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unit 9 - strategic methods, ways of becoming an innovative company -…
unit 9 - strategic methods
Bartlet and Ghoshal's international strategy grid
International strategy: (low, low)
- Low pressure for integration + low pressure for differentiation
Based on home country expertise
Likely to be heavily centralised:
Knowledge at head office
Control of technologies + production/management techniques developed at home
The knowledge expertise
Limited local customisation of products or marketing strategies
✔︎transfer of knowledge and skills/distinctive competency to foreign markets
✖︎lack of local responsiveness
✖︎inability to gain location economies or benefit from experience curve effects
Multidomestic strategy: (low, high)
- Low pressure for integration + high pressure for differentiation
Based on responsiveness to local market demands
Likely to have autonomous national companies in various countries
May sell similar products - under different brands, with products + services adapted to that specific set of customers
✔︎ability to exploit experiences curve effects, location economies and economies of scale
✖︎lack of local representatives
Transnational strategy: (high, high)
- High pressure for integration + high pressure for differentiation - tries to maximise both
Knowledge and innovation is sought, developed + dispersed within entire network
High localisation -> decision making for the local markets is decentralised
Movement of people within the business the business across countries
✔︎ability to exploit experience curve effects, location economies and economies of scale
✔︎Gaining benefits of global learning
✖︎difficulties in implementation because of organisational problems
Global strategy: (low, high)
- High pressure for integration and low pressure for differentiation
heavily based on economies of scale
Generally centralised: overall control retained by headquarters, business will look to make cost savings and buy assets + resources centrally
company is likely to have full integrated systems + procedures
standardised product worldwide
✔︎ablity to customise products and marketing to meet local diffrences
✖︎inability to gain location economies or benefit from experience curve effects
graphs
experience curve
indicates the higher the amount of cumulative volume of production the lower the direct cost per unit produced (as a business more experienced at making a product, the better faster and cheaper it is likely to make it.
✘ competitors may also pursue this
✘ theory may not always be true
greiners model of growth
it describes the different phases of company growth in order so that managers can anticipate, plan and address the challenges- there are 5 phases
innovation success
early planning
create a pipeline by considering where existing products sit on the product lifecycle and planning innovation to keep products in maturity
supportive culture
encourage use of initiative through reward / recognition
maintaining secrecy
sign confidentiality agreements with supplier and partners
remember the consumer
make sure there is a consumer need that is being addressed
protection
use copyrights, patents and trademarks to ensure that the company has sole ownership of the idea and time to refine it
types of intergration
merger
- where two or more businesses join together
de-merger
- when a business sells parts of its business - could be 'asset stripping' or splitting business into different divisions
takeover
- when one business buys another business - can be 'hostile' or 'freindly'
conglomerate
: business in different sometime unrelated market
horizontal
: same industry, same stage of production
vertical
: same industry, different stage of production (can be backwards or forwards)
motives for takeovers
faster than organic growth
acquisitions of technical expertise
brands are expensive to develop
patents are valuable
ways of becoming an innovative company
Kaizen + how does it help a business become more innovative
continuous improvement, involves small groups of workers meeting to make small incremental changes- 2 main principles:gradual change staff suggestions
R&D + how does it help a business become more innovative?
the scientific investigation necessary to discover new products or manufacturing processes and the procedures necessary to ensure that these new products/processes are suited to the needs of the market
Intrapreneurship + how does it help a business become more innovative:what does it require?
acting like an entrepreneur within a big organistation
encourages new ideas and risk taking require:
benchmarking + how does it help a business become more innovative
involves setting standards based on the best practice of the other firms in the industry
using ideas from other firms and measuring yourself against them