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PART2, MNE strategies, Globalization, SMMCG9[CS-3], Foreign Market Entry,…

- - - - e.g.Nesta
  - - - e.g.x.Lenovo's R&D
  - - - e.gStarbuck
  - - - Both high pressure for cost reductions and
        local responsiveness
        
        matrix structure
- - - - e.g.Tesla
  - - - e.g.India McDonald's
    - - e.g.Tesla Gigafactory
- - - - e.g. A cost of freight has fallen by 80% since 1940
    - - e.g. The cost has fallen by 90% now
    - - New types occured
        
        Internet
        
        E-mail
        
        Social media
  - - - Treaties
        
        Bilateral
        
        Regional groups of countries
        
        e.g.EU/NAFTA/GATS/WTO
      - Country
        
        Developed countries
        
        Reject
        
        US
        
        Raise unilateral actions
        
        Developing countries
        
        Accept
        
        India
        
        Bulk import
        
        China
        
        Trade surplus
- - - - Using scale and deploying common
        resources across global operations
        
        e.g.Tesla
    - - High
        
        e.g.India McDonald's
      - Low
        
        e.g.Tesla Gigafactory
  - - - Low pressure for cost reductions, high pressure for local
        responsiveness
        
        e.g.Nesta
    - - High pressure for cost reductions, low pressure for local responsiveness
        
        e.g.x.Lenovo's R&D
    - - Both low pressure for cost reductions and local responsiveness
        
        e.gStarbuck
    - - Combination of localization strategy and global strategy
        
        Both high pressure for cost reductions and
        local responsiveness
        
        matrix structure
  - - - e.g. standardize an appliance
    - - matrix structure
        
        Geographical location
        &
        products
  - - - Benefit :smiley:
        
        reduce exchange rate expose
      - Risk :!:
        
        expensive to implement
        
        little or no economics of scale
        
        intellectual property expropriation
    - - Benefit :smiley:
        
        economics of scale
        
        low cost
      - Risk :!:
        
        exchange rate exposure
        
        continually moving into more undeveloped countries in order to keep wages down
    - - Benefit :smiley:
        
        economics of scale
        
        low cost to implement
        
        low risk by exporting or licensing the product or franchising
      - Risk :!:
        
        highly affected by exchange rate fluctuations
        
        intellectual property may be expropriated or stolen by those in foreign market
        
        limited local responsive
    - - Risk :!:
        
        matrix structure is costly
        
        difficult to implement
        
        lead to confusion of the workers
        
        exchange rate
        
        intellectual property expropriation
      - Benefit :smiley:
        
        simultaneously cost down and local responsive
- - - - e.g. A share of global GDP has grown from 22% to over 50%
  - - - Shipping
        
        e.g. A cost of freight has fallen by 80% since 1940
      - Air transport
        
        e.g. The cost has fallen by 90% now
      - Telecommunication
        
        New types occured
        
        Internet
        
        E-mail
        
        Social media
    - - Engineered through painstaking negotiations & treaties between countries
        
        Treaties
        
        Bilateral
        
        Regional groups of countries
        
        e.g.EU/NAFTA/GATS/WTO
        
        Country
        
        Developed countries
        
        Reject
        
        US
        
        Raise unilateral actions
        
        Developing countries
        
        Accept
        
        India
        
        Bulk import
        
        China
        
        Trade surplus
- - - - access local knowledge or talent
    - - economically developed markets
        
        OECD countries
        
        China
        
        India
    - - McDonald's or Yum! Brands
    - - location specific advantages
        
        doing IT development in India
      - learning from foreign country operations
  - - - contract to transfer intagibles
        
        e.g.technology,know how,brands
      - monitor the performance
    - - involve more active coordination
    - - sale into foreign markets
        
        export directly
        
        export inderctly
        
        via local agent
    - - jointly-owned independent company
        
        manage jointly
        
        Starbucks with India Tata group
        
        share profits
    - - greenfield unit
        
        build from the ground-up
      - brownfield venture
        
        acquire fixed assets reuse
      - acquisition
        
        buy a local company and intergrate
- - - - OECD countries
      - China
      - India
  - - - doing IT development in India
- - - - e.g.technology,know how,brands
  - - - export directly
      - export inderctly
        
        via local agent
  - - - manage jointly
        
        Starbucks with India Tata group
      - share profits
  - - - build from the ground-up
    - - acquire fixed assets reuse
    - - buy a local company and intergrate
- - - - Consumer electronics
        
        Japan
        
        Korea
      - Software
        
        India
        
        U.S.A
        
        Israel
      - Switzerland
        
        chemicals
        
        Pharmaceutical industry
  - - - Predict
        
        Identifying a potential source of future competition
      - Demand conditions
      - competitive intensity in the focal industry
      - related and supporting industries
      - power of suppliers
      - understand better how to compete with these foreign competitors
      - bind together with partners and local governments
        
        create clusters
    - - nation's endowments
      - human
      - supportive infrastructure
      - institution