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MANAGING THE GLOBAL CORPORATION STRATEGY AND

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MANAGING THE GLOBAL CORPORATION STRATEGY AND Powered By Docstoc
					Global Strategic Management




    Philips & Matsushita:
Types of International Strategy


                                  Jeff Dyer - BYU
                      TYPES OF INTERNATIONAL STRATEGY


  MULTI-DOMESTIC STRATEGY                        GLOBAL STRATEGY

• Product is fully customized in each    • Product is standardized worldwide
country.

• Decentralized federation of national   • Centralized organization structure.
organizations. Local decision making     National subsidiaries possess little
authority.                               decision-making authority.


• Effective when differences between     • Effective when differences between
countries are large.                     countries are small.

                                         • Sources of Advantage:
• Sources of Advantage:
                                              • Cost
    • Differentiation
                                              • Ability to coordinate activities
    • Local responsiveness
                                              • Speed in new product
    • Minimize political risk                   development
    • Minimize rate exchange risk                                    Jeff Dyer - BYU
              A FRAMEWORK FOR ANALYSIS




Pressures
for Global
Integration




                         Pressures
                         for Local
                         Differentiation   Jeff Dyer - BYU
                                A Framework:
                    Global Integration - Local Differentiation

 High
                      Global
                      Strategy
Forces for Global
   Integration




                       Local              Multi-domestic
                       Strategy           Strategy
  Low

                    Low      Forces for Local   High
                              Differentiation

                                                           Jeff Dyer - BYU
                     GLOBAL STRATEGY

                          STRATEGIC INTENT: Gain Global Market
                                            Share Leadership
                          POLICIES:
                            • Specialized Production and R&D
                              Centers
                            • Break Down Value Chain and Exploit
                              Low Cost Locations
                HQ          • World Products to Build Volume and
                              Global Product Roll-out
                            • Price Leadership
                            • Optimize Global Network at Local
                              Expense
                            • International Human Resources

Source: J. de
                                                     Jeff Dyer - BYU
la Torre
                  The Extreme Global Value Chain
Country   Activities
                                                     Manu-
  A         R&D         Design     Purchasing
                                                     facturing
                                                                  Etc.


  B                    Design

  C                             Purch-
                                asing

  D                                      Manu-
                                         facturing

  E                                                   Marketing


  F                                                               Selling


  G                                                                         Distrib-
                                                                            ution

  H                                                                                     Service

                                                                                Jeff Dyer - BYU
                             THE GLOBAL MAXIMIZER


            Some Companies Emphasizing this Approach:
                   •   Matsushita         •   Royal Dutch Shell
                   •   IBM                •   Caterpillar
                   •   American Express   •   Hewlett Packard
                   •   LM Ericsson        •   Boeing
                   •   Toyota             •   Intel
                   •   Sony               •   Coca Cola

           THERE IS RELATIVELY LITTLE ROOM FOR JOINT VENTURES
           IN THIS MODEL, EXCEPT FOR UPSTREAM ACTIVITIES.
           ACQUISITIONS PLAY A SECONDARY ROLE VS. INTERNAL
           GROWTH AND GREENFIELD INVESTMENTS.
Source: J. de la
                                                              Jeff Dyer - BYU
Torre
                          2. A MULTI-DOMESTIC STRATEGY

                                STRATEGIC INTENT: Gain Key Positions in
                                                      Selected Markets
                                POLICIES:
                                  • Tailor Products to National
                                    Idiosyncrasies
                                  • Differentiated Operations

                HOLDING
                                  • Sacrifice Efficiency for Market Access
                                  • Reach Economies of Scale Upstream
                                  • Maximize Local Value Added
                                  • Gain Government Support
                                  • Use Join Ventures to Preempt
                                    Competition and Add Local Value
                                  • National Human Resources
Source: J. de
                                                                Jeff Dyer - BYU
la Torre
                      The Fully Multi-local Value Chain
Country Activities
                          Purch-   Manu-       Market             Distrib-
 A       R&D     Design   asing    facturing   -ing     Selling   ution          Service


                          Purch-   Manu-       Market             Distrib-
 B       R&D     Design   asing    facturing   -ing     Selling   ution          Service


                          Purch-   Manu-       Market             Distrib-
 C       R&D     Design   asing    facturing   -ing     Selling   ution          Service



 *
 *
 *
 *
                          Purch-   Manu-       Market             Distrib-
 Z       R&D     Design   asing    facturing   -ing     Selling   ution          Service


                                                                       Jeff Dyer - BYU
                             THE FEDERALIST


           Some Companies Emphasizing this Approach:
                •   Philips          •   Unilever
                •   Nestlé           •   Procter & Gamble
                •   BASF             •   Federal Express
                •   General Motors   •   PricewaterhouseCoopers
                •   Carrefour        •   KPMG
                •   Wal-Mart         •   Heineken

       THERE IS AMPLE ROOM FOR JOINT VENTURES AND LOCAL
       AFFILIATIONS IN THIS MODEL. ACQUISITIONS PLAY AN
       IMPORTANT ROLE TO OBTAIN DOMESTIC PRESENCE IN
       IMPORTANT MARKETS
Source: J. de
                                                         Jeff Dyer - BYU
la Torre
                  Linking Market, Strategy,
                   Structure & Processes



                  Environment / Market
                   Costs     Competitors
                   Customers Government


                      Firm Strategy


             Firm Structure and Processes


  Analysis of the environment / market precedes choice of firm
strategy which precedes choice of firm structure and processes.



                                                             Jeff Dyer - BYU
                                   Where Next ?

 High


                                                    ?
Forces for Global
   Integration




  Low
                    Low   Forces for Local   High
                          Responsiveness

                                                        Jeff Dyer - BYU

				
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posted:9/22/2011
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