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Chapter 8 Strategic Challenges for the 21st Century

Chapter 8 Strategic Challenges for the 21st Century. Learning Objectives. By the end of this chapter, students should be familiar with: · global expansion strategies · tactics for pursuing global strategies · using global strategies to enhance competitive positioning

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Chapter 8 Strategic Challenges for the 21st Century

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  1. Chapter 8 Strategic Challenges for the 21st Century

  2. Learning Objectives By the end of this chapter, students should be familiar with: · global expansion strategies · tactics for pursuing global strategies · using global strategies to enhance competitive positioning · relevant issues in assessing international opportunities · the challenges of the future

  3. Stages of International Development • Domestic Stage - Possible exporting • International Stage - Significant exporting • Multinational Stage - Marketing and production facilities throughout world • Global Stage - Organization not associated with any one country

  4. Creating anInternational Mind-Set CEOs can create a sense of urgency about global matters by • frequently discussing global issues with employees, the board of directors, and the media • recruiting and promoting foreign nationals for key managerial roles • sending some managers to special training programs to help increase their global awareness

  5. Global Product/Market Strategy • Multidomestic Product/Market Strategy • Global Product/Market Strategy • Transnational Product/Market Strategy

  6. Global Expansion Tactics • Exporting • Licensing • Franchising • Joint Ventures • Greenfield Ventures

  7. Global Cost Leadership • Cost reductions through foreign assembly or manufacturing. • Branding of finished products that are subcontracted to low-cost foreign manufacturers. • Global sourcing of low-cost foreign components or raw materials. • Expanding markets leading to economies of scale. • Transfer of technological know-how through international joint venture

  8. Global Differentiation Global strategies can also lead to competitive advantages through differentiation. • Distribution of foreign products in the U.S. • Sale of U.S. products in foreign countries. • Superior quality through joint venture with international firms. • Licensing of unique product technology from abroad.

  9. Global Environments & Opportunities • Mexico • China/Hong Kong • The Old Soviet Union • The European Union

  10. Country Characteristics • Government • Transportation • Educational Systems • Economic Health • Taxes • Currency/Exchange

  11. Conditions that Create Advantages for Nations • Factors of Production--uncommon raw materials, special workers, better schools or training • Demand Conditions--discriminating buyers, trend setters • Related and Supporting Industries--best suppliers in world, firms in related industries global leaders • Firm Strategy, Structure and Rivalry--customary practices are conducive to success, the most talented managers, strong competitors

  12. Managerial Challenges Trends - • Technological advancements • Transportation and communications • Blended cultures • More educated, demanding customers • Destabilized industries

  13. Managerial Challenges Implications for industries - • Lower entry barriers in many industries • Faster imitation • Collapsing product-life cycles • A global retail marketplace • A highly educated, increasingly mobile global labor market.

  14. Managerial Challenges Challenges for managers: • retaining valuable employees • creating and preserving competitive advantage • holding back new entrants • serving increasingly demanding customers • choosing and timing technology investments at a time when change is so rapid.

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