การจัดการกลยุทธ์ในธุรกิจข้ามชาติ Strategic Management in the Multinational Company
Chapter Copyright© 2004 Thomson Learning All rights reserved 4 Strategic Management in the...
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Transcript of Chapter Copyright© 2004 Thomson Learning All rights reserved 4 Strategic Management in the...
Chapter
Copyright© 2004 Thomson Learning All rights reserved
4Strategic Management in the Multinational Company:
Content and Formulation
Copyright© 2005 South-Western/Thomson Learning All rights reserved
Learning Objectives
• Define differentiation and low cost• Understand how low-cost and differentiation strategists
make money• Recall multinational examples of use of generic
strategies• Understand competitive advantage and value chain• Understand offensive and defensive strategies
• Define differentiation and low cost• Understand how low-cost and differentiation strategists
make money• Recall multinational examples of use of generic
strategies• Understand competitive advantage and value chain• Understand offensive and defensive strategies
Copyright© 2005 South-Western/Thomson Learning All rights reserved
Learning Objectives
• Understand basics of multinational diversification• Understand how traditional strategy formulation
techniques apply to the multinational company• Realize both the convergence and divergence in
strategies
• Understand basics of multinational diversification• Understand how traditional strategy formulation
techniques apply to the multinational company• Realize both the convergence and divergence in
strategies
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Basic Strategy for the Multinational Company
• Multinational companies use many of the same strategies as domestic companies
• Multinational companies use many of the same strategies as domestic companies
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Competitive Advantage and Multinational Applications of Generic Strategies
• Generic strategies: basic ways to achieve and sustain competitive advantage
• Competitive advantage: when a company can outmatch its rivals in attracting and maintaining its targeted customers
• Generic strategies: basic ways to achieve and sustain competitive advantage
• Competitive advantage: when a company can outmatch its rivals in attracting and maintaining its targeted customers
Copyright© 2005 South-Western/Thomson Learning All rights reserved
Competitive Advantage and Multinational Applications of Generic Strategies (cont.)
• Differentiation strategy: providing superior value to customers• Ex.: BMW competing in the world market by
providing high-quality and performance sports cars• Low-cost strategy: producing at a lower cost than
competitors• Ex.: Korean semiconductor firms
• Differentiation strategy: providing superior value to customers• Ex.: BMW competing in the world market by
providing high-quality and performance sports cars• Low-cost strategy: producing at a lower cost than
competitors• Ex.: Korean semiconductor firms
Copyright© 2005 South-Western/Thomson Learning All rights reserved
How Do Low-Cost and Differentiation Firms Make Money?
• Differentiation• Customers often pay a higher price for extra value
• Low-cost• Additional profits come from cost savings
• Differentiation• Customers often pay a higher price for extra value
• Low-cost• Additional profits come from cost savings
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Exhibit 4.1: Costs, Prices, and Profits for Differentiation and Low-Cost Strategies
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Focus Strategy
• Strategies can be further subdivided on the basis of competitive scope
• Competitive scope: how broadly a firm targets its products or services• Narrow competitive scope for certain buyers or
geographic areas• Broad competitive scope when a large range of
buyers are targeted
• Strategies can be further subdivided on the basis of competitive scope
• Competitive scope: how broadly a firm targets its products or services• Narrow competitive scope for certain buyers or
geographic areas• Broad competitive scope when a large range of
buyers are targeted
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Exhibit 4.2: Porter’s Generic Strategies
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Competitive Advantage and the Value Chain
• A firm can gain competitive advantage by finding differentiation or low costs in its activities
• Value chain is a convenient way of looking at the firm’s activities
• Value chain: all the activities that a firm used to design, produce, market, deliver, and support its product
• A firm can gain competitive advantage by finding differentiation or low costs in its activities
• Value chain is a convenient way of looking at the firm’s activities
• Value chain: all the activities that a firm used to design, produce, market, deliver, and support its product
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Exhibit 4.3: The Value Chain
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Components of the Value Chain
• Primary activities: physical actions of creating, selling, and after-sale service of products
• Upstream: early activities in the value chain• R&D• Dealing with suppliers
• Primary activities: physical actions of creating, selling, and after-sale service of products
• Upstream: early activities in the value chain• R&D• Dealing with suppliers
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Components of the Value Chain (cont.)
• Downstream: later value chain activities• Sales and dealing with distribution channels
• Support activities: systems for human resources management, organizational design and control, and technology
• Downstream: later value chain activities• Sales and dealing with distribution channels
• Support activities: systems for human resources management, organizational design and control, and technology
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Distinctive Competencies
• Strengths that allow companies to outperform rivals• Ex.: Quality, innovation, customer service
• Resources: inputs into the production or service processes• Ex.: Buildings, land, equipment, employees
• Strengths that allow companies to outperform rivals• Ex.: Quality, innovation, customer service
• Resources: inputs into the production or service processes• Ex.: Buildings, land, equipment, employees
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Distinctive Competencies
• Capabilities: ability to assemble and coordinate resources effectively
• Resources provide the organization with potential capabilities.
• For long-term success, capabilities must lead to sustainable competitive advantage.
• Capabilities: ability to assemble and coordinate resources effectively
• Resources provide the organization with potential capabilities.
• For long-term success, capabilities must lead to sustainable competitive advantage.
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Sustaining Competitive Advantage
• Sustainable: strategies not easily defeated by competitors
• Four characteristics of capabilities that lead to competitive advantage
• Valuable• Rare• Difficult to imitate• Non-substitutable
• Sustainable: strategies not easily defeated by competitors
• Four characteristics of capabilities that lead to competitive advantage
• Valuable• Rare• Difficult to imitate• Non-substitutable
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Exhibit 4.4: Relationships Among Resources, Capabilities, Distinctive Competencies, and Eventual Profitability
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Competitive Strategies in International Markets
• Competitive strategies: strategic moves multinationals use to defeat competitors• Offensive competitive strategies: direct attacks to
capture market share• Defensive competitive strategies: attempts to
discourage offensive strategies• Counter-parry: fending off a competitor’s attack in
one country by attacking in another country
• Competitive strategies: strategic moves multinationals use to defeat competitors• Offensive competitive strategies: direct attacks to
capture market share• Defensive competitive strategies: attempts to
discourage offensive strategies• Counter-parry: fending off a competitor’s attack in
one country by attacking in another country
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Offensive Strategies
• Direct attacks: price cutting, adding new features, or going after poorly served markets
• End-run offensives: seeking unoccupied markets• Preemptive competitive strategies: being first to obtain
particular advantageous position• Acquisitions: buying out a competitor
• Direct attacks: price cutting, adding new features, or going after poorly served markets
• End-run offensives: seeking unoccupied markets• Preemptive competitive strategies: being first to obtain
particular advantageous position• Acquisitions: buying out a competitor
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Defensive Strategies
• Attempts to reduce risks of being attacked• Convince an attacking firm to seek other targets• Blunt the impacts of any attack
• Exclusive contracts with best suppliers• New models to match competitor’s lower prices• Public announcements about the willingness to fight
• Attempts to reduce risks of being attacked• Convince an attacking firm to seek other targets• Blunt the impacts of any attack
• Exclusive contracts with best suppliers• New models to match competitor’s lower prices• Public announcements about the willingness to fight
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Counter-parry
• Popular strategy for multinationals• Respond to attack by attacking competitor in another
country• Ex.: Kodak—When Fuji attacked Kodak in the U.S.,
Kodak retaliated by attacking Fuji in Japan.• Goodyear also attacked Michelin in Europe as
response to attack in U.S.
• Popular strategy for multinationals• Respond to attack by attacking competitor in another
country• Ex.: Kodak—When Fuji attacked Kodak in the U.S.,
Kodak retaliated by attacking Fuji in Japan.• Goodyear also attacked Michelin in Europe as
response to attack in U.S.
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Multinational Diversification Strategy
• Business-level strategies: strategies for a single business operation
• Corporate-level strategies: how companies choose their mixture of different businesses
• Business-level strategies: strategies for a single business operation
• Corporate-level strategies: how companies choose their mixture of different businesses
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Diversification
• Related diversification: companies acquire businesses that are similar in some way to their original or core business• Ex.: Nike adding clothing line to its shoe operations
• Unrelated diversification: firms acquire businesses in any industry• Main concern is whether it’s a good financial
investment
• Related diversification: companies acquire businesses that are similar in some way to their original or core business• Ex.: Nike adding clothing line to its shoe operations
• Unrelated diversification: firms acquire businesses in any industry• Main concern is whether it’s a good financial
investment
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Exhibit 4.5: Selection of Global Fortune 500 Diversified Multinationals
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Exhibit 4.5: Selection of Global Fortune 500 Diversified Multinationals
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Exhibit 4.5: Selection of Global Fortune 500 Diversified Multinationals
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Strategy Formulation: Traditional Approaches
• Strategy formulation: process by which managers select the strategies to be used by their company
• Analyses
• Strategy formulation: process by which managers select the strategies to be used by their company
• Analyses
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Strategy Formulation: Traditional Approaches (cont.)
• Popular analysis techniques • Competitive dynamics of the industry • Company’s competitive position in the industry• Opportunities and threats faced by their company• Company’s strengths and weaknesses
• Popular analysis techniques • Competitive dynamics of the industry • Company’s competitive position in the industry• Opportunities and threats faced by their company• Company’s strengths and weaknesses
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Industry and Competitive Analysis
• Managers must understand their industry well to formulate good strategies.
• Must understand economic characteristics of industries and driving forces
• Economic characteristics include• Market size• Ease of entry• Opportunities for economies of scale
• Managers must understand their industry well to formulate good strategies.
• Must understand economic characteristics of industries and driving forces
• Economic characteristics include• Market size• Ease of entry• Opportunities for economies of scale
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Driving Forces
• The important changes that have potential to affect an industry• Speed of new product innovations• Technological changes• Changing societal attitudes and lifestyles
• The important changes that have potential to affect an industry• Speed of new product innovations• Technological changes• Changing societal attitudes and lifestyles
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Key Success Factors
• Important characteristics of a company or its product that lead to success in an industry• Innovative technology or products• Broad product line• Effective distribution channels• Price advantages• Effective promotion• Superior physical facilities or skilled labor
• Important characteristics of a company or its product that lead to success in an industry• Innovative technology or products• Broad product line• Effective distribution channels• Price advantages• Effective promotion• Superior physical facilities or skilled labor
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Key Success Factors
• Experience of firm in business• Cost position for raw materials• Cost position for production• R&D quality• Financial assets• Product quality• Quality of human resources
• Experience of firm in business• Cost position for raw materials• Cost position for production• R&D quality• Financial assets• Product quality• Quality of human resources
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Competitor Analysis
• Profiles of competitor’s strategies and objectives• Four steps
• Strategic intent• Current and anticipated generic strategies• Current and anticipated offensive and defensive
competitive strategies• Current positions
• Profiles of competitor’s strategies and objectives• Four steps
• Strategic intent• Current and anticipated generic strategies• Current and anticipated offensive and defensive
competitive strategies• Current positions
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Competitor Analysis (cont.)
1. Strategic intent1.Broad objectives of competitors
2. Current and anticipated generic strategies1.Helps determine key KSF
3. Current and anticipated offensive and defensive competitive strategies
4. Current positions
1. Strategic intent1.Broad objectives of competitors
2. Current and anticipated generic strategies1.Helps determine key KSF
3. Current and anticipated offensive and defensive competitive strategies
4. Current positions
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Exhibit 4.6: Hypothetical Competitive Profiles of Four Companies in Different Countries
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Exhibit 4.6: Hypothetical Competitive Profiles of Four Companies in Different Countries
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Company-Situation Analysis: SWOT
• Strengths: distinctive capability, resource or skill• Weaknesses: competitive disadvantage compared to
competitors• Opportunities: favorable conditions in the environment• Threats: unfavorable conditions in the environment
• Strengths: distinctive capability, resource or skill• Weaknesses: competitive disadvantage compared to
competitors• Opportunities: favorable conditions in the environment• Threats: unfavorable conditions in the environment
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SWOT Analysis
• More complex than for domestic firms• Multinationals face more complex general and
operating environments• Environments vary by country
• More complex than for domestic firms• Multinationals face more complex general and
operating environments• Environments vary by country
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Corporate Strategy Selection
• Diversified corporation has a portfolio of businesses• Major issue is which businesses to invest in and which
businesses to divest• The basic tool: matrix analyses• The most popular is the growth-share matrix of the
Boston Consulting Group (BCG).
• Diversified corporation has a portfolio of businesses• Major issue is which businesses to invest in and which
businesses to divest• The basic tool: matrix analyses• The most popular is the growth-share matrix of the
Boston Consulting Group (BCG).
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BCG Share Matrix
• Division into four categories based on market share and relative market share• Stars: the most successful firm• Dogs: businesses with low market shares in low-
growth industries• Cash cows: businesses in slow-growth industries
where company has strong market-share position• Problem children: businesses in high-growth
industries where company has a poor market share
• Division into four categories based on market share and relative market share• Stars: the most successful firm• Dogs: businesses with low market shares in low-
growth industries• Cash cows: businesses in slow-growth industries
where company has strong market-share position• Problem children: businesses in high-growth
industries where company has a poor market share
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Exhibit 4.7: The BCG Growth Share Matrix
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Matrices
• All matrices help answer basic strategy formulation question such as• Are businesses in attractive industries?• Are most businesses growing?• Are there sufficient cash cows to finance other
businesses?• Is business portfolio well positioned for the future?• Is the some strategic synergies among businesses?
• All matrices help answer basic strategy formulation question such as• Are businesses in attractive industries?• Are most businesses growing?• Are there sufficient cash cows to finance other
businesses?• Is business portfolio well positioned for the future?• Is the some strategic synergies among businesses?