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B207 Block 2: Competing in a Global Context - Coggle Diagram
B207 Block 2: Competing in a Global Context
Critical thinking to provide context to business environment
Use of PESTLE
Political
Economic
Social
Technological
Legal
Environmental
'Global context'
Global trade environment
Theory of comparative advantage
Absolute comparative advantage (Smith, 1776)
Assumes that if another country can make a product cheaper then it is in the best interests of both countrys to buy/supply it
Relative comparative advantage (Ricardo)
Assumes that a country will specialise in the production of a good and the price of the goods determines which country should specialise in that item
The Diamond Model (Porter, 1990)
Structure and rivalry of firms
Demand conditions
Factor conditions
Related and supporting industries
The Five Forces of Competition (Porter, 1990)
Direct industry competitors
Suppliers
Buyers
Potential entrants
Substitute goods and/or services
International operations
Offshoring and re-shoring (Moncza and Trent, 1991)
Domestic sourcing
Reactive international sourcing
Proactive international sourcing
Global sourcing networks
Implications of internationalisation
More complex supply networks
Adapting processes to different conditions
Adapting products and services to meet different consumer needs (glocalisation)
Supply chain management
'Bullwhip effect' (Blanchard, 2010): supply chains are naturally unstable and flow of goods or services through supply chains must be carefully managed
Vertically integrated systems
Outsourcing
The throughput efficiency of supply chains
Economic and financial flows in a globalised world
International Monetary Fund (IMF):
responsible for ensuring the stability of the system of exchange rates and international payments that enables countries to transact with each other
The World Bank
: its goal is to eradicate extreme poverty and to promote shared prosperity
The balance of payments
Financial account
Capital account
Current account
Global imbalances and their impact such as 2008 financial crisis
Foreign direct investments - aimed at securing operational control
Portfolio investments - where assets are bought and sold
City leadership
Elements
Actors: people who are in a formal or informal position to lead
Structures: are arrangements that enable the pursuit of city leadership
Processes: social processes through which leaders create followers
Followers: those mobilised by actors/structures/processes of each form of city leadership
Examples
Civic leadership
Political leadership
Managerial leadership
Business leadership
Globalisation
Convergence: adopting prevailing global practices and standards
Divergence: the idea that organisations will conform to their 'parent culture' (the culture of the country/locality they are in)
Crossvergence: uniquely creating own values in accordance with the various contexts they exist within
'The shrinking world': a theory that due to advances in transportation and digital technologies have made the world more connected and in a business sense, allow other company's to see clearly how a company is competiting in a global market
Marketing and branding
Modes of entry into global market
Indirect exporting
Direct exporting
Joint ventures
Strategic alliance
Global strategic partnerships
Licensing
Franchising
Contract manufacturing
Management contracting
Direct investment
Brand equity: ‘the monetary value of the psychological goodwill which the brand has created over time through communication investment and consistent focus on products, both of which help build the reputation of the name’ (Kapferer, 1997, p. 24)
Brand identity: what the brand stands for
Brand reputation: how a brand has represented itself in the past and present based on interactions with not only consumers but also shareholders/stakeholders etc.
Brand content: making a meaningful connection with consumers