Chapter 7 competing in foreign markets

[object Object],[object Object],[object Object]

“ You have no choice but to operate in a world shaped by globalization and the information revolution. There are two options: Adapt or die. ” Andrew S. Grove

The Global and National Environments ,[object Object],[object Object],[object Object],[object Object],International expansion represents a way of earning greater returns by transferring the skills and product offerings derived from distinctive competencies to markets where indigenous competitors lack these skills .

Increasing Profitability and Profit Growth Through Global Expansion ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Must also consider transportation costs, trade barriers, as well as the political and economic risks.

Pressures for Cost Reductions and Local Responsiveness ,[object Object],[object Object],[object Object]

Pressures for Cost Reductions ,[object Object],[object Object],[object Object],[object Object],[object Object],Pressures for cost reductions are greatest in industries producing commodity-type products where price is the main competitive weapon:

Pressures for Local Responsiveness ,[object Object],[object Object],[object Object],[object Object],The greatest pressures for local responsiveness arise from: Dealing with these contradictory pressures is a difficult strategic challenge, primarily because being locally responsive tends to raise costs.

Why Do Companies Expand into Foreign Markets? Gain access to new customers Capitalize on core competencies Achieve lower costs and enhance competitiveness Spread business risk across wider market base Obtain access to valuable natural resources

International vs. Global Competition International Competitor Global Competitor Company operates in a select few foreign countries, with modest ambitions to expand further Company markets products in 50 to 100 countries and is expanding operations into additional country markets annually

Two Primary Patterns of International Competition Multi-country Competition Global Competition

A Company ’ s Strategic Options for Dealing with Cross-Country Variations in Buyer Preferences and Market Conditions

Choosing a Global Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Choosing a Global Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Basic Entry Decisions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Choice of Entry Mode ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],When and how to enter a new national market raise the question of how to determine the best mode or vehicle for entry. The optimal one depends on the company’s strategy:

Choosing Among Entry Modes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Global Strategic Alliances ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Global Strategic Alliances are cooperative agreements between companies from different countries that are actual or potential competitors. They range from short-term contractual cooperative arrangements to formal joint ventures with equity participation. Some alliances benefit the company. Beware, alliances can end up giving away technology and market access with very little gained in return.

Making Strategic Alliances Work The failure rate for international strategic alliances is quite high. Success seems to be a function of three main factors: Successful partners view the alliance as an opportunity to learn rather than purely as a cost- or risk-sharing device. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Structuring Alliances to Reduce Opportunism Opportunism includes the expropriation of technology or markets

The Four Big Strategic Issues in Competing Multinationally ,[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object]

Chapter 7 competing in foreign markets

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Chapter 7 competing in foreign markets

Similar to Chapter 7 competing in foreign markets (20)

Recently uploaded

Recently uploaded (20)

Chapter 7 competing in foreign markets