Globalization Ha Noi, Foreign Trade University Chapter 1 International Business < International Business > Investment Trade Manufacture > < Profit Go Global In tegratio n What is Globalization ? Globa.
Chapter International Business Globalization Ha Noi, Foreign Trade University < International Business > Investment Trade Manufacture >< Profit Go … Global What is Globalization ? Integration Globalization refers to the shift toward a more integrated and interdependent world economy (Charles W Hill) Globalization 1.0 (from 1492 to 1800) The Stages of Globalization Globalization 2.0 (from 1800 to 2000) (From Thomas Friedman in The World is Flat) Globalization 3.0 (from 2000 to the present) IN FOCUS - Business concept Economies BROADER VIEW - Emerging trend - Transparency - Economies, Politics, Cultures… Globalization of Markets …refers to the merging of historically distinct and separate national markets into one huge global marketplace - Falling trade barriers easier to sell internationally -The tastes and preferences of consumers are converging on some global norms - Same basic products worldwide - “German market” or the “American market”, only the global market Strengths • Things you/your business is good at • Provide a clear advantage over rivals (competitors) • Distinctive/core competencies and resources that will help you/ your business achieve proposed objectives • Help to build up competitive advantage and serve as a cornerstone of strategy • Should be protected and built upon • Some possible strengths: Market share, Technology, Economies of scale, Leadership, Brand reputation and loyalty, High quality, Financial resources, R&D To identify the strengths, ask… • What advantages does your company have? • What you better than anyone else? • What unique or lowest-cost resources you have access to? • What people in your market see as your strengths? • What factors mean that you "get the sale"? Weaknesses • Things you/your business lacks or does poorly • A source of compe;;ve disadvantage à Places the business at a disadvantage • May hinder or constrain the business in achieving proposed objec;ves • Should seek ways to reduce or eliminate weaknesses before exploi;ng further compe;;on • Some possible weaknesses: Low market share, undifferen3ated, outdated technology, poor quality, lack of innova3on, a weak brand name, High costs… To identify the weakneses, ask… • What could you improve? • What should you avoid? • What are people in your market likely to see as weaknesses? • What factors lose you sales? Opportunities • Things that create the chance to make greater profits or get better business results • Arises when an organization may take benefits from the external environment • Should be recognize the opportunities to improve the business situation • Opportunities always coming along with the risks • Possible opportunities: Technology, higher economic innovation growth, new demand, new market, trade liberalization, market growth/diversification, social or lifestyle change, government spending programs To identify the opportunities, ask… • Where are the good opportunities facing you? • What are the interesting trends you are aware of? Threats • Things may harms or trouble you/your business • Any external factors that may hinder or prevent you/ your business from achieving proposed objectives or place the business at risks • Threats are not controllable • Some possible threats: New market entrants , economic downturn, change in consuming behaviors, the rise of low cost tastes or needs production abroad, higher or unstable input sources/prices, new regulations, competitive pressure To identify the threats, ask… • What obstacles you face? • What are your competitors doing? • Are quality standards or specifications for your job, products or services changing? • Is changing technology threatening your position? • Do you have bad debt or cash-flow problems? • Could any of your weaknesses seriously threaten your business? Why you need SWOT analysis • Help decision maker and strategic planner understand clearly about corporate’s internal/external situation • Analyze the issues/problems which may lead to success/failure • Prevent costly mistakes When you need SWOT analysis • Changing business direction/perspective • New product launching/new market entering • Decision making • Competition evaluation • New business strategic planning How to conduct SWOT Analysis? Carry your findings forward - Make sure that the SWOT analysis is used in subsequent planning Revisit your findings at suitable time intervals Evaluate listed ideas against Objectives - With the lists compiled, sort and group facts and ideas in relation to the objectives List Strengths, Weaknesses, Opportunities, & threats Create a workshop environment - Encourage an atmosphere conducive to the free flow of information Select contributors - Expert opinion may be required for SWOT Allocate research & information gathering tasks - Background preparation can be carried out in two stages – Exploratory and Detailed Information on Strengths & Weaknesses should focus on the internal factors & information on Opportunities & Threats should focus on the external factors Establish the objectives - Purpose of conducting a SWOT may be wide / narrow, general / specific SWOT Analysis layouts Regular layout Strengths Strategic layout • … • … Weaknesses • … • … Opportuni3es • … • … Threats • … • … Strengths Weakensses Opportuni;es How to u;lize the strengths to exploit the opportuni;es as much as possible How to overcome the weaknesses to take advantages the opportuni;es Threats How the avoid the threats by using your strengths Prevent the threats because of your weaknesses Formulate strategies from SWOT This can be done by pairing the SWOT factors • SO strategy: Strengths and Opportunities – Use Strengths to take advantages of opportunities • WO strategy: Weaknesses and opportunities – Over come weaknesses by taking advantages of opportunities • WT strategy: Weaknesses and Threats: Minimize the Weaknesses and avoid Threats • ST strategy : Strengths and Threats – Use strengths to avoid Mistakes of SWOT • An unclear goal • Developing long lists • Labeling items "strengths” even if you aren’t any beLer than the compe;;on • Conduc;ng biased assessments • Confusing strategies and opportuni;es A strategy is an ac;on An opportunity is an event or condi;on that exists independent of your ac;ons • Ignoring the internal and external environment factors iden;fied when evalua;ng strategies Tips • Be realistic about the strengths and weaknesses of you/your organization and group • It is pointless to say • Distinguish between where your organization is today and where it could be in the future • Be specific and fair in evaluation • Keep your SWOT analysis short and simple Avoid the complexity ... forces - Internal rebellion -Business impacts - Armed conflicts - Macro - Micro - Administrations procedures between nations - Local business groups International Business Competing in global... religious teachings (*) International Law - Bilateral and Multilateral treaties) Question: Search and give more detail about the Islamic law (especially applying to the international business) -Property... 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