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SMMCG8[CS-3] Global Strategy, G8 Group member, 1, Junction_2, Junction_3,…

- - - - step 2: Use lower risk market entry modes
        
        step 3: expand into more distant markets
  - - - example: iRobot
    - - to expand the market for the company's products or services
        
        look to large economically developed markets such as OECD countries
      - to access better or lower cost factors of production abroad
        
        natural resources(oil)
        
        technology
        
        access local knowledge or talent people
    - - exporting
        
        sale of product or services into foreign markets
      - licensing or franchising
        
        contract transfer rights within the foreign
        country to intangibles that are core to the value delivered in the company's business
      - strategic alliance
      - joint ventures
        
        both companies contribute resources to create an independent company that they then manage jointly
        
        example: Sony Ericsson
      - wholly-owned subsidiary
        
        as a greenfield unit where the unit is built from the ground up
        
        as a brownfield venture where key assets
      - entry mode choice
        
        have spare resources or not
        
        risky
        
        economically or politically unstable
        
        lower commitment market entry modes
        
        exporting or licensing
- - - - a remarkable increase since the 1960s
        
        GDP has grown from 22% to 50%
        
        globalization 1.0
    - - reduced transportation costs
        
        Ex:sea freight, air transport
      - falling trade and investment barriers
        
        negotiations and treaties between countries
        
        GATT(the General Agreement on Trade and Tariffs)
        
        WTO(the World Trade Organization)
      - advanced telecommunications
      - growth of MNEs(Multinational Enterprises)
        
        companies that operate in two or more countries
        
        Ex:US
      - growth of FDI(Foreign Direct Investment)
        
        a significant activities conducted by multinationals
        
        Foreign Direct Investment(FDI)
        
        investment in actual productive assets undertaken by companies
        
        Foreign Portfolio Investment(FPI)
        
        investment, buying stocks or bonds or putting money in a fixed deposit or bank account
- - - - consumer electronics
        
        South Korea
        
        Japan
      - movies
        
        India
        
        USA
      - automobiles
        
        Japan
        
        Germany
      - software
        
        Israel
        
        India
        
        USA
  - - - price rivalry or competitive rivalry
    - - power of buyers
    - - complementarity
        
        Switzerland
        
        pharmaceutical industry
        
        healthcare industry
      - related and supporting industries are complementors
- - - - international strategy
        
        companies in their early phase of internationalization
        
        risk：no or limited local responsiveness
        
        benefit：get to leverage your core competence and get economies of scale
      - global-standardization strategy
        
        example: Tesla
        
        less independence for each country operation
        
        its organization along product lines internationally
        
        local companies report up to their corresponding corporate product divisions or profit centers
        
        A different type of strategy
        
        focuses on maximizing economic profits or NPV, or net present value
        
        achieve economies of scale, cost leadership, and driving down costs through global standardization
        
        risk：no local responsiveness and exchange rate exposure
        
        benefit：economies of scale and low cost and division of labor
    - - transnational strategy
        
        achieve both localization high responsiveness and low cost
        
        backward integration and forward integration
        
        organization design theory
        
        support the extra cost of implementing
        
        benefit：combining product differentiation and standardization of strategies
        
        risk：the global matrix structure can be very costly and difficult to implement
    - - localization strategy
        
        empowering their local country managers operations.
        
        customized to the needs of local markets
        
        low product differentiation
        
        benefit：higher local responsiveness and reduces exchange rate exposure or risk
        
        risk：cost structure tends to be higher and high risk for intellectual property expropriation
        
        the opposite of a global strategy