| Chapter 8 : Chapter 8 International Strategy Michael A. Hitt
R. Duane Ireland
Robert E. Hoskisson ©2000 South-Western College Publishing |
| Slide2 : Chapter 3 Internal Environment Chapter 2 External Environment Strategic Intent Strategic Mission Strategic Competitiveness Above Average Returns Feedback Strategy Formulation Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 6 Corporate-Level Strategy Chapter 8 International Strategy Chapter 9 Cooperative Strategies Chapter 7 Acquisitions & Restructuring Strategy Implementation Chapter 10 Corporate Governance Chapter 11 Structure & Control Chapter 12 Strategic Leadership Chapter 13 Entrepreneurship
& Innovation Strategic Actions |
| Slide3 : International Strategy Opportunities and Outcomes Identify International Opportunities Explore
Resources and Capabilities Use Core Competence Strategic
Competitiveness
Outcomes
International Strategies Modes of Entry Increased
Market Size Return on Investment Economies of Scale and Learning Location Advantage International
Business-Level
Strategy Multidomestic Strategy Global
Strategy Transnational Strategy Exporting Establishment of New Subsidiary Exporting Strategic
Alliances Acquisition Management Problems
and Risk Management Problems
and Risk Higher Performance Returns Innovation |
| Slide4 : Selling Products or Services Outside a Firm’s Domestic Market International Strategy Lifecycle |
| Slide5 : Example: Aircraft manufacturers Boeing or Airbus Example: Japanese electronics or automobile manufacturers Motivations for International Expansion |
| Slide6 : Motivations for International Expansion Economies of Scale or Learning Expanding size or scope of markets helps to achieve economies of scale in manufacturing as well as marketing, R & D or distribution |
| Slide7 : Porter’s Determinants of National Advantage Home Country of Origin Is Crucial to International Success |
| Slide8 : International Strategy Opportunities and Outcomes Identify International Opportunities Explore
Resources and Capabilities Use Core Competence Strategic
Competitiveness
Outcomes
International Strategies Modes of Entry Increased
Market Size Return on Investment Economies of Scale and Learning Location Advantage International
Business-Level
Strategy Multidomestic Strategy Global
Strategy Transnational Strategy Exporting Establishment of New Subsidiary Exporting Strategic
Alliances Acquisition Management Problems
and Risk Management Problems
and Risk Higher Performance Returns Innovation |
| Slide9 : International Differentiation Countries with advanced or specialized factor conditions most likely to use this strategy Example: Japan, Germany, U.S. International Low Cost Business-Level International Strategies |
| Slide10 : International Focus Strategies International Integrated Low Cost/Differentiation Business-Level International Strategies |
| Slide11 : Global Strategy Transnational Strategy Multi-Domestic Strategy Corporate-Level International Strategies |
| Slide12 : Business units in each country are independent of each other Assumes markets differ by country or regions Focus on competition in each market Prominent strategy among European firms due to broad variety of cultures and markets in Europe Strategy and operating decisions are decentralized to strategic business units (SBU) in each country Products and services are tailored to local markets Corporate-Level International Strategies |
| Slide13 : Products are standardized across national markets Decisions regarding business-level strategies are centralized in the home office Strategic business units (SBU) are assumed to be interdependent Emphasizes economies of scale Often lacks responsiveness to local markets Requires resource sharing and coordination across borders (which also makes it difficult to manage) Corporate-Level International Strategies |
| Slide14 : Seeks to achieve both global efficiency and local responsiveness Difficult to achieve because of simultaneous requirements for strong central control and coordination to achieve efficiency and local flexibility and decentralization to achieve local market responsiveness Must pursue organizational learning to achieve competitive advantage Corporate-Level International Strategies |
| Slide15 : International Corporate Strategy When is each strategy appropriate? Multi-
Domestic |
| Slide16 : International Corporate Strategy When is each strategy appropriate? Multi-
Domestic Global
Strategy |
| Slide17 : International Corporate Strategy When is each strategy appropriate? Multi-
Domestic Global
Strategy Trans-
national |
| Slide18 : International Strategy Opportunities and Outcomes Identify International Opportunities Explore
Resources and Capabilities Use Core Competence Strategic
Competitiveness
Outcomes
International Strategies Modes of Entry Increased
Market Size Return on Investment Economies of Scale and Learning Location Advantage International
Business-Level
Strategy Multidomestic Strategy Global
Strategy Transnational Strategy Exporting Establishment of New Subsidiary Exporting Strategic
Alliances Acquisition Management Problems
and Risk Management Problems
and Risk Higher Performance Returns Innovation |
| Slide19 : Common way to enter new international markets No need to establish operations in other countries May have high transportation costs May have less control on marketing and distribution May encounter high import tariffs Difficult to customize products Establish distribution channels through contractual relationships Choice of International Entry Mode Exporting |
| Slide20 : Choice of International Entry Mode Licensing |
| Slide21 : Choice of International Entry Mode Strategic Alliances |
| Slide22 : Choice of International Entry Mode Acquisitions |
| Slide23 : New Wholly-Owned Subsidiary Choice of International Entry Mode |
| Slide24 : International Strategy Opportunities and Outcomes Identify International Opportunities Explore
Resources and Capabilities Use Core Competence Strategic
Competitiveness
Outcomes
International Strategies Modes of Entry Increased
Market Size Return on Investment Economies of Scale and Learning Location Advantage International
Business-Level
Strategy Multidomestic Strategy Global
Strategy Transnational Strategy Exporting Establishment of New Subsidiary Exporting Strategic
Alliances Acquisition Management Problems
and Risk Management Problems
and Risk Higher Performance Returns Innovation |
| Slide25 : Strategic Competitiveness Outcomes |
| Slide26 : International Strategy Opportunities and Outcomes Identify International Opportunities Explore
Resources and Capabilities Use Core Competence Strategic
Competitiveness
Outcomes
International Strategies Modes of Entry Increased
Market Size Return on Investment Economies of Scale and Learning Location Advantage International
Business-Level
Strategy Multidomestic Strategy Global
Strategy Transnational Strategy Exporting Establishment of New Subsidiary Exporting Strategic
Alliances Acquisition Management Problems
and Risk Management Problems
and Risk Higher Performance Returns Innovation |
| Slide27 : Political Risk Major Risks of International Diversification |
| Slide28 : Economic Risk Major Risks of International Diversification |
| Slide29 : Management Problems Limits To International Expansion |