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CS3 – Global Strategy, G5 (林奧都 - Aldo, 廖莉琪 - Angela, 陳威霖 - Willie, 劉津綝 -…
CS3 – Global Strategy
National Origins of Competitive Advantage
Diamond Model
Five Forces Model
Factor conditions
nation's endowments in terms of national, human, and other resources
Demand conditions
to do a specific characteristics of demand
in a firm's domestic market.
for example like location or raw materials
Competitive intensity
highly competitive environments tend to stimulate firms to outperform others
related and
supporting Industries including complementarity
Applying the Framework
many countries trying to develop a competitive advantage in different Industries
useful in identifying a potential source of future competition
useful in understanding your company's own competitive advantages relative to
foreign competitors
conclusion
diamond model helps companies appreciate how strong
globally competitive clusters form
Foreign Market Entry Part1
sales
procurement
why companies usually want to go international
texpand the market
access better or lower cost factors of production
access local knowledge or talent
reduce business risk
develop new capabilities
leverage the company's core capabilities
Market Entry Modes
Wholly-owned subsidiary
estabblish a 100% owned unit in a foreign country
3 ways
Greenfield
build the unit from scratch
Brownfield
acquire fixed assets and reuse
Acquisition
buy a local company and integrate
Modes of foreign market entry
Wholly-owned subsidiary
Joint Venture
Strategic Alliance
Licensing
Exporting
less control & less ownership
fewer costs and risks
lesser financial returns
lower commitment market entry modes
less control and a smaller share of the profits
iRobot
a greater degree of ownership and control
How to enter foreign market
Strategic Alliance
with Local partner；more active coordination
Grew in scope over time (e.g. marketing,R&D)
Joint Venture
Jointly-owned independent company
Contributed resources($ or others)
Manage jointly, and share in profit
may be Required by law to have local joint ventures
Licensing(Franchising)
Contract with local partner
to transfer intangibles' rights.
Monitor performance
.
Wholly-Owned Subsidiary
Establish a 100% owned unit in foreign country.
Greenfield
build the unit from scratch
Brownfield
acquired fixed assets and reuse
:Acquisition
buy a local company and integrate
Exporting
Sale into foreign markets.
direct / via an agent
Foreign Market Entry Part 2
Challenges in foreign markets
adapting to new regulations
Trade and Investments barriers
Different Institutions
Different languages and culture
Different currency
Netflix expanding to Canada
Relatively same languages
Few trade and investments barriers
Hard to adjust to bilingual laws
Both has different currencies
Costly of doing business abroad
Unfamiliar with culture and economic circumstances
Geographic distance
Economic conditions
Currency differences
Stages model of Internationalization
Expand into nearby markets
only use lower risk entry modes
over time, expand into more distant markets with higher risk entry modes
Overcome foreign entry challenges
Global communication networks
Global flows of talent and entrepreneurs
Local advantages in resources and knowledge
Government policies to overcome barriers
causes of globalization
advanced telecommunications
technological improvements in communication and transportation
for ex: the use of containers and the creation of multimodal logistics
reduced transporation costs
air transportattion
falling trade and investment barriers
had to be engineered through
painstaking negotiations and treaties between countries
growth of MNEs and FDI
growing share of exports for China and India
China: trade surplus
India: trade deficit
Globalization
process of closer integration
exchange between countries and people worldwide
economic globalization
international trade
increase in 1960s
from 22% to 55%
investment flows
FDI (foreign direct investment) grown very rapidly
since 1970
movement of labor
multinational firms
G5
林奧都 - Aldo
廖莉琪 - Angela
陳威霖 - Willie
劉津綝 - Alice
甄㛩媄 - Yvonne
林美娜 - Hana
黃子芸 - Delia