1. To what extent should firms have one global strategy vs
To what extent should firms have one global strategy vs. various and multiple domestic strategies?

2. Multinational Strategies: Globalization versus National differentiation
The case for a global strategy:
National preferences in decline-- possible to view the
world becoming a single, if segmented, market.
Access to global scale economies--cost savings in purchasing, manufacturing, product development and marketing.
Strategic strength from global positioning-- but
locating in multiple national markets, by locating in multiple national markets, the global competitor can cross-subsidize to attack nationally focused rivals.
Need to access market trends and technological
developments in each of the world’s major economic
centers- N. America, Europe, EastAsia. }
Ted
Levitt
“Global-
-ization
Thesis”
Hamel &
Prahalad
Thesis
Kenichi Ohmae’s
“Triad Power”
Thesis 20

3. Matching Global Strategies and Structures to Industry Conditions
Degree of globalization depends upon the benefits of global
integration versus the benefits of national differentiation.
Key issue: --How important are global scale economies?
--How different are customer requirements between countries?
Jet engines
Benefits of
global
integration
Consumer
electronics
Telecommunications
equipment
Packaged
grocery products
Cement
Benefits of national differentiation 24

4. Marketing Global Strategies and Situations to Industry Conditions: Firm Success in Different Industries
Consumer Electronics Branded, Packaged Telecommunications
Consumer Goods Equipment
- Global industry Substantial national - Requires both global
- Matsushita the most differentiation, few global integration and national
successful scale economies differentiation.
- Philips the survivor Kao has limited success - NEC only partially
- GE sold out outside Japan successful Unilever and P&G most - ITT sold out successful - Ericsson most successful
Matsushita
NEC
Kao
Erickson
global integration
Philips
global integration
P&G
global integration
Unilever
General Electric
ITT
local responsiveness local responsiveness local responsiveness 25

5. How should firms organize to achieve global excellence? (centralized vs. decentralized)

6. Strategy and Organization of the MNC: The Evolution of Multinational Strategies and Structures : (1) Pre 2nd WW: Era of the Europeans
The European MNC as Decentralized Federation :
National subsidiaries self-sufficient and autonomous
Parent control through appointment of subsidiaries senior management
Organization and management systems reflect conditions of transport and communications at the time e.g. Unilever, Phillips, Courtaulds, Royal Dutch/Shell. 21

7. Strategy and Organization of the MNC: The Evolution of Multinational Strategies and Structures: (2) Post 2nd WW: U.S. Dominance
American MNC’s as Coordinated Federations :
National subsidiaries fairly autonomous
Dominant role as U.S. parent-- especially in developing new technology and products
Parent-subsidiary relations involved flows of technology and finance, and appointment of top management.e.g. Ford, GM, Coca Cola, IBM 22

8. Strategy and Organization of the MNC: The Evolution of Multinational Strategies and Structures: (3) 1970’s and 1980’s: The Japanese Challenge
The Japanese MNC as Centralized Hub
Pursuit of global strategy from home base
Strategy, technology development, and manufacture concentrated at home
National subsidiaries primarily sales and distribution companies with limited autonomy. e.g. Toyota, NEC, Matsushita 23

9. Reconciling Global Integration with National Differentiation: The Transnational Corporation
Tight complex controls and coordination and a shared strategic decision process.
Heavy flows of technology, finances, people, and materials between interdependent units.
The Transnational: an integrated network of distributed interdependent resources and capabilities.
Each national unit and source of ideas, skills and capabilities that can be harnessed to benefit whole corporation.
National units become world sources for particular products, components, and activities.
Corporate center involved in orchestrating collaboration through creating the right organizational context. 26

10. Where should firms locate various activities? (e.g. manufacturing)

11. International Location of Industrial Activities within the Value Chain
Where is the optimal location
of X in terms of the cost and
availability of inputs?
The optimal location
of activity X considered
independently
What government incentives/ penalties
affect the location decision?
What internal
resources and capabilities does the firm
possess in particular locations?
WHERE TO LOCATE
ACTIVITY X?
What is the firm’s business strategy
(e.g. cost vs. differentiation advantage)?
The importance of links
between activity X and
other activities of the firm
How great are the benefits
of linkages through proximity? 15

12. Why do some countries excel at some industries. (e. g
Why do some countries excel at some industries? (e.g. Japan photography; Italy: fashion)

13. Porter’s National Diamond Framework
1. FACTOR CONDITIONS. “Home grown” resources and capabilities more important than natural endowments.
2. RELATED AND SUPPORTING INDUSTRIES. Competitive advantage occurs in “industry clusters” (e.g. semiconductors-computers-software in the U.S.).
3. DEMAND CONDITIONS. Discerning domestic customers drive quality and innovation (e.g. Japanese camera industry)
4. STRATEGY, STRUCTURE, RIVALRY. E.g. domestic rivalry drives innovation and upgrading.
FACTOR CONDITIONS
RELATING AND
SUPPORTING
INDUSTRIES
DEMAND
CONDITIONS
STRATEGY, STRUCTURE,
AND RIVALRY 10