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International Strategic Management

International Strategic Management. Is It Important Enough to Be Worth the Complexities?. You do not choose to become global. The market chooses for you; it forces your hand. Alain Gomez, CEO, Thomson, S.A. Some Reasons.

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International Strategic Management

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  1. International Strategic Management

  2. Is It Important Enough to Be Worth the Complexities? You do not choose to become global. The market chooses for you; it forces your hand.Alain Gomez, CEO, Thomson, S.A.

  3. Some Reasons • To enter more favorable markets, e.g., faster growing, more profitable, better government climate... • To reach new customers • To gain access to lower-cost labor markets and/or key/lower-cost raw materials • To spread business risk across a wider base • To gain other advantages inherent in location

  4. Different International Strategies • Multidomestic or multinational • Global or international • Transnational

  5. Application of Strategic Management Process • Use same 3-phase process • External environment(s) differ and are especially important • Many constraints • May have to do diagnosis & develop strategies for different countries

  6. Diagnosis • External environment makes the difference between countries • External scanning & analysis is especially important • Can use same 5-force model (by country or region) and same four aspects of general environment • Still need SWOT and Critical Issues (may be specific to country or region)

  7. Formulation • Still corporate-level, competitive, & other strategies • Still need rich range of alternatives • May need different strategies in each nation or region • Vertical integration has more disadvantages • Partners are usually needed • Need to decentralize more, but this creates problems

  8. Formulation: Corporate Level • Multidomestic or multinational • Global or international • Transnational

  9. Business Level Strategies • Licensing • Management contracts • Exporting • Joint ventures, production sharing, subcontract arrangements • Turnkey construction contracts • BOT (build, operate, transfer) contracts • Acquisitions • Green-field development

  10. Implementation • Usual considerations in planning actions: • Resources • Support • Reward systems • Timing • Organization structure • Culture • Tracking & control systems

  11. Needs for partners again (choice and relationships are critical) • Organizing (decentralization vs. centralization) • Staffing • Manage key cultural differences: • Power distance • Uncertainty avoidance • Individualism-collectivism • Masculinity-femininity • Time orientation

  12. Implementation (cont.) • Increased need for information & good financial measures to maintain control • Political risks • Economic risks • Importance & difficulty of maintaining good host country relationships

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