1. Chapter 11 International Strategy and Organization

2. International Business 4e
Chapter Preview
Define core competency and value-chain analysis
Explain multinational and global strategies
Describe the four corporate-level strategies
Discuss the three business-level strategies
Identify what influences organizational structure
Describe each type of international organizational structure
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International Business 4e

3. Planning and Strategy Planning Strategy
Identifying and selecting objectives and deciding how to achieve those objectives
Set of planned actions that
managers take to help a company meet its objectives
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International Business 4e

4. Strategy-Formulation Process
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International Business 4e

5. Identify Mission and Goals
Mission statements must consider:
Company activities
Business objectives
Stakeholders
Stockholders
Customers
Residents
Environment
and much more…
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International Business 4e

6. Identify Core Competency
Special ability of a company that
competitors find extremely difficult
or impossible to equal
Coordination of multiple skills
Lengthy period to develop
Difficult to teach
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International Business 4e

7. International Business 4e
Value-Chain Analysis
Divide company activities into primary and support activities and identify those that create value for customers
Each activity is
a source of either
strength or weakness
Insights gained are
fed into the strategy
formulation process
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International Business 4e

8. Value Chain Components
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9. International Business 4e
Business Environment
National differences are inherent in analyzing a company’s unique abilities
Cultural differences
Political processes
Legal matters
Economic systems
Labor issues
Consumer forces
and much more…
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International Business 4e

10. International Business 4e
Small Firm Strategy
Be sure company is ready to go international
Thoroughly understand your product
Examine your company’s internal activities
Ask important questions of strategy
Finally, create the strategic plan
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International Business 4e

11. Multinational Strategy
Adapting products and
their marketing strategies
in each national market
to suit local preferences
Respond quickly to
buyer preferences
Difficult to exploit
economies of scale
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International Business 4e

12. products using the same International Business 4e
Global Strategy
Offering the same
products using the same
marketing strategy in
all national markets
Cost savings from
standardization
May overlook varying
buyer preferences
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International Business 4e

13. Levels of Company Strategy
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International Business 4e

14. Growth Strategy Increase the scale (size of activities)
or scope (kinds of activities) of operations
Internally generated growth
Mergers and acquisitions
Joint ventures
Strategic alliances
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International Business 4e

15. Retrenchment Strategy
Reduce the scale or scope
of a corporation’s businesses
Conditions
Actions
Poor economic conditions
Increased competition
Lay off workers
Close inefficient factories
Sell unprofitable businesses
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International Business 4e

16. Stability Strategy Guard against change and avoid
growth or retrenchment
No opportunities or threats
Strengths fully exploited
Weaknesses fully protected
Stated objectives are met
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International Business 4e

17. International Business 4e
Combination Strategy
Mix of growth, retrenchment, and stability strategies across a corporation’s business units
Invest in
promising units
Retrench for
less exposure
Stabilize
other units
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International Business 4e

18. Business-Level Strategies International Business 4e
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International Business 4e

19. Low-Cost Strategy Exploit economies of scale to have the lowest
cost structure of any competitor in an industry
Mantra is cutting costs
Quality remains important
Scale is barrier for new entrants
Perhaps low customer loyalty
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International Business 4e

20. Differentiation Strategy
Design products to be perceived as unique
by buyers throughout an industry
Differentiators
Brand image
Product design
Quality
Effects
Price premium
Customer loyalty
Portion of market only
Higher production costs
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International Business 4e

21. Focus Strategy Focus on narrowly defined market segment by
being the low-cost leader, differentiating, or both
Many sub-segments today
Need distinctive product
Specific geography, ethnicity, etc.
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International Business 4e

22. Organizational Structure
Centralized
decision making
Decentralized
decision making
Coordination is paramount
Financial control and cost savings
Local responsiveness is key
Fast-changing environment
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International Business 4e

23. International Division Structure
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24. International Area Structure
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International Business 4e

25. Global Product Structure
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International Business 4e

26. Global Matrix Structure
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International Business 4e

27. from similar levels but International Business 4e
Work Teams
Self-managed
team
Employees from one
department take on
responsibilities of
former supervisors
Cross-functional
team
Group of employees
from similar levels but
different functional
departments
Global
team
Top managers from
headquarters and
subsidiaries solve
company problems
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International Business 4e

28. International Business 4e
Chapter Review
Define core competency and value-chain analysis
Explain multinational and global strategies
Describe the four corporate-level strategies
Discuss the three business-level strategies
Identify what influences organizational structure
Describe each type of international organizational structure
© Prentice Hall, 2008
International Business 4e