International Business Environments and Operations, 13/e Part Five Global Strategy, Structure, and Implementation 11-1 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Chapter 11 The Strategy of International Business 11-2 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives • To identify how managers develop strategy • To examine industry structure, firm strategy, and value creation • To profile the features and functions of the value chain framework • To assess how managers configure and coordinate a value chain • To explain global integration and local responsiveness • To profile the types of strategies firms use in international business 11-3 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall The Role of Strategy in International Business 11-4 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Industry, Strategy ,and Firm Performance • Industry organization paradigm leading strategy perspectives • The exceptions of imperfect competition • The idea of industry structure: The Five Forces Model 11-5 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Five Forces Model 11-6 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Industry Change Industry structure changes because of events like • Competitors’ moves • Government policies • Changes in economics • Shifting buyer preferences • Technological developments • Rate of market growth 11-7 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Strategy and Value • Strategy helps managers assess the company’s present situation, identify the direction the company should go, and determine how the company will get there • Creating Value – Cost Leadership – Differentiation 11-8 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall The Firm as Value Chain • What is the value chain? • Using the value chain – – – – – – – Configuration Macro Cost Factors Cluster Effects Logistics Digitization Economies of Scale Business Environment 11-9 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Coordination • • • • • Coordination Concerns National Cultures Learning Curve Operational Obstacles Subsidiary Networks 11-10 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Change and the Value Chain • The configuration and coordination of value chains respond to changes in customers, competitors, industries, and environments • Caveat: The Risk of Strategy 11-11 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Global Integration versus Local Responsiveness • Pressures for Global Integration – Globalization of Markets – Efficiency Gains of Standardization • Pressures for Local Responsiveness – Consumer Divergence – Host Government Policies 11-12 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall When Pressures Interact The Integration-Responsiveness grid helps managers measure the global and local pressures that influence the configuration and coordination of their value chains 11-13 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Integration Responsiveness Grid 11-14 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Types of Strategy 11-15 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall Future: What’s New in the World of Strategy Types • • • • • Evolution of the Multinational Corporation Visions of the Future The “Metanational” Company “Micro-Nationals” The “Cybercorp” 11-16 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher Printed in the United States of America 11-17 Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall ... firms use in international business 11- 3 Copyright © 2 011 Pearson Education, Inc publishing as Prentice Hall The Role of Strategy in International Business 11- 4 Copyright © 2 011 Pearson Education,.. .Chapter 11 The Strategy of International Business 11- 2 Copyright © 2 011 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives • To identify how... chains respond to changes in customers, competitors, industries, and environments • Caveat: The Risk of Strategy 11- 11 Copyright © 2 011 Pearson Education, Inc publishing as Prentice Hall Global Integration