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Chapter 10. Global Strategy - Competing Around The World
Chapter 10. Global Strategy - Competing Around The World
Going Global: Why? A company is “going global” if they can improve economic value
creation and enhance competitive advantage. Profit to compete globally including
gaining access to more markets large, gain access to low-cost input factors, and
develop new competencies. The disadvantage of competing globally is the responsibility
to foreigners, possible loss of reputation, and possible loss of capital intellectual.
Going Global: Where and How? Most of the costs and risks involved in off-market
expansion domestic created by distance. To assist MNE in deciding which will compete
globally, introduces CAGE distance frame. CAGE is an acronym for different types of
distance: Culture, Administrative and political, Geographic, and Economic.
How do MNEs Enter Foreign Markets?
The Integration-Responsiveness
Framework: Global Strategy Positions and
Representative MNEs 10 -24
INTEGRATION-RESPONSIVENESS FRAMEWORK
Global-Standardization strategy: • Economies of
scale and location economies • Pursuing a global
division of labor based on best of class
capabilities reside at the lowest cost Ex: Lenovo’s
R&D in Beijing, Shanghai, and Raleigh; production
center in Mexico, India, and China Transnational
Strategy: • Combination of localization strategy
(high responsiveness) with global standardization
strategy (lowest cost position attainable) • “Think
globally but act locally”
Chapter 14. Strategic Control Mechanisms
Strategic Control
Feedback strategic control
•Is a combination of sequential and interactive approaches. Although
strategy formulation, strategy implementation and strategy monitoring
appear to be sequential. Financial
Perfomance
Efficiency
performance
People
Performance
Performance Metrics
• Feedback strategic control is accurately measured by
performance, market performance, efficiency/productivity
performance and people performance.
Performance = Results/Resources
Financial Performance
•For most of all organization s intent on making profit, or at least, continue to
exist, financial performance is most important. These modes are expressed
through financial metrics.
Probability measures
Are financial indicators show the organization
or the company’s ability to generate earnings
as compared to its expenses and other
relevant cost incurred during a specific period
Probability Measures