Restricted National Restricted National Market ScopeMarket Scope (b) (b)

- - national market development over time

- sustainability of national strategies - sustainability of national strategies

- measuring competitive advantage- measuring competitive advantage

- inter-market comparison- inter-market comparison

- benchmarking*- benchmarking*

Károly Barakonyi - 5 2

Sustainability of Sustainability of national strategiesnational strategies

• move beyond the present positionmove beyond the present position

• consider underlying dynamic of the consider underlying dynamic of the marketmarket

• existence of forces toward localization existence of forces toward localization or globalizationor globalization

• market convergence or divergence: market convergence or divergence: pendelum (Fig.5.5)pendelum (Fig.5.5)

Károly Barakonyi - 5 3

Industry drivers

GlobalisationGlobalisation LocalisationLocalisation

Industry drivers

Figure 5.5. The pendulum of change: convergence versus divergence

External dynamics make reliance on

national strategies

more difficult

External dynamics

assist

continuation of national strategies

Károly Barakonyi - 5 4

Industry driversIndustry drivers need to revisited: need to revisited:– customerscustomers– costcost– countrycountry– competitorscompetitors

Evaluate the extent of Evaluate the extent of each factorseach factors

Making an Making an overall assessmentoverall assessment; grouping:; grouping:– Product-market demandProduct-market demand: variety of customer demand across : variety of customer demand across

markets markets increasing or decreasing?increasing or decreasing?– Competitive interdependenceCompetitive interdependence: are there significant cost/benefit : are there significant cost/benefit

from supplying from supplying more than one market?more than one market?– Use Use of flexible manufacturing systems or strategic alliance brings of flexible manufacturing systems or strategic alliance brings

benefits becoming benefits becoming pan-nationalpan-national producer? producer?

Evaluate past and future industry trendsEvaluate past and future industry trends

Importance of internal forces!Importance of internal forces!

Károly Barakonyi - 5 5

GlobalisationGlobalisation LocalisationLocalisation

High Med Low Industry driversIndustry drivers Low Med High

Customer driversCustomer driversCustomer requirements

DistributionMarketing

Cost driversCost driversNew product development

Scale economiesTransport costsCountry driversCountry driversTrade policies

Technical standardsCultural/regulatory barriers

Competitive driversCompetitive driversCompetitive interdependence

Entry of new competitors

OverallOverall

Figure 5.6. The framework for indentifying and assessing external industry drivers

Károly Barakonyi - 5 6

GenerallyGenerally: once one competitor has moved

in international strategy direction, then others will follow!

If local / global forces finaly If local / global forces finaly balanced:balanced:

• range of companies using mix of strategies

• remain as long as underlying dynamics pushing in one direction

Károly Barakonyi - 5 17

Benchmarking:Benchmarking:

Continuous search for and application of significantly better practices that lead to superior business performance.

Key elements:•identificationidentification of world class performance - quantify performance gap•assessment of the processesprocesses which generated this performance - deeper understanding (how it is done)•seeking to applyapply such processes to our organization

Related to BSC: identify direct driversRelated to BSC: identify direct drivers

Means of continuous learning about process improvements

Károly Barakonyi - 5 18

2Develop measurement formats for key management processes

3 Select benchmark

candidates4A

Measure performance of best in class firm

4B

Measure own company performance

5 Specify action plans to

’meet and surpass'

Implement and monitor results

Continue process by returning to Box 1

Figure 5.7: The benchmarking process

6

7

Data Data analysisanalysis

1Determining which processes, practices, methods to measure