International Business (6)Huang HuipingEconomic School.Whut
International Business (6) Huang Huiping Economic School.Whut
Part5Compete inGlobalMarketGlobal StrategyEntering foreign market strategyStrategies in International BusinessOperation- R&D, Marketing- Manufacturing and logistic- Human resource management
Part 5 Compete in Global Market Global Strategy Entering foreign market strategy Strategies in International Business Operation - R&D, Marketing - Manufacturing and logistic - Human resource management
6.GlobalStrategyLearning ObjectivesThe concept of strategy different strategies How can firms profit from expending their activitiesglobally ?How the pressures for Cost and the pressures forlocal responsiveness influence the choices of globastrategies?CountrydifferencesandchoicesofglobalstrategiesStrategicalliance
6. Global Strategy Learning Objectives The concept of strategy, different strategies How can firms profit from expending their activities globally ? How the pressures for Cost and the pressures for local responsiveness influence the choices of global strategies? Country differences and choices of global strategies Strategic alliance
Opening Case : AXAWhat did it show when MrBebear chose the1name AXA for this company?What was the main strategy which AXA adopted2primarily before financial crisis in 2008 ?Explain this strategy. What are the benefits ofthis strategy?Did AXA change the basic strategy after 2008?3元Explain this strategy. What are the benefits ofthis strategy? Can Intel Company adopt thisstrategy? Why ?Whatare the determinantfactors influence afirm's decisions of basic strategy?
Opening Case : AXA 1. What did it show when Mr.Bebear chose the name AXA for this company? 2. What was the main strategy which AXA adopted primarily before financial crisis in 2008 ? Explain this strategy. What are the benefits of this strategy? 3. Did AXA change the basic strategy after 2008? Explain this strategy. What are the benefits of this strategy? Can Intel Company adopt this strategy? Why ? 4. What are the determinant factors influence a firm’s decisions of basic strategy?
Opening case study:Localization The strategy focus on increasing profitabilityby customizing the firm's goods and servicesso that they provide a good match to taste andpreference in different nations.Localization of manufacturing, marketing, andR&D, human resourcing.Adaptation: in the industry whichdifferentiation is more important than costcontrol
Opening case study : Localization The strategy focus on increasing profitability by customizing the firm’s goods and services so that they provide a good match to taste and preference in different nations. Localization of manufacturing, marketing, and R&D, human resourcing. Adaptation: in the industry which differentiation is more important than cost control
Opening case study : Standardizationglobal standardization strategy focuseson increasing profitability and profit growthby reaping the cost reductionsThe strategic goal is to pursue a low-coststrategy on a global scaleThis strategy makes sense when there arestrong pressures for cost reductions anddemands for local responsiveness areminimal
Opening case study : Standardization global standardization strategy focuses on increasing profitability and profit growth by reaping the cost reductions The strategic goal is to pursue a low-cost strategy on a global scale This strategy makes sense when there are strong pressures for cost reductions and demands for local responsiveness are minimal
What arethe determinantfactors influenceafirm'sdecisions of basic strategy?Company's core competenceLocation /factor endowmentMarket size/scalecompetitionIndustry /fields
What are the determinant factors influence a firm’s decisions of basic strategy? Company’s core competence Location /factor endowment Market size/scale competition Industry /fields
6.1 Strategyandthefirm6.1.1 Strategy and valueA firm's strategy refers to the actions that managerstake to attain the goals of the firmProfitability can be defined as the rate of returnthefirm makes on its invested capitalProfit growth is the percentage increase in net profitsovertimeExpanding internationally can boost profitability andprofitgrowth
6.1 Strategy and the firm 6.1.1 Strategy and value A firm’s strategy refers to the actions that managers take to attain the goals of the firm Profitability can be defined as the rate of return the firm makes on its invested capital Profit growth is the percentage increase in net profits over time Expanding internationally can boost profitability and profit growth
Figure : Determinants of Enterprise ValueReduce CostsProfitabilityAdd ValueandRaise PricesEnterpriseValuationSell More in ExistingMarketsProfitGrowthEnter NewMarkets
Figure : Determinants of Enterprise Value
6.1.2ValuecreatedV=Value of product to anaverage consumerV-pV-CP=PriceperunitP-CC-CostofproductionperunitV-P=ConsumersurplusperunitCCP-C=Profitper unit soldV-C-Valuecreatedper unitTwo basic conditions determine a firm's profit:(1) The amount of value customers place on the firm'sproducts; (V)(2) The firm's cost of production (C)
6.1.2 Value created Two basic conditions determine a firm’s profit: (1) The amount of value customers place on the firm’s products; (V) (2) The firm’s cost of production (C)