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Chapter 11: Strategy and Organization in the International Firm, Global…

- - - - Monitor and respond to global competitors,
        foreign rivals that compete on a global basis are more threatening than those that compete only locally
  - - - Example; Mining equipment and parts.
    - - Example,
        Nestle, they employ highly autonomous nationals(reliable and self reliant), who match local needs and conditions.
        
        they are often perceived as local firms in each of its markets
        
        They vary in how and where they offer their product in distribution, marketing and pricing depending on the country.
        
        Spain, intense, full body coffee
        
        Northern Europe, mild and aromatic
      - Advantages;
        
        Locally produced products can be better adapted for local market
        
        There is minimal pressure on HQ staff as each local operations is managed by individual mangers in each country.
      - Disadvantages;
        
        Each foreign subsidiary(subs) manager tend to form local strat plans, org culture and business processes that may differ substantially from HQ
        
        Limited info sharing reduced possibility of developing a knowledge based comp advantage
    - - Example
        Samsung Electronics;
        South Korean consumers electronics turned international
        
        The integrated value chain approach allows Samsung to share the knowledge and advance expertise globally amongst its biz units worldwide
        
        Marketing activities are standardized and focus on making samsung a Globally recognized brand.
      - Advantages;
        
        Provides the ability to respond to worldwide opportunities, creating econ of scales, leading to lower operational costs
        
        Product/Process improved quality, due to simplified manufacturing and other processes.
        
        Easier to implement;
        
        Converging buyer characteristics worldwide
        
        Growing acceptance of global brands
        
        increase diffusion of uniform tech
      - Disadvantages;
        
        Challenging for management to closely coord the activities of widely dispersed international operations
        
        The firm must maintain ongoing communications between HQ, and its subs, as well as between the subs
        
        may result in a loss of of responsiveness and flexibility in local markets
    - - Implement transnational strat, the firm should;
        
        Exploit scale econs, by sourcing reduced sets of global suppliers and concentrate manufacturing in few locations where competitive advantage can be maxed.
        
        Organize production ,marketing and other value chain activities on a global scale
        
        Optimize local responsiveness and flexibility
        
        Facilitate global learning and knowledge transfer
        
        Coord global competitive move, that is rather than following a country by country approach, dealing with competitors globally
      - Example; Lenovo, Chinese producer of personal computers and laptops,
        
        gained its best sails by being the PC arm of IBM, gaining global sales force and strong global brands
        
        thought based in America, the production is in China,(For asian market), Mexico(For America) and Poland(for Europe)
        
        they do production in low-cost countries to generate the greatest cost efficiencies and econ scale, keeping everything but the software to adapt to the local consumers.
      - Challenges;
        
        Given the difficulty of balancing central control and local responsiveness, most MNEs find it difficult to implement a transnational strat.
        
        In the long run almost all need to include elements of localized decision making, because each country has unique characteristics