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SMMC G6 [CS-3], G6 group members - Coggle Diagram

- - - - Strong pressures for cost reduction, low pressures for local responsiveness
    - - Significant pressures to respond to local needs, low pressures for cost reduction
    - - Low pressure to either customize or economize
    - - Face both cost pressures and pressures to be locally responsive
  - - - To achieve economies of scale and location economies
      - Global division
    - - Empowering their local country managers
      - maximize the local responsiveness, like product differentiation
    - - Typically operate through a single international business division
      - Leveraging home-based core competencies
    - - Backward integration and forward integration of value chain
      - Matrix organization
  - - - Pros
        
        combining product differentiation and standardization
      - Cons
        
        lead to confusion by the workers
        
        some exchange rate exposure
        
        higher risk of intellectual property expropriation
    - - Pros
        
        reduces exchange rate exposure or risk
      - Cons
        
        Expensive to implement
        
        little learning that goes across the various divisions in different countries
        
        high risk for intellectual property expropriation
    - - Pros
        
        economies of scale and low cost and division of labor
      - Cons
        
        some exchange rate exposure
        
        race to the bottom of continually moving into more and more underdeveloped countries
        
        no local responsiveness
    - - Pros
        
        Low implement cost
        
        Achieve a low risk by exporting or licensing the product or franchising
      - Cons
        
        Exchange rate fluctuations
        
        Intellectual property may be expropriated or stolen
- - - - demand conditions
        
        like Porter's power of buyers
        
        have to do with specific characteristics of demand in the firm's domestic market
      - competitive intensity in the focal industry
        
        looking at the price rivalry or competitive rivalry as another one of Porter's five forces
        
        highly competitive environments tend to stimulate firms to outperform others
      - factor conditions
        
        like the power of suppliers
        
        nation's endowments in terms of national, human, and other resources, as well as supportive infrastructure and institution
      - related and supporting industries
        
        are complementors
        
        leadership in related and supporting industries fosters world-class
    - - identifying a potential source of future competition
      - understanding your company's own competitive advantages relative to foreign competitors
      - tapping into foreign country advantages
      - co-creating a supportive ecosystem
- - - - Reduce business risk
        
        not vulnerable any more
      - Leverage core capabilities
        
        e.g.McDonald's or Yum
      - Access better or lower cost factors
        
        Labor, nature resources, technology, logistics
        
        e.g., iRobot
      - develop new capabilities
        
        location-specific advantages
        
        learning from foreign country operations
      - Access a larger market
        
        OECD countries and emerging markets (e.g.,China, India)
    - - Strategic Alliance
        
        Broader scope of joint activities
        
        with a local partner, which would involve more active coordination.
        
        e.g. WL Gore and Associates with Japanese partner
      - Joint Ventures
        
        Jointly-owned independent company
        
        Manage jointly and share in profits
        
        contribute resources
        
        e.g.Starbucks in India
      - Licensing or Franchising
        
        Monitor performance
        
        Contract with a local partner
        
        transfer intangibles like technology, know-how, brands
      - Wholly-Owned Subsidiary
        
        Establish a 100% owned unit in a foreign country
        
        how
        
        Brownfield
        
        acquire fixed assets and reuse
        
        Acquisition
        
        buy a local company and integrate
        
        Greenfield
        
        build the unit from scratch
      - Exporting
        
        Direct exports
        
        Sale into foreign markets
        
        export indirectly via local agents
    - - Different culture
      - Currency
      - Different institutions
      - Animosity
      - Trade and investment barriers
      - Politics
      - Regulations
      - Anti-foreign bias
    - - Institutional voids and legal risks
        
        A firm choose entry mode based on ability to cope with liabilities
      - Economic conditions and risks
      - Geographic distance
      - Currency differences and risks
      - Cultural and socio-economic unfamiliarity
      - Political biases and instability
    - - Use lower risk market entry modes
      - Over time, choose higher risk entry modes
      - Expand into similar, proximate markets first
    - - Communication networks (internet)
      - Global flows of talent and entrepreneurs
      - Government policies
        
        Important for born globals in developing or emerging markets
      - Local advantages
  - - - investment flows
        
        the share of global GDP has grown from a level of about 22 % to over 50%.
      - movement of labor across borders
      - international trade
      - the cross-border integration of companies into multinational firms
    - - Advanced telecommunications
        
        more efficient to conduct business worldwide
      - Reduction in trade and investment barriers
        
        WTO
        
        Having significant positive impact in developing countries
      - Growth of MNEs and FDI
    - - particularly in developed countries (ex: USA)