Post on 19-Dec-2015
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THE POLITICAL SPECTRUM
DEMOCRACY TOTALITARISM
Reactionary Conservative Liberal Radical
Authoritarian Facist Communist Authoritarian
Rule people
Control souls
Economy+Politics
Islam
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COMPARATIVE MEASURES OF FREEDOM
POLITICAL RIGHTS
CIVIL RIGHTS
Fair elections, representatives with power, political parties, rights of minorities
Freedom of press, equality under law, social freedom, government-corruption
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ECONOMIC SYSTEMS
Market Allocation: Consumers allocate resources. Competition + Consumer Protection (USA)
Command Allocation: State Planners.
Mixed Systems: Governmental Expenditures/GDP 32% USA, 64% Sweden
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POLITICS AND MANAGEMENT DECISIONS
• Political risks: Micro (population) and Macro (government)
• Government intervention: Individual-communitarian paradigm
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INDEX OF ECONOMIC FREEDOM
Source: Heritage foundation www.heritage.org
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Map of countries by GDP (PPP) per capita, based on the 2005 IMF data.
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WTO
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WTO
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Trade with China : 2000-6 NOTE: All figures are in millions of U.S. dollars.
YearExportsImportsBalance
55,185.7 287,774.4 -232,588.6
41,925.3 243,470.1 -201,544.8
34,744.1 196,682.0 -161,938.0
13,111.1 81,788.2 -68,677.12000
2004
2005
2006
SOURCE: U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch, Washington, D.C. 20233
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Trade with China : 2007 NOTE: All figures are in millions of U.S. dollars.
MonthExportsImportsBalance
January 2007 4,364.2 25,635.0 -21,270.9
February 2007 4,630.7 23,064.5 -18,433.8
March 2007 5,479.4 22,725.4 -17,246.1
April 2007 4,849.4 24,222.9 -19,373.5
TOTAL 19,323.6 95,647.9 -76,324.3
SOURCE: U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch, Washington, D.C. 20233
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Source: PRC General Administration of Customs, China's Customs Statistics
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Income Gini coefficients in the world
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MOTIVATION PUSHES AND PULLS TO INTERNATIONALIZE
TRADITIONAL MOTIVATIONS(Bartlett)
Expand sales, acquire resources, minimize risk
. Secure Key Supplies
Access Low Cost Factors
Local Market Saturation-Competition
Market Seeking Behavior
Technology – Vernon Product Life Cycle
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EMERGING MOTIVATIONS
Economic, Technological, Social Developments
Amortization of R&D Expenditures(public telephone switching systems)
Shortening Product Life Cycle
Scanning & Learning Capabilities
Competitive Positioning (Cross Subsidization)
40PM 4.4 Natural and technological environments
NATURAL ENVIRONMENT
Energy costs Geography
TECHNOLOGICAL ENVIRONMENT
RegulationImprovement
InfrastructureKnow howChange
Raw materials Pollution
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Spending patternsEconomic
PM 4.3 Demographic and economic environments
ECONOMIC ENVIRONMENT
Age
DEMOGRAPHIC ENVIRONMENT
PopulationFamily Education
42PM 4.5 Political and cultural environments
POLITICAL ENVIRONMENT
Interest groupsEnforcementLegislation
CULTURAL ENVIRONMENT
ShiftsSubculturesValues
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LEGAL ENVIRONMENT
• Public International Law: International conventions, custom
International Court of Justice (ICJ) • Private International Law:
Common Law-tradition-precedent (English) US, India, Singapore- detailed contracts
Civil law(Codified) (Napoleonic Code) Thailand, Japan China. US Uniform Commercial Code.
• Theocratic law : Islamic law Sha’riah
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EstablishmentJuridiction of Host-Home Country
Intellectual Property Paris Union, Right of Priority
Antitrust: US Sherman Act (1890) EU Competition law
Licensing:
Law-Competition/ Competitors
Champagne perfume (YSL)France-US Counterfeiting
Bribery: Foreign Corrupt Practice Act (197)7
Patent Cooperation Treaty(PCT) 39 European Patent Office
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ORIENTATION OF MANAGEMENT & COMPANIES
Ethnocentric
Home Country Superior, Similarities
Regiocentric Geocentric
Similarities & Differences Similarities & Differences
In a world region In home & host Countries
Polycentric
Each Host Country is Unique, Differences
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INTERNATIONAL STRATEGY-EXPORTS
• Local Distinctive Competence
Raw Material
Know how
Manpower
• International risks
Knowledge protection
Investment protection
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?
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STAGES OF DEVELOPMENT
Strategy/ Stage
DomesticInternationalMultinationalGlobalTransnational
ModelCoordinatedDecentralizedCentral hub
Integrated
Network
View of the World
Home Country
Extension markets
National markets
Global markets or resources
Global markets and resources
OrientationEthnocentricEthnocentricPolycentric MixedGeocentric
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INTERNATIONAL STRATEGY OF SELECTED FIRMS
GlobalMultidomesticTransnational
Ethnocentric Ikea 1 Danone Coca Cola
Polycentric Ikea2 Unilever
Regiocentric
Geocentric
60PM 11.2 The generic value chain
(Source: Michael E. Porter, Competitive Advantage (New York: Free Press, 1985), p.37.)
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ILLUSTRATIVE CONFIGURATION ActivitiesUS Canada UK France Germany Japan
Inbound logistics
Operations
Components
Assembly
Outbound logistics
Order processing
Physical distribution
Marketing
Advertising
Sales force
Promotion materials
x x x x
x x x x x
xx x x x x x
x x x x x x x x x x x x x
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ILLUSTRATIVE CONFIGURATION
ActivitiesUS Canada UK France Germany Japan
Service
Procurement
Technology Dvt
Human resource
Management
Firm structure
x x x x x x x xx x
x x x x x x
x
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ILLUSTRATIVE COORDINATION
ActivitiesConfiguration Coordination
Operations
Marketing & Sales
Service
Procurement
Technology Dvt
Location of Tasks allocation,production Networking, Technology transfer Product line Brand worldwideCountry Sales coordinationAdvertising\Promotion Similar channels Pricing coordination
Location Similar standards
Location Managing suppliersLocation Tasks allocation Knowledge transfer Sequence of products
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CONFIGURATION OF ACTIVITIES
High
Low
Coordination
of Activities
Geographic Dispersed Geographic Concentrated
Extensive Coordination among subsidiaries
Simple Global
Strategy
Country-centered strategy by multinationals operating in one country
Export-based strategy, decentralized marketing
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PORTER’S DIAMOND
Factor Demand
Conditions Conditions
Chance Firm Strategy
Structure &
Rivalry
Related &
Supporting Government
Industries
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PORTER’S DIAMOND DISCUSSION
Factors Conditions• Human, Physical resources, Capital,
Knowledge, Infrastructure
•Hierarchy, factors: Basic-Advanced
• Factor Creation
Demand Conditions• Demand Composition
• Demanding Buyers
• Anticipatory Buyers
• Pattern Growth
Firm Strategy, Structure& Rivalry• Style of Management & Structure
• National Norms
• Rivalry
Supporting & Related Industries• Supplier Industries & Development
• Related Industries & Market
• Related Industries & Production
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ITALIAN SUPPLIER INDUSTRIES TO FOOTWEAR
Leather Footwear
Parts of Design Footwear Services
Leather Processed working Leather Machinery
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ITALIAN INDUSTRIES RELATED TO FOOTWEAR
Parts of Footwear
Leather Processed working Leather Machinery
Design Services
Leather Leather Leather Athletic Clothing Handbags Footwear Footwear
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PARTIAL CLUSTURING IN DANISH ECONOMY
Barley, Malt Food Processing Refrigeration Yeast Equipment Equipment
Pork Beer Dairy Industry
Trypsin Fermentation Purification (Enzyme) Insulin Equipment Technology
Fermented Insulin Fermented
Enzymes