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SMMC_G1[CS-3]_Global Strategy, Group member - Coggle Diagram

- - - - explains national competitive advantages in particular industries
      - Demand conditions
        
        specific characteristics (and high expectations) of demand in a firm's domestic market
      - connected to five force model
      - Factor conditions
        
        national, human, other resources and supportive infrastructure and institution
      - Competitive intensity in focal industry
        
        highly competitive environments tend to stimulate firms to outperform others
      - Related and supporting industries
        
        leadership in related and supporting industries fosters world-class competitors in the downstream industry
      - Implications for global strategy
        
        identifying potential sources of competition
        
        understanding your own competitive advantages relative to foreign competitors
        
        tapping into foreign country advantages (location decisions)
        
        co-creating a supportive ecosystem (cluster)
- - - - Grow market share if tailor offerings to local customer and host-country
    - - Reduce operating costs by using scale and deploying resources
  - - - Maximize local responsiveness via a multi-domestic strategy
      - Customers will perceive them to be domestic companies
      - EX : Nestle customized product offering in international markets
    - - Example: Lenovo's R & D in Beijing, Shanghai, and Raleigh; production center in Mexico, India, and China
      - Economies of scale and location economies
      - Pursuing a global division of labor based on best-of-class capabilities reside at the lowest cost
    - - Leveraging home-based core competencies
      - Selling same products/services in domestic/foreign market
      - EX : Selling Starbucks coffee internaionally
    - - Combination of localization strategy（responsiveness）with global strategy（low cost position）
      - EX
        
        German multimedia conglomerate
        
        Bertelsmann; Haier in appliances
        
        ABB in engineering products and services
  - - - highest-possible local responsiveness
      - reduced exchange-rate exposure
    - - location economies
      - economies of scale
    - - franchising
      - exporting or licensing
      - low-cost implementation
      - leveraging core competence
      - economic of scale
    - - combine benefits of localization and creating a global matrix structure
      - economies of sale, location, and learning
  - - - no or limited local responsiveness
      - highly affected by exchange rate
      - IP embedded in product or service could be expropriated
    - - high cost of implementation
      - little or no scale economies of scale
      - no learning across different region
      - higher risk of IP expropriation
    - - no local responsiveness
      - no product differentiation
      - exchange rate exposure
      - risk of IP expropriation
      - "Race to the bottom" as wages increase
    - - costly and difficulty to implement
      - leading to highly failure rate
      - some exchange rate exposure
      - higher risk or IP expropriation
- - - - barriers
        
        trade
        
        investment
      - challenge
        
        institutional differences
        
        culture
        
        language
        
        currency
        
        generate animosity
        
        popular backlash
    - - ex. Netflix
        
        into Canada
        
        challenges
        
        currency
        
        bilingual laws
        
        advantages
        
        few trade / investment barriers
  - - - labor
      - natural resources
      - technology
        
        knowledge
        
        talent
      - logistics
    - - location-specific advantage
      - learning
    - - OECD countries
      - emerging markets
        
        China
        
        India
  - - - broader scope of joint activities
        
        R&D
        
        marketing
      - active coordination
    - - sale into foreign markets
        
        export via an agent
        
        direct exports
    - - contributed resources
        
        money and others
      - manage jointly, share in profits
      - jointly-owned independent company
    - - 100% owned unit in a foreign country
      - types
        
        greenfield
        
        build the unit from scratch
        
        brownfield
        
        acquire fixed assets and reuse
        
        acquisition
        
        buy a local company and integrate
    - - transfer intangibles
        
        know-how
        
        IP
        
        brands
        
        patented technology
      - monitor performance
      - contract with a local partner
    - - down
        
        higher ownership & control
      - up
        
        reduced risk & costs & returns
  - - - affect
        
        market entry mode
      - too risk / liability
        
        take low-risk
        
        export
        
        license
    - - ex. manufacture locally
        
        reduce cost
      - form alliance
      - joint venture with local firm
        
        help manage
        
        risks
        
        knowledge gaps
      - conquer liabilities of foreignness
        
        form wholly owned subsidiaries
    - - expand
        
        from home market
        
        to nearby / similar markets
      - entry mode
        
        first lower risk only
        
        after learn
        
        higher-risk
      - born global firms
        
        key to success
        
        local country specific advantages
        
        globalization
        
        improve in communication
        
        the Internet
        
        international flows
        
        talent
        
        entrepreneurs
        
        supportive government policies
  - - - deal with new laws / regulations
- - - - international trade and investment flows, movement of labor, and cross-border integration
  - - - sea freight
      - air transport
    - - negotiations and treaties ex: GATT
    - - Multinational enterprises
        
        companies that operate in two or more countries
      - Foreign direct investment
        
        foreign portfolio investment :red_cross:
        
        investment, buying stocks or bonds, or putting money in a fixed deposit or bank account.
        
        investment in actual productive assets
- - - - [3] National Origins of Competitive Advantage
        
        [4] MNE Strategies