This tutorial covers the basics of international business strategy. We first discuss the case of Billabong's recent problems, problems shared by many of its competitors such as Quiksilver and Rip Curl. We then think of Billabong's possible options moving forward in the context of international business theories. These include 1) long-term strategic goals, 2) value creation options, 3) basic business strategy (low-cost vs differentiation, 4) the value chain, 5) entry mode strategies, and 6) the four main international strategies. Finally, we conclude with a look at how some companies localize their offerings.

1. IBUS2301:
International Business Management
Tutorial #9, May 12 and 13
Chapter 12: International Business Strategy
Tutor: Preston Teeter, p.teeter@business.uq.edu.au

2. IBUS2301:
Int’l Business Mgmt
Outline
• Billabong’s international strategy
• Four basic strategies

3. IBUS2301:
Int’l Business Mgmt
BILLABONG’S
INTERNATIONAL STRATEGY

4. IBUS2301:
Int’l Business Mgmt
Billabong
• 80% sales international
• Brand’s collections are licensed and distributed in
over 100 countries, 10,000 outlets
• Majority of sales through wholly-owned operations
in Australia, Europe, S. Africa, Brazil, N. America,
New Zealand, and Japan
• Began as wholesaler, later started opening own
stores

5. Source: abc.net.au

6. Source: Google Finance

7. Source: smartcompany.com.au

8. IBUS2301:
Int’l Business Mgmt
Billabong
Billabong’s board has invited two consulting
groups to analyze their situation and present
their recommendations on how Billabong
should move forward with their international
business strategy.
• 8 minutes to prepare, 2 minutes to present

9. Source: Retailbiz.com.au

10. IBUS2301:
Int’l Business Mgmt
FOUR BASIC STRATEGIES

11. 5/13/2014
IBUS2301:
Int’l Business Mgmt
Strategy
1. What is strategy?
•Actions that managers take to attain the
goals of the firm
2. What are the determinants of enterprise
value?
3. What are the two basic strategies for creating
value and attaining competitive advantage?

12. Determinants of Enterprise Value

13. Strategic Choice in the
International Hotel Industry

14. The Value Chain

15. 5/13/2014
IBUS2301:
Int’l Business Mgmt
Global Standardization
• Global low-cost strategy
• Ex. industrial goods
International
• Minimal customization and
cost reductions
• Ex. Xerox in 1960s
Transnational
• Low-cost & customization
• Ex. Caterpillar (see text)
Localization (Multidomestic)
• Global customization
• Ex. Automobiles
(historically)
Four Strategies

16. Four Basic Strategies

17. 5/13/2014
IBUS2301:
Int’l Business Mgmt
Local
Responsiveness
Where do pressures for local responsiveness
arise from?
• Differences in…
• customer tastes and preferences
• infrastructure
• traditional practices
• distribution channels
• host-government demands

18. Source:Minyanville.com

19. Source:Minyanville.com
+

20. Source: hipbip.com
McDonald’s France

21. What is the top-selling car in each country?
Ford F-Series
Morris Mini
Ford Falcon
Volkswagen Golf

22. Questions?