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[CS-3] Global Strategy, Group2 Team members - Coggle Diagram

- - - - Maximize local responsiveness via a
        multi-domestic strategy
      - Consumers will perceive them to be
        domestic companies
      - Example: Nestle's customized product
        offerings in international markets
      - To sum up
        
        Features
        
        Compete in host countries with large and lucrative but idiosyncratic domestic markets
        
        Main competitive strategy is differentiation
        
        Perceive as local company
        
        Benefits
        
        Highest-possible local responsiveness
        
        Reduced exchange-rate exposure
        
        Risk
        
        Multiple countries leads to high cost of implementation
        
        Little or no economies of scale
        
        Little or no learning across different regions
        
        Higher risk of IP expropriation
    - - Achieve cost leadership
        
        Globalization standardization strategy
        
        Pursue a global division of labor based on best-of-class capabilities
        
        Reside at the lowest cost
      - Achieve economies of scale and location economies
        
        Maximize economic profits/NPV
      - Example: Lenovo
        
        R&D in Beijing,Shanghai, and Raleigh
        
        Production center in Mexico, India, and China
      - To sum up
        
        Features
        
        Offer standardized products
        
        Main competitive strategy is price
        
        Benefits
        
        Location economies
        
        Global division of labor based on best-of-class capabilities reside at lowest cost
        
        Economies of scale
        
        Risk
        
        No local responsiveness
        
        Little or no product differentiation
        
        Some exchange-rate exposure
        
        Some risk of IP expropriation
    - - Combination of localization strategy (responsiveness) with global strategy (low-cost position)
        
        Value chain with backward integration and forward integration
        
        different preferences for different appliances in different countries
        
        Matrix organization / an organization design theory
      - Example
        
        German multimedia conglomerate Bertelsmann
        
        Haier in appliances
        
        Backward integration of raw materials and standardization of parts
        
        ABB in engineering products and services
      - The benefits of a transnational strategy must be high
        
        Support the additional costs of implementing the strategy through a certain matrix organization
      - To sum up
        
        Benefits
        
        Economies of scale, location, and learning
        
        Combine benefits of localization and standardization strategies
        
        Global matrix structure
        
        Risk
        
        Global matrix structure is costly and difficult to implement
        
        Some exchange-rate exposure
        
        Higher risk or IP expropriation
        
        Features
        
        pursue an integration strategy
        
        product differentiation and low cost
        
        Think globally, act locally
    - - Sell the same products or services in both domestic and foreign markets
      - Example: Starbucks and Rolex
      - Home-based core competencies
      - To sum up
        
        Benefits
        
        Achieve economies of scale
        
        Low-cost implementation
        
        Exporting or licensing (for products)
        
        Franchising (for services)
        
        Ucensing (for trademarks)
        
        Use core competitiveness
        
        Features
        
        Products and services tend to have strong brands
        
        Main competitive strategy tends to be differentiation
        
        Well-suited for high-end products and luxury goods that can be shipped across the globe
        
        Used by MNEs with relatively large domestic markets
        
        Risk
        
        Highly affected by exchange rate fluctuations
        
        IP embedded in product or service could be expropriated
        
        No or limited local responsiveness
  - - - Using scale economies
      - Operating in a similar way
        
        With the same resources across multiple markets
    - - A strong,well-known brand and knows a lot about specific fast food recipes and running fast food restaurants
      - Highly responsive to local tastes and local market conditions
        
        Accommodate local tastes and religious sensitivities
    - - Lower costs by standardizing internationally as much as possible and not customizing to individual countries except to the minimum extent necessary
    - - Goobal-Standardization strategy
        
        Face strong pressures for cost reduction, but low pressures for local responsiveness
        
        Its organization along product lines internationally and relatively less independence for each country operation
        
        Like:Tesla
      - Localization strategy
        
        The opposite of a global strategy
        
        Consumer products or heavily regulated industries, face very significant pressures to respond to local needs
        
        Empowering their local country managers who typically oversee all within country operations
      - International strategy
        
        Faces low pressures to either customize or economize
        
        Largely selling the original product developed from their homebase and typically operate through a single international business division
        
        Companies in their early phase of internationalization use it
      - Transnational strategy
        
        Try to be locally responsive and pursued lower-cost
        
        Have some kind of matrix structure where managers simultaneously report to their local country heads and to a product or profit center head located elsewhere
        
        Quickly move around knowledge within the company about how to lower costs,but also to be responsive to local needs at all times
  - - - It's a lot harder than that to globalize
        
        The strategy document,that one page,it seems that simple. But then it's the details of labor laws and,these days,privacy,information management.What country and region can it leave,what country can't it leave?
    - - Nobody buys a tractor just to buy a tractor, they buy a tractor to pull something
        
        Relationship between the thing that provides the tractive force and the implements that it's pulling
        
        It's that production system view
        
        Crack the geographic whole dependencies and production process dependencies
    - - North America,New Zealand and Australia are all at a very similar agriculturally,that's region four in Deere speak
      - South America and Central America's region three,so we tend to lump those together at that level
      - Worried about the products that you need on those horizons
        
        It's really the product and the geography, makes a very matrix org and it's crazy hard, but it's better than all the alternatives
- - - - involves more active coordination and a broader scope of joint activities
    - - share in profits
      - reputation or knowledge of local politics and institutions contributed by local company
      - join together to create significant scale or combination of resources so that they can be globally competitive
      - marketing and distribution capabilities in home market
    - - using a contract to transfer rights and intangibles within foreign countries
      - monitor performance
    - - Brownfield
        
        acquire fixed assets and reuse
      - Acquisition
        
        buy a local company and integrate
      - Greenfield
        
        the unit is built from the ground-up
    - - export indirectly via local agents
  - - - access local knowledge or talent
        
        Technology
      - reduce business risk
      - access natural resources
        
        oil industry
      - access better or lower cost factors of production abroad
      - expand the market for the company's products or services
        
        large economically developed markets
        
        OECD countries.
        
        emerging markets
        
        China and India
      - present opportunities to develop new capabilities
- - - - Location
      - Raw materials
    - - Human capital
      - Technology
  - - - A nation's endowments in terms of national, human, and other resources, as well as supportive infrastructure and institutions
      - Suppliers
    - - The sixth force beyond Porter's five forces model
      - Supporting industries fosters world-class competitors in downstream industry Complementarity
    - - Competition can lead to stronger firm capabilities
      - Price rivalry or competitive rivalry
    - - Specific characteristics of demand in a firm's domestic market
      - Buyers
- - - - political
      - animosity
  - - - Canada is very similar to the United State
        
        difficult to adjust to Canada's bilingual laws and the different currency
      - Canada was easy and familiar place to do business
    - - more costly to do business in a foreign country
        
        geographic distance
        
        risks due to economic and political
        
        currency considerations
        
        unfamiliarity with the culture or socioeconomic realities
        
        lack of or different institutions
      - foreign companies
        
        build entirely new capabilities
        
        sometimes may not be as useful in the new foreign environment
  - - - too much risk or liabilities
        
        exporting or licensing.
      - local presence is necessary
        
        the need to manufacture locally to reduce cost
        
        form an alliance or joint venture with a local firm
  - - - home market
        
        first expand
        
        nearby or similar markets
        
        then expand
    - - born global firms
        
        international from a very young age
        
        how they able to operate and succeed
        
        communicate through the Internet
        
        International flows of talent and entrepreneurs
        
        local country specific advantages
        
        supportive government policies