International Strategy

Which is the American car? Page 2 Pontiac G8 BWM X5

Which is the American car? Page 3 Pontiac G8 BWM X5 Manufactured in Australia Manufactured in South Carolina

Page 4 Toyota SequoiaJeep Patriot Which is the American car?

Page 5 Toyota SequoiaJeep Patriot 80% U.S. Content66% U.S. Content

The Last “American” Car Page 6

The Last “American” Car Page 7 92% U.S. Content …but assembled in Canada

cars.com Most American Car

TouaregPassatJettaBeetleGolf Engine Germany Hungary Germany Poland Mexico Hungary TransmissionJapan Argentina Japan Argentina Japan Argentina Final Assembly SlovakiaGermanyMexico Brazil Country of Origin for VW Models Sold in U.S.: Major Components and Final Assembly

VW Jetta…just a little “German” Transmissions Japan Assembly Mexico Engines Poland Customers Lexington

Globalization Drivers o Market Drivers o Cost Drivers o Government Drivers o Competitive Drivers Low Adapt High Standardize

Effective Standardization Coca-Cola’s “global polar bears” McDonald’s “Big Mac”

Effective Adaptation o P&G single-use shampoo packages in India

Effective Transnationalization oBarbie is 51 years old oSold in 130 countries oNational adaptations: Physical features Costumes Activity sets oStandardized physique: Scaled to 6’2”, 110 lbs.

Value Chain Location and standardization/adaptation Infrastructure Technology Development Procurement Human Resource Management Inbound Logistics Operations Outbound Logistics Marketing Service Profit Margin

Value Chain Infrastructure Technology Development Procurement Human Resource Management Inbound Logistics Operations Outbound Logistics MarketingService Profit Margin Headquarters

Value Chain Infrastructure Technology Development Procurement Human Resource Management Inbound Logistics Operations Outbound Logistics MarketingService Profit Margin Upstream Headquarters

Value Chain Infrastructure Technology Development Procurement Human Resource Management InboundLogistics Operations OutboundLogistics MarketingService Profit Margin UpstreamDownstream Headquarters

Value Chain Marketing Profit Margin UpstreamDownstream Headquarters Manufacturing

Value Chain Configuration location o Geographic location of value chain activities around the world

VW Jetta…just a little “German” Transmissions Japan Assembly Mexico Engines Poland Customers Lexington

Value Chain Coordination linkages o Cross-border linkages between dispersed value- creating units o Coordination o Coordination = Flows of: –Money –Product (finished and intermediate) –Technology –People –Information (market data, strategic direction, etc.) o Highly coordinated vs. only money flows

International Strategy: Managing Competing Pressures Pressures for Global Efficiency Pressures for Local Responsiveness High Low High Low

International Strategy: Managing Competing Pressures Pressures for Global Efficiency Pressures for Local Responsiveness High Low High Low Export Strategy

Export Strategy U.S. Germany Mexico Malaysia

Export Strategy U.S. Germany Sweden England

International Strategy: Managing Competing Pressures Pressures for Global Efficiency Pressures for Local Responsiveness High Low High Low Export Strategy ?? Multidomestic Strategy

Multidomestic Strategy U.S. Germany Mexico Malaysia

P&G Multidomestic Strategy UK Germany France Italy Neth.

International Strategy: Managing Competing Pressures Pressures for Global Efficiency Pressures for Local Responsiveness High Low High Low Export Strategy ?? Multidomestic Strategy Global Strategy

Global Strategy (Textbook Variety) U.S. Germany Mexico Malaysia

International Strategy: Managing Competing Pressures Pressures for Global Efficiency Pressures for Local Responsiveness High Low High Low Export Strategy ?? Multidomestic Strategy Global Strategy Transnational Strategy

Transnational Strategy (v.1) U.S. Germany Mexico Malaysia

P&G “Pan-Euro” Strategy UK Germany France Italy Neth. Spain Zone 1 Zone 2

Surprising Outcome F VIZIR was precursor to “Liquid Tide” in US –Great irony is: P&G’s struggle to develop “Euro-brand” first found success in a different large, integrated market…

Surprising Outcome F VIZIR was precursor to “Liquid Tide” in US –Great irony is: P&G’s struggle to develop “Euro-brand” first found success in a different large, integrated market… The U.S.

Transnational Strategy (v.2) U.S. Germany Mexico Malaysia

Transnational Strategy (v.2) U.S. Germany Mexico Malaysia

Transnational Strategy (v.3) U.S. Germany Mexico Malaysia Engines Final Assembly Trim, seats, glass Steel

VW International Strategy - Jetta Germany Japan Mexico Poland Transmission Final Assembly Engine Misc. U.S. Marketing

McDonald’s Identity

McDonald’s Transnational Menu USBrazilCanadaIndiaGermany Big Mac French Fries Coca-Cola McNuggets McAloo Tikki McRib McBier McLobster McCalebresa PitaMac McFarmer

McDonald’s Site Selection and Stores US -- Colorado

McDonald’s Site Selection and Stores Moscow, Russia

McDonald’s Site Selection and Stores Bangkok, Thailand

Hamburger University Illinois, USA

Hamburger University Illinois Sydney London Munich Hong- Kong

Hamburger University Curriculum o80 classroom hours oTopics – Fast food “the McDonald’s way” Restaurant operations, food preparation Crew selection, training and team building Marketing and promotion Asset management Corporate citizenship and ethics Leadership, effective supervisory skills Standardization of Processes

McDonald’s Transnational Strategy U.S. Singapore Greece Brazil