Business Strategy and the Global Context
Impacts of the macro environment
Impacts of the micro environment
Convergence vs. Divergence
How business strategy is impacted by and can be used to influence the wider business environment
1. Understanding consumer needs
2. Understanding the global context
3. Understanding organisational strategy, its strengths, weaknesses and market positioning
Expansion
What do consumers want?
How does this reflect wider change in the global context?
What is to be expected in future?
How do consumer needs differ per market?
What factors drives consumption?
What determines market PED?
Convergence
Divergence
Crossvergence
Follow international 'best practice'
What is perceived as 'best practice'
Follow parental/local culture
Drivers of expansion?
Do capabilities match market needs?
Identifying threats and opportunities
How should one expand?
Social
Economic
Ethical
Technological
Political and legal
Environmental
STEEPLE analysis
SWOT analysis
Cost advantages
Portfolio balance
Customer drivers
Saturated/low growth/small domestic market
Competitive forces
Is the market viable?
Does this fit market needs? To what extent?
Does the parent culture reflect a global culture?
Glocalisation
Is this appropriate for all markets?
Does this reflect organisational strategy?
Using global frameworks with local relevance?
Is this strategy compatible with organisational capabilities? What is the cost? How does this reflect the wider environment?
Cultural immersion
How does this relate to changes in the macro environment?
Economic growth?
Political change?
Increasing disposable incomes?
Does this reflect predicted changes in the macro environment?
How can these changes be integrated into business strategy?
Innovation?
Expansion into new markets?
Influence of branding?
The Diamond Model (Porter, 1990)
Changes in related industry structure
Changes in factor conditions
Changes in demand conditions
Does organisational strategy reflect such change?
Does the organisation hold a relative comparative advantage?
This relates to organisational strategy
Outsourcing?
Vertical integration
Upstream?
Downstream?
How does this reflect supply chain structure?
Cost benefits?
Ethical implications?
Reliability and information sharing?
Near-shoring
What is the effect on competitiveness?
Effects on global supply chain management
Firm's competitiveness in relation to rivals?
Porter's Five Forces Model (1980)
Competitive advantage?
Expansion opportunities
Macro Environment vs. micro environment. Does this reflect organisational capabilities?
Standardisation vs. Globalisation
Do capabilities match market requirements?
Is there room for innovation? How does innovation reflect wider change? Should it reflect wider change? Why? Why not?
Does the organisation hold the power to influence the wider market? How does reflect 'power imbalances'?
Market requirements
Market attractiveness
Organisational capabilities
Consumer needs
How does this impact operations?
What are product requirements?
Is there a match between capabilities and market requirements?
How does this reflect competitors strategy/structure?
Brand reputation
Competition
Competitive advantage
Product adaptation
Ability to accommodate change and to respond to shifts in demand size and choice
Skills/knowledge
Infrastructure/access
Cost vs. profit potential
Growth/size of market
What are the impacts of the macro environment?
How does this relate to exchange rates?
The Diamond Model (Porter, 1990)
Porter's Five Forces (1980)
Global vs. Local branding
What are the costs of expanding into the market?
Are there cost advantages? I.e. outsourcing?
What are the ethical costs?
Branding
What factors may restrict growth?
Are there political restraints? Quotas?
Threat of substitution? Threat of new entrants?
What are the driving forces behind expansion? Is the market plausible?
Is there a need to adapt?
Do consumers identity themselves with the brand? Why? How can this be increased? How does this reflect market positioning?
To what extent should branding be local?
How does this reflect convergence vs. divergence?
Do consumers want to be perceived as global?
Do the benefits outweigh the challenges?
What are competitors doing? Why?
Appropriateness if glocalisation?
Does branding reflect organisational culture?
Extent of government control? How does this impact tax/monetary policy? Does this impact market viability?
Extent of market liberation?
Exchange rate fluctuations
Effects on pricing decisons?
Should prices be amended to accommodate fluctuations?
To what extent does this affect PED?
What other factors influence PED?
How will this impact competitiveness?
Impact on sales demand/ proportion of goods imported?
How does this impact business strategy?
Market attractiveness. Should similar markets be entered?
Enter various overseas markets to overcome negative fluctuations = portfolio balance?
Fix prices? How will this impact demand/competitivness?
Differentiation? Impact on PED?
Infrastructure?
Availability of suppliers?
Market structure?
Ability to enter market?
Existence of quotas or trade tariffs? Impact on expansion/competitiveness/market attractiveness?
Policies on FDI? Impact on ability to expand?
Do wider changes in ethical responsibilities reflect changes in consumer demand? Are ethical demands a driving factor? Should business strategy reflect such change?