International Business Environments and...

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

11-1

International Business

Environments and Operations

Part Five

Global Strategy, Structure, and Implementation


11-2

Chapter 11

The Strategy of

International Business


11-3

The Idea of Industry Structure:

Five Forces Model


11-4

Strategy and Value

• Creating Value

– Cost Leadership

– Differentiation


11-5

The Firm as Value Chain

• Using the value chain

– Configuration

– Macro Cost Factors

– Cluster Effects

– Logistics

– Digitization

– Economies of Scale

– Business Environment


11-6

Global Integration versus Local Responsiveness

Standardization vs. Adaptation

• Pressures for Global Integration

– Globalization of Markets

– Efficiency Gains of Standardization

• Pressures for Local Responsiveness

– Consumer Divergence

– Host Government Policies


11-7


11-8


12-9

Chapter 12

Country

Evaluation

and

Selection


12-10

Introduction

Because all companies have limited resources,

they must be careful in making the following decisions:

1. In which countries to locate sales, production, and administrative and auxiliary services

2. The sequence for entering different countries

3. The amount of resources and efforts to allocate to each country where they operate


12-11

Location Decisions Affecting International Operations


12-12

Scanning versus Detailed Analysis

Without scanning, a company may:

• Overlook opportunities and risks

• Examine too many or too few possibilities


12-13

What Information is Important: Examining Economic and Demographic Variables

• Prices

• Income elasticity

• Substitution

• Income Inequality

• Cultural Factors

• Trading Blocs


12-14

What Information is Important:Cost Considerations of Resource

Acquisition• Labor

• Infrastructure

• Ease of Transportation and Communications

• Government Incentives and Disincentives


12-15

Analyzing Risk• Political Risk:

– Analyzing Past Patterns

– Analyzing Opinions

– Examining Social and Economic Conditions

• Monetary Risk

– Exchange Rate Changes

– Mobility of Funds (Liquidity)

• Competitive Risk

– Making Operations Compatible

– Following Competitors of Customers

– Heading Off Competition


12-16

Country Comparison Tools

• Grids

– May depict acceptable or unacceptable conditions

– Rank countries by important variables

• Matrices allow companies to:

– Decide on indicators and weight them

– Evaluate each country on the weighted indicators

International Business Environments and...

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