International Business Environments and Operations

Part Five Global Strategy, Structure, and Implementation

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Chapter 11

The Strategy of International Business

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Chapter Objectives
To identify how managers develop strategy To examine industry structure, firm strategy, and value creation To profile the features and functions of the value chain framework To assess how managers configure and coordinate a value chain To explain global integration and local responsiveness To profile the types of strategies firms use in international business
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The Role of Strategy in International Business

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Industry, Strategy ,and Firm Performance

Industry organization paradigm leading strategy perspectives The exceptions of imperfect competition The idea of industry structure: The Five Forces Model

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Five Forces Model

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Industry Change
Industry structure changes because of events like

Competitors moves
Government policies Changes in economics

Shifting buyer preferences

Technological developments Rate of market growth

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Strategy and Value

Strategy helps managers assess the companys present situation, identify the direction the company should go, and determine how the company will get there. Creating Value Cost Leadership Differentiation

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The Firm as Value Chain

What is the value chain? Using the value chain
Configuration Macro Cost Factors Cluster Effects Logistics Digitization Economies of Scale Business Environment
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Coordination
Coordination Concerns National Cultures Learning Curve Operational Obstacles Subsidiary Networks

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Change and the Value Chain

The configuration and coordination of value chains respond to changes in customers, competitors, industries, and environments.
Caveat: The Risk of Strategy

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Global Integration versus Local Responsiveness

Pressures for Global Integration Globalization of Markets Efficiency Gains of Standardization Pressures for Local Responsiveness Consumer Divergence Host Government Policies

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When Pressures Interact

The Integration-Responsiveness grid helps managers measure the global and local pressures that influence the configuration and coordination of their value chains.

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Integration Responsiveness Grid

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Types of Strategy

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Future: Whats New in the World of Strategy Types

Evolution of the Multinational Corporation Visions of the Future The Metanational Company Micro-Nationals The Cybercorp

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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