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CHAPTER 8: STRATEGY FORMULATION AND IMPLEMENTATION
Taylor Minter, Marco Pasquinelli, and Sarah Stanley
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Objectives
Define and elaborate on strategic management
Understand four basic options for international strategies for MNCs
Explain how to formulate strategy Discuss how to implement strategy
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Agenda
Define strategic management Explain the three basic steps to form a
strategy Examine the four approaches to strategy Explore the implementation process Discuss the case study
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Strategic Management (SM)
What is your definition? Process of determining an organization’s
basic mission and long-term objectives, then implementing a plan of action for attaining these goals.
Why is SM important in organizations? Dilbert
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Strategic Management
Why do we need SM? Keep track of increasingly diversified
operations in an international environment
Coordinate and integrate these operations with a unified and agreed-on focus
Examples
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The Strategic Management Process
Objectives
ExternalAnalysis
InternalAnalysis
StrategicChoice
StrategyImplementation
CompetitiveAdvantage
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Environmental Scanning
Organization
Regulatory
Social
Economic
Industry/ Market
Technological Political
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Internal Resource Analysis
Evaluates current managerial, technical, material, and financial resources and capabilities to better assess its internal strengths and weaknesses.
Key success factor (KSF) – is a factor that is necessary for a firm to compete effectively in a market niche
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Goal Setting For Strategy Formulation
Profitability Marketing Operations Finance Human Resources
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Formulating and Implementing Strategy
Economic - worldwide strategy based on cost leadership, differentiation, and segmentation
Political- utilizing strategies that are country-responsive and designed to protect local market niches
¥ € $
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Discussion
COCA COLA DELL
Released Sprite Tea in China
A combo of China’s 2 most popular beverages
Breathe new life in China beverage market
Way to gain more of Chinese market
Switched to a just in time processing system to cut down on costs and inventories
Computers are now build to order
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Formulating and Implementing Strategy
Administrative Coordination- the MNC makes strategic decisions based on the merits of the individual situation rather than using a predetermined economically or politically driven strategy
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Formulating and Implementing Strategy
Quality- utilizes strategies of total quality management to meet or exceed customers’ expectations and continuously improve products or services
Tate’s Chicken Show us your pizza Man hungry
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Global vs. Regional Strategies
Globalization vs. national responsiveness
Matrix Global strategy International strategy Transnational strategy Multi-domestic strategy
McDonalds
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Global vs. Regional
Some international management experts contend that globalization and national responsiveness are diametrically opposed forces, and that to accommodate one, a multinational must relax its efforts in the other. In what way is this an accurate statement? In what way is it incomplete or inaccurate?
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Strategy Implementation
It provides goods and services in accord with the plan of action
When is a time in your life or job that you have implemented a strategy?
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Implementation
The first stages of strategy implementation are choosing your location
Consider which country Then choose the specific location in the
country
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Implementation
To implement the strategy three areas must be used Marketing Production Finance
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Special Circumstances
When a MNC is dealing with an emerging market, which is in an unstable country and a riskier investment so strategies need to be adjusted
First-Mover Strategies “Base of the Pyramid” Strategy What are the benefits of the two Iand is one better than the other?
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Special Circumstances
International Entrepreneurship- a combination of innovative, proactive, and risk-seeking behavior that crosses national boundaries and is intended to create value for organizations
New Ventures/born global- firms that engage in significant international activities shortly after being established
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Case Study
What type of entry and ownership approach would you recommend? Defend your choice.
How could the partners use the four Ps of marketing to help implement strategy?
If production must be globally coordinated, will visions have a major problem? Why or why not?