1. Globalization and Competitive Strategy Brian Burton Western Washington University

2. Competitive Strategy: The Value Chain

3. The Value Chain (cont.) Any part can give competitive advantage Examples cheaper inputs quality production processes more efficient employees The main source of competitive advantage

4. Competitive Strategy (cont.) Michael Porter cost differentiation focus stuck in the middle The best-cost strategy

5. The Effect of Globalization Reasons for differentiation markets differ do these differences affect purchasing behavior? Separate from the entry decision and corporate strategy how to compete around the world

6. Levitt�s Arguments Technology standardizes demand You must compete on cost standardization of consumers No differentiation on quality standardizes product

7. Levitt�s Arguments (cont.) The question of focus strategies large vs. small companies are there market segments around the world? Is everything the same? sharing segments vs. homogeneity Does his view fit all markets? standardization of processes

8. Levitt�s Conclusions The two questions standardization vs. differentiation centralization vs. decentralization Standardization? Yes convince consumers Centralization? Yes in a global firm strategy comes from the top The evidence (Douglas and Rhee)