow Planning is Done Many firms have moved toward less structured formats and much shorter documentsContents of the PlanTop managers much more concerned with issues, strategies, and implementation34Summary Changes in the International Planning ProcessTop management must assume more explicit strategic decision-making role, decide how things ought to be, not listen to analyses of how they areThe nature of planning must change from forecasting to creativityPlanning processes and tools that assume a future much like the past must be replaced by a mind-set obsessed with recognizing change and using it to build competitive advantage35Summary of Changes in International Planning ProcessThe planner must change from purveyor of incrementalism to crusader for actionStrategic planning must be restored to core of line management responsibilities36Competitor AnalysisCompetitor AnalysisProcess in which principal competitors are identified and their objectives, strengths, weaknesses, and product lines are assessedIndustrial EspionageAct of spying on a competitors to learn secrets about strategy and operations37Competitor Intelligence SystemsProcedure for gathering, analyzing, and disseminating information about competitorsBenefits include ability to:Improve bidding successIdentify competitor’s key customers Identify plant or other facility expansion plansImprove understanding of competitors’ products and processes38Sources of InformationWithin the FirmSales representativesLibrariansTechnical and R&D peoplePublished MaterialTechnical journalsDatabasesInternetIndustry reportsPublic documentsSuppliers/CustomersCompetitors’ EmployeesDirect Observation or Analysis of Physical EvidenceTechnical peopleReverse engineering39BenchmarkingA technique for measuring a firm’s performance against the performance of others40BenchmarkingFour typesInternal: comparing one operation in the firm with anotherCompetitive: comparing the firm’s operation with a direct competitorFunctional: comparing similar functions of firms in your industryGeneric: comparing operations in totally unrelated industries41