International business strategy

INTERNATIONAL BUSINESS STRATEGY CHAPTER Introduction to Global Strategic Management Learning outcome: - Understand the characteristics of the strategic management process Hiểu đặc điểm trình quản trị chiến lược - List and describe the key phases of global strategy Liệt kê miêu tả giai đoạn chiến lược tồn cầu - Understand the differences between international strategy and global strategy Phân biệt chiến lược quốc tế chiến lược toàn cầu - Examine the national, sector and firm level drivers for global strategy Động lực nằm sau khiến cho doanh nghiệp lựa chọn chiến lược? Chiến lược (Strategy) - CEO thường người đưa chiến lược định chiến lược cơng ty → Người đứng đầu có quyền hạn định chiến lược (có thể có người khác phận phụ trách đưa chiến lược phải thông qua CEO) - Hai doanh nghiệp cạnh tranh với (competing firms) → có yếu tố cạnh tranh - Kế hoạch chuẩn bị sẵn từ trước để đối phó với mơi trường bên ngồi (khơng kiểm sốt được, dự đốn) - Chiến lược không loại bỏ rủi ro, thách thức (don’t escape from the threat) đối phó, làm giảm tác động tiêu cực thách thức → Mục tiêu: Chiến thắng đối thủ cạnh tranh (WIN OVER COMPETITORS) What is Strategy (Michael Porter) Chiến lược KHÔNG phải là: - Quốc tế hóa - Củng cố vị cho ngành - Thuê làm R&D → Đây bước triển khai chiến lược Chiến lược: ● Unique position: Tạo vị độc ● Long-term period: Vị độc phải trì thời gian dài ● Competitive Advantages: Tạo lợi cạnh tranh bền vững What should a strategy create for the firm? ● Competitive Advantage (đây mục tiêu hàng đầu chiến lược) ● Profits and Growth ● Market share and Value ● Happy shareholders and customers Which of the following best illustrates a sustainable competitive advantage? (sustainable = for a long-term) ● Outperforming competitors over a prolonged period of time ● Superior performance in the same industry ● Performance of two or more firms at the same level ● Obtain a superior position = competitive advantage Strategy is about setting a long-term direction for the organization and guiding managers in the decision-making → The purpose of strategy is to achieve success for the organization Strategic Management: Definition Strategic management is “the process of strategic decision-making that sets the long-term direction for the organization” The central thrust of strategic management is achieving a sustainable competitive advantage Strategy-making process involves ‘key decisions’ made for and on behalf of the entire organisation (Các định chiến lược phải thống cho doanh nghiệp) ➢ Strategic Management is the COMPETITIVE ADVANTAGE ● being unique, being difference ● unique value position compared to other organization How to be UNIQUE? Serving UNIQUE SET of customer Offer UNIQUE VALUES to a specific group of custom Performing UNIQUE ACTIVITIES (set of activities) that competitors can’t imitate/copy Determinants of Relative Performance: ● Differentiation (Higher Price) - Khác biệt hóa: làm cho giá trị doanh nghiệp trở nên khác biệt khiến cho khách hàng lựa chọn sản phẩm họ mà không quan tâm đến giá eg iphone ● Lower Cost - Dẫn đầu chi phí/Chi phí thấp: doanh nghiệp phục vụ nhóm khách hàng giống đối thủ cạnh tranh họ phải ln hạ giá thành sản phẩm xuống thấp để thu hút khách hàng để bán số lượng lớn → Competitive Advantage ➢ Strategic Management is the STRATEGIC DECISION-MAKING: ● Making strategic choice ● Tradeoff: Đánh đổi - quan tâm đến khách hàng mục tiêu ➢ Strategic Management is … ● Long-term direction ● Sustainable Strategic management can be defined as ● a process of setting written long-term profit plans ● a process of measuring performance of the organization ● a process of operational planning ● a process of setting long-term direction for the organization Which statement is NOT true? ● Strategy sets a direction ● Strategy making is the decision made on behalf of manager (on behalf of entire organization) ● Strategy deals with the long-term ● Strategy aims to meet stakeholders expectations ➢ Strategic Management is the PROCESS Strategic management has steps Strategic analysis Strategy development Strategy implementation Environmental scanning Phân tích mơi trường Strategy formulation Xây dựng chiến lược → Lựa chọn chiến lược phù hợp đề định hướng dài hạn Thực thi chiến lược Đưa chiến lược vào thực tiễn thống với định chiến lược (Strategic decision-making) External: Cơ hội, thách thức Internal: Điểm mạnh, điểm yếu What does a strategic management process NOT include? ● implementation (đã bao gồm evaluation) ● development ● evaluation ● analysis To develop a strategic plan we need information about what things? ● Resources and Capabilities ● Firm and Environment (Step 1) ● Competitors and Customers ● Global Markets and Suppliers Phase of Global Strategy The most likely phases firms go through before they adopt a global strategy: ● Phases 1: Single-country strategy: phù hợp với doanh nghiệp hoạt động quốc gia nhất, khơng có ý định mở rộng hoạt động sang nước ngoài, tập trung phát triển thị trường địa phương cạnh tranh phạm vi nội địa ● Phases 2: Export Strategy: sau hoạt động nước nhận thấy tiềm sản phẩm đáp ứng nhu cầu khách hàng nước → xuất sản phẩm sang nước để phục vụ khách hàng quốc gia ● Phases 3: International Strategy: nhận thấy sản phẩm khách hàng nước ngồi ủng hộ nhiệt tình, định sử dụng chiến lược quốc tế, điều chỉnh hàng hóa để phù hợp với nhu cầu người tiêu dùng, mở rộng phạm vi hoạt động định hợp tác với doanh nghiệp địa phương để quản lý, chăm sóc khách hàng phân phối tốt ● Phases 4: Global Strategy: sản phẩm có tiêu chuẩn hóa cao, tiêu thụ nhiều nơi giới quốc gia có nhu cầu sản phẩm mình, khơng phải thay đổi nhiều mặt sản phẩm chiến lược cạnh tranh → mở doanh nghiệp, chi nhánh nước ➢ SINGLE-COUNTRY STRATEGY Benefits Risks - Some firms such as construction, primary and secondary education or health services (belong to non-global industry) have no need to operate globally - Firms that have limited international experience and have a weak position in the home market should focus on improving their position in the home market before expanding globally - Putting all eggs in one country basket - If managers focus on competitors in the home market, they will be surprised when foreign competitors enter the market and lose market share - Only have experience operating in one country and have limited ability to move to other countries in times of difficulties in the home market ➢ EXPORT STRATEGY ● Ưu điểm - Giúp doanh nghiệp có thêm hiểu biết khách hàng thị trường nước ngồi - Tiết kiệm chi phí có bên trung gian nhập hàng hóa ● Nhược điểm - Khơng quản lý trực tiếp sản phẩm cách thức bên trung gian đưa sản phẩm tiếp cận đến khách hàng → Khơng có quyền kiểm soát ➢ GLOBAL STRATEGY & INTERNATIONAL STRATEGY Definition: - A global strategy involves the carefully crafted single strategy for the entire network of subsidiaries and partners, encompassing many countries simultaneously and leveraging synergies across many countries (eg iphone) (một chiến lược sử dụng cho tất chi nhánh tồn cầu chi nhánh có kết nối chặt chẽ với nhau) - An international strategy involves a large variety of business strategies across countries, and a high level of adaptation to the local business environment (eg KFC) (mỗi chi nhánh có chiến lược riêng để phù hợp với khách hàng thị trường địa phương đó) Difference in International Strategy and Global Strategy Degree of involvement and coordination from the center Degree of product standardization and responsiveness to local business environment Strategy integration and competitive moves Global Strategy Chi nhánh độc lập với trụ sở, tự triển khai định Sản phẩm tiêu chuẩn hóa cao Các chi nhánh trụ sở hỗ trợ lẫn → Mối quan hệ khăng khít Tập trung vào lợi ích hệ thống value-chain: nhiều quốc gia tham gia vào chuỗi giá trị, quốc gia đóng vai trị khác International Strategy Chi nhánh phụ thuộc vào trụ sở, trụ sở quản lý chi nhánh Sản phẩm chưa tiêu chuẩn hóa, phải thay đổi để phù hợp với thị trường địa phương Các chi nhánh nhận nhiều hỗ trợ hướng dẫn từ trụ sở Tập trung vào lợi ích chi nhánh thị trường địa phương NOTE: ● global strategy is the process towards one, two or all three dimensions ● for a strategy to be a global, it doesn’t require absolute standardization across countries, complete coordination between countries, and fully integrated competitive moves Global Strategy SINGLE strategy Adaptation: LOW COORDINATION as a network for the benefit of the whole - phối hợp International Strategy A VARIETY of business/local strategy HIGH adaptation COOPERATION between headquarter and branch for the benefit of that branch - hợp tác The Competitive Profile Matrix (CPM) The Competitive Profile Matrix (CPM) identifies a firm’s major competitors and its particular strengths and weaknesses in relation to a sample firm’s strategic position The weights and total weighted scores in both a CPM and an EFE have the same meaning However, critical success factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses, where = major strength, = minor strength, = minor weakness, and = major weakness The critical success factors in a CPM are not grouped into opportunities and threats as they are in an EFE In a CPM, the ratings and total weighted scores for rival firms can be compared to the sample firm This comparative analysis provides important internal strategic information The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important matching tool that helps managers develop four types of strategies: SO (strengths-opportunities) Strategies, WO (weaknesses-opportunities) Strategies, ST (strengths-threats) Strategies, and WT (weaknesses-threats) Strategies ● ● ● ● Poor product quality, coupled with reliable suppliers, would suggest WT strategies WO strategies ST strategies SO strategies Vertical axe = FP + SP = a Horizontal axe = CP + IP = b → (b;a) If a firm’s SPACE Matrix directional vector has the coordinates (-2; +3), we can go for ● Conservative ● Aggressive ● Competitive ● Defensive SP FP IP CP CP IP FP SP SPACE Matrix Competitive Position Product quality -1 Market share Brand & image -3 Product life cycle Industry position Barriers to entry +6 Growth potential +4 Access to financing Consolidation -1 -2 +4 +5 Financial position ROA +5 Leverage +4 Liquidity +6 Cash flow +5 Environmental position (Stability position) Inflation -2 Technology -1 Demand elasticity -2 Taxation -4 Question: Develop a SPACE matrix for the above firm and suggest the strategy that the firm should pursue Vertical axe = FP + SP = - 2,25 = 2,75 Horizontal axe = CP + IP = -1,75 + 4,75 = → (3; 2,75) → aggressive Given the following information for an exporting firm in Vietnam New trade agreement that lifts the ban of imported food is signed with a neighboring country (O) New law, requiring decreasing the amount of sugar in the food by 20%, could be passed next year (T) The contract with the main customer expires in months (T) In neighboring country, the tax rate is decreasing by 3% next year (O) Processed food market growing by 15% next year in our largest market (O) Extreme cases of natural disasters occurring next year (T) Competitors opening new stores in the town (T) Question: Determine whether they are internal or external factors? (External) Thường cho nhóm internal external không mix hai loại với Assign the corresponding weight to each factor and create the corresponding matrix to determine whether the company’ strategy is effective or ineffective? Given the following information for an export firm in Vietnam Too low net profit margin (W) Strong product ecosystem (S) High debt level ($3 billion) (W) debt-nợ Brand reputation valued at $35 billion (S) Excellent employee management (S) Extensive distribution channels (S) Competition based on prices (W) Question: Determine whether they are internal or external factors? (Internal) Assign the corresponding weight to each factor and create the corresponding matrix to determine whether the company’s strategy is effective or ineffective? Market growth = industry growth (Tốc độ tăng trưởng ngành) Relative market share (RMS) = MSa/MScompetitor (chia cho doanh thu đối thủ cạnh tranh lớn ngành, khơng phải mình) → GIÚP CHO DOANH NGHIỆP PHÂN LOẠI ĐƠN VỊ KINH DOANH (SBU = strategic business unit = branch = subsidiary) A: 0.5/0.7 = 0.7 B: 1.9/1.4 = 1.4 C: 1.8/1.2 = 1.5 D: 3.2/1.8 = 1.8 E: 0.5/2.5 = 0.2 A company in the portfolio that has a high market share in a growing market ● Star ● However ● Cash Cow ● Question mark What would a division with a low relative market share position in a high growth industry? ● Question mark ● Cash cow ● Star ● Stuck-in-the-middle What is the BCG Matrix ideal for analyzing? ● Companies with more than one division ● All companies ● Companies with annual sales greater than $1 million ● Companies with annual sales of less than $1 million AS: attractiveness score What has four quadrants based on two dimensions: competitive position and market growth? ● Competitive Profile Matrix ● SPACE Matrix ● Grand Strategy Matrix ● QSPM Which strategy formulation technique shows the relative attractiveness of alternative strategies ● Grand ● SPACE ● QSPM ● IFE What is the highest number of strategies that can be examined at one time with the QSPM? (No limit) Reading Chapter 9: Organizational structure What is the definition of organizational structure? What is the function of learning organization of structure? How many types of organizational structures? What are the advantages and disadvantages of each structure? In what situation each structure is appropriate? Chapter 11: Innovation What is innovation? How many types of innovation? What are they? Example of each? When can innovation bring a competitive advantage for the firm? When can a firm outsource its innovation? ... competitive moves Global Strategy SINGLE strategy Adaptation: LOW COORDINATION as a network for the benefit of the whole - phối hợp International Strategy A VARIETY of business/ local strategy HIGH adaptation... Difference in International Strategy and Global Strategy Degree of involvement and coordination from the center Degree of product standardization and responsiveness to local business environment Strategy. .. khách hàng → Khơng có quyền kiểm sốt ➢ GLOBAL STRATEGY & INTERNATIONAL STRATEGY Definition: - A global strategy involves the carefully crafted single strategy for the entire network of subsidiaries