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G3_[CS-3] Global Strategy, G3 Group members, Globalization, National…
G3_[CS-3] Global Strategy
MNE Strategy
MNE strategies
International Strategy
faces low pressures to customize or economize
leveraging home-based core competencies and selling
the same product and service in both domestic and foreign markets
Tesla
has relatively few local tastes or conditions
that it needs to cater to
lower costs by building a small number of so-called Giga factories
Global Standardization Strategy
companies that face strong pressures for cost reduction but low
pressures for local responsiveness
focuses on maximizing economic profits or NPV
Ex : Lenovo
Localization Strategy
companies that face very significant pressures to respond to local needs
maximize the local responsiveness through a multi-domestic strategy
McDonalds
highly responsive to local tastes and local market conditions
strong well known brand
Transnational Strategy
companies that faced both cost pressures and pressures to be locally responsive
try to achieve both localization, high responsiveness, and low cost
matrix structure
quickly move around knowledge within the company
the benefits have to be high to support extra cost of implementing
combination of localization and global strategy
Ex : Haier
standardized their backward integration towards the raw materials
tremendous economies of scale and low cost
forward integration towards the consumer
product differentiation
Benefits and Risks
Localization Strategy
benefits
higher possible local responsiveness for consumer preferences
reduces exchange rate exposure or risk
risks
duplication of key businesses across different countries can be very expensive to implement
little or no economies of scale leads to higher cost structure
little learning across different countries since the divisions are seperated
high risk for intellectual property expropriation
Global Standardization Strategy
benefits
economies of scale and low cost and division of labor
share inputs across multiple outputs
risks
no local responsiveness
little ability to differentiate products
exchange rate exposure
"race to the bottom" as wages increase
International Strategy
risks
limited local responsiveness
highly affected by exchange rate
intellectual property embedded in product or service may be expropriated or stolen
benefits
leveraging core competence and economies of scale
low-cost implementation
exporting of licensing (products)
franchising (services)
licensing (trademarks)
Transnational Strategy
benefits
attempt to combine product differentiation and standardization strategies by global matrix organization
achieve economies of scale and local responsiveness
risks
global matrix structure can be very costly and difficult to implement
getting messages from multiple managers can lead to confusion by workers
exchange rate exposure
higher risk of intellectual property expropriation
Foreign Market Entry Part 1
Reasons
expand the market
access better or lower cost factors of production abroad
access local knowledge or talent for technology
reduce business risk
leverage the company's core capabilities
develop new capabilities
Market Entry Modes
exporting
sale of product or services into foreign markets
export directly
to export indirectly via local agents
licensing or franchising
a contract transfer rights within the foreign to intangibles like know-how and brands
need to monitor the performance of its local partner
strategic alliances
involves broader scope of activities that the partners collaborate over
joint ventures
both companies contribute resources to create an independent company
wholly-owned subsidiary
greenfield
the unit is built from the ground up
brownfield
purchased key assets and repurposed
acquisition
purchased a local company and integrated
Foreign Market Entry Part 2
barrier and challenge
languages
foreign regulations and laws
trade and investment
institution
currency
bias
Case: Netflix
bilingual laws withing different country
ignored some reason
institution void and legal risk
economic conditions
geography distance
currency risk
culture and socio-economic
political bias
although America and Netflix is similar to each other
better decision
judged by own ability with liability
too much
then trying exporting or licensing
stage model of internationalization
choose similar market
try low-risk entry mode
handle as more as possible information about target market
born-global
G3 Group members
國企三 翁暐婷 Kristin
國企三 吳翊瑄 Amanda
國企三 蔣明慈 Esther
國企三 張瑋庭 Wei Ting
國企三 李家慧 Stephanie
國企三 吳承樺 Eric
Globalization
economic globalization
investment flows
labor across borders
cross-border intergration of companies into multinational firms
international trade
causes of globalization
advanced telecommunications
internet,email,social media,etc have dramatically reduced the cost of conducting business globally
reduced transportation costs
The flow of people and goods between international business is easier and cheaper
falling trade and investment barriers
the bilateral or multilateral agreements that reduced tariff barriers to global trade and effectively increased the frequency of imports and exports between countries
growth of MNEs and FDI
FDI(foreign portfolio investment)
the investment in actual productive assets undertaken by companies,such as build up a production plant in a foreign country
MNEs(Multinational Enterprise)
MNEs can contribute towards globalization by undertaking operations
definition
the process of closer integration and exchange between countries and peoples worldwide
National Origins of Competitive Advantage
national competitive advantage
Why some countries are more competitive than others?
Due to intangible resources
Diamond Model
characteristic
a framework to explain such national competitive advantage
understanding your company's own competitive advantages
understand how to compete with foreign competitors
will be influenced by Government policy and Chance conditions
Factor Conditions
refer to the natural, capital and human resources available
Demand Conditions
specific characteristics/ strong home market demand
competitive intensity
competitive environment
related and supporting complementors
may create a competitive advantage
Diamond Model
(
https://imgur.com/VqlUQaW
)
