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Assessing framework used by international business - Coggle Diagram
Assessing framework used by international business
what is strategy in global
enterprise valuation
Profitability
reduce cost
add value and raise price
Profit Growth
sell more in existing market
enter new market-- International expansion
realise location economies -- disperse value creation activities in places have efficient and effective performance
realise greater cost economies from experience effect
earn a greater return--leverage skills developed in foreign operations and transfer them elsewhere in the firm
expand market -- sell in international market
Meet competition pressure in global market
local responsiveness
strategy is not static-- will evolve over time
cost reduction
Four strategies
resource-based view
operation configuration
as a value chain -- by value creation activities like marketing
primary activities
R&D / production/ marketing &sales / customer service
support activities (human resource)
VRIO framework
rarity
rare of the resource and capability
valuable, common --> not advantage
valuable and rare --> temporary advantage
everyone has --> no make money
imitability
easier to imitate tangible resource than intangible
direct duplication-difficult
hard to identify causal determinant of performance
valuable, rare, hard to imitate R--sustained competitive advantage
SCA from ICT
3 more items...
earlier event affect future event
hard to acquire in short time, others spend long time develop
substitution-less challenging
value
resource add value link to competitive advantage
Organization
degree of leverage the full capacity of resource
use complementary asset effectively
manage social complexity effectively
invisible relationship add value-- harder imitation
R&C
intangible resource
repetitional (goodwill / reputation)
technological (patent)
human resource
capabilities
ability to connect different stages of value chain
innovation/ operation/ marketing/ distribution/ corporate function
institutional theories and international competitiveness
institution
humanly devised constraint that structure human interaction
institutional framework
formal and informal institutions govern individual and firm behaviour --support by 3 pillars
formal (law regulation rule)
regulatory pillar (government power)
political system
2 more items...
legal system
3 more items...
property right
1 more item...
economic system
1 more item...
informal (norm, culture, ethic)
normative pillar
how others value influence focal behaviour
cognitive pillar
internalised value and belief that guide individual and firm
reduce uncertainty by
relational contracting - informal and personal exchange
Arm's length transaction-formal, impersonal exchange with third part enforcement
institutional transition-fundamental and comprehensive change to formal and informal rules that affect all organization (China move from central planning to market competition, transition economies)
institution-based view of global business
focus on dynamic interaction between institutions and firms
firm behaviours is outcome of interaction
firm behaviour reflect formal and informal constraint of a particular institutional framework
composition
firms
firm specific resource and industry condition influence firm behaviour
firm behaviour
formal and informal constraint affect firm behaviour
institution
institution and firm has dynamic interaction
PESTAL framework
institutional analysis--list of influence on possible success or failure of particular strategies
economic (interest rate, GDP)
socio-culture (population, lifestyle change)
technological (ICT innovation)
environmental (global warming)
political (taxation change)
legal (competition law)
competitive positioning
Porter's five forces framework
Issue
coverage of industry (digital industry include mobile phone, camera, need specific)
remember importance of complementary product (Windows and McAfee security system are complement) --like a six force
apply at most appropriate level, not whole industry
Three generic competitive strategy
focus
serve particular segment/niche of industry--need to intimate knowledge about this segment
differentiation
low volume, high margin--perceive valuable and different pay premium price
defence against 5 forces
difficult to sustain in long run
competitor might duplicate differentiation
cost leadership
low cost/ low price--mass market but might comprise value
"Don't get stuck in the middle" (Porter 1980s)
Porter argues profitability depends on market position and competitive advantage
middle between strategies not good--become stuck
stuck in an unattractive business without a viable exist is worst (Airline stuck with uneconomic union contract)
stuck arise because managers made inflexible commitment to what they thought attractive
Value net -'Co-opetition'
complementary: offer product work with won product so final product more attractive
copetition + cooperation-better for competitor to work together to create a larger market
Porter only about competition
business technology framework
four domains of IT
IT hype --> IT capability--> useful IT--> strategic IT (Willcocks and Lacity 2017)
use Porter's 5 forces find strategic IT
goal: strategic IT
support micro-marketing management / shorter time to market/ new levels of partnership
IT strategic Impact Grid (Nolan & McFarlan 2011)
framework for analysis
multiple methodology (Earl 1996)
"bottom up"-evaluation
"outside-in"-innovation
"top down" -clarification
strategic IT sourcing (analyse business activity) (Willcocks et al. 2009)
system audit
