1. International Strategic Management

2. Is It Important Enough to Be Worth the Complexities? Alain Gomez, CEO, Thomson, S.A. You do not choose to become global. The market chooses for you; it forces your hand. Alain Gomez, CEO, Thomson, S.A.

3. Some Reasons To enter more favorable markets, e.g., faster growing, more profitable, better government climate... To reach new customers To gain access to lower-cost labor markets and/or key/lower-cost raw materials To spread business risk across a wider base To gain other advantages inherent in location

4. Different International Strategies Multidomestic or multinational Global or international Transnational

5. Application of Strategic Management Process Use same 3-phase process External environment(s) differ and are especially important Many constraints May have to do diagnosis & develop strategies for different countries

6. Diagnosis External environment makes the difference between countries External scanning & analysis is especially important Can use same 5-force model (by country or region) and same four aspects of general environment Still need SWOT and Critical Issues (may be specific to country or region)

7. Formulation Still corporate-level, competitive, & other strategies Still need rich range of alternatives May need different strategies in each nation or region Vertical integration has more disadvantages Partners are usually needed Need to decentralize more, but this creates problems

8. Formulation: Corporate Level Multidomestic or multinational Global or international Transnational

9. Business Level Strategies Licensing Management contracts Exporting Joint ventures, production sharing, subcontract arrangements Turnkey construction contracts BOT (build, operate, transfer) contracts Acquisitions Green-field development

10. Implementation Usual considerations in planning actions: – –Resources – –Support – –Reward systems – –Timing – –Organization structure – –Culture – –Tracking & control systems

11. Needs for partners again (choice and relationships are critical) Organizing (decentralization vs. centralization) Staffing Manage key cultural differences: –Power distance –Uncertainty avoidance –Individualism-collectivism –Masculinity-femininity –Time orientation

12. Implementation (cont.) Increased need for information & good financial measures to maintain control Political risks Economic risks Importance & difficulty of maintaining good host country relationships