CORPORATE LEVEL STRATEGIES Internationalization, Cooperation,Digitalisation Submitted to: Mr. Utkarsh Mangal Anjali
Corporate Level strategies Corporate level strategies are basically about decisions .. Allocating resources Transferring resources Managing and nurturing a portfolio of businesses.
Internationalisation Meaning of ICD . Internationalisation strategies Cooperation strategies Digitalisation strategies
Internationalisation strategies
Context for IS International strategies are a type of expansion strategies, major factors, technologies, developments beyond the domestic or national market.
Pressures for local responsiveness Decision to adopt IS -Demand on a firm to minimize its unit cost - Attain benefit from economies of scale - national level differ. Cost pressure Pressures for local responsiveness
Types of IS international Global Transnational Multi domestic
International Strategy : Create value by transferring product or service in foreign where not available. Multidomestic Strategy: When org. try to achieve a high level of local responsiveness by matching P & S to the national condition. Global Strategy : When rely on low cost approach and want to attain benefit of local economies and offering standardised P&S Transnational Strategy : when adopt a combined approach of low cost or high level responsiveness , for their P&S.
Classification of entry modes Export entry modes Contractual entry modes Investment modes
Advantages . Realising economies of scale Realising economies of scope Expansion & extension of markets Access to resources overseas
High bureaucratic costs Higher distribution costs Disadvantages . Higher risks Cultural diversity High bureaucratic costs Higher distribution costs Trade barriers
Cooperative strategies
Meaning The term co operation expresses the idea of simultaneous competition and cooperation among rival firms for mutual benefit. CS could take into account the possibility of mutual cooperation with competition.
Type of CS . mergers Strategic alliances Joint ventures
Mergers Horizontal mergers Vertical mergers Concentric mergers Conglomerate mergers
Why the buyer wishes to merge Why the seller wishes to merge Reasons for mergers . Why the buyer wishes to merge Why the seller wishes to merge
Issues in mergers Strategic issues Financial issues Managerial issues Legal issues
Joint venture strategies Long term contractual agreement By two or more parties To beneficial economic activities Exercise joint control
Type of joint ventures . NTPC LTD & Indian Railway Bhartiya Rail Biijee Action Aid India and Tata institute of SS DLF and Nakheel,UAE for Township in india Kirloskar Brothers Ltd. And SPP pumps Ltd,UK for catering Apollo Tyres and Continental AG of GERMENY in Malaysia Between two Indian organisations in one industry Between two Indian organisations across different industries Between Indian org. and foreign org. Between Indian org. and foreign org. in foreign country Between Indian and foreign org. in third country
Strategic issues in joint ventures Increasing the market Share Environmental Threats Legal regulatory Hurdles
Advantages/Disadvantages . Minimum risk Reduce investment Synergetic advantage Participation Problems in participation Conflicts Lack of coordination Cultural
Strategic Alliances Strategic alliances as a cooperative arrangement between two or more companies. Yoshino and Rangan define strategic alliances in three characteristics Two or more firms unite to pursue a set of agreed upon goals Control over the performance of assigned tasks Partner contribute on a continuing
Reasons for S Alliances Entering new markets Reducing manufacturing costs Developing & diffusing technology
Digitalisation Strategies
Meaning Digitalisation is a vast subject, encompassing a number of areas such as business, social or technology. Computerisation Electronisation Digitisation
Digitalisation within and beyond organisations Computerisation of records Inetrconnectivity Management Information system Leading better decision making
Principles Acc. To Larry downes and Chunka mui Stage 1 Outsourcing to the customer Cannibalising their markets Treat same each customer Creating groups Stage 2 Replacing rude interfaces Continuity for customer Giving away information Structuring transactions Stage 3 Treating assets as liabilities Destroying one value chain Managing innovation Hiring children
Digitalisation value chain Deconstruction: product can be delivered through traditional means, but input in the physical product can be delivered digitaly. Ex: Computers Disintermediation: When some process in the value chain are eliminated. Ex: Online booking Re-intermediation: When processes in the value chain are supplemented by one or more intermediaries. Ex: Booksellers Industry morphing: Situation where traditional Industries are transforming into new type of industry. Ex: Banking
Cannibalisation: A set of activities are being replaced by new set of activities. Ex: internet booking Techno-intensification: A situation where new technology is used and reduce the use of human resourse. Re-channelling: Manufacturer focus on manufacture or marketing activities are done by outsourcing.
Digitalised business or E-business In 1997 IBM created E-business system It is about using the internet infrastructure and related technologies to enable business anywhere and anytime Net enabled organisation or web enabled organisation
Works.. Using the website to disseminate product information only Using the website as a minor distribution channel for selling directly to customers Using the website as one of the major distribution channels to access customers Using the website as the primary distribution channel to access buyers Using the website as the exclusive channel to transact sales with customes
Digitalisation strategies . E- market pattern E- portal pattern E- Channel pattern
Comparison of digital strategy . Digital strategy Traditional strategy
Summary This chapter takes forward the theme of expansion strategies and discusses three types of expansion strategies : internationalisation, cooperation and digitalisation.