2.  Strategy is derived from the Greek word ‘Strategos’  It means ‘Generalship – the actual direction of military force’  Strategy Mgt involves the analysis of internal capabilities and external environment of a firm in order to efficiently and effectively uses the resources to meet organizational objectives.

3. International Strategic Management - OverviewExternal / Internal AnalysisStrategic Choice and PositioningLeveraging Competitive AdvantageImplementing the Strategic PlanIntegration

4.  Strategic management includes strategic planning, implementation, and review/control of the strategy of an organization.  The companies want survive in the today’s business competition, they must sell their products in the global market and enlarge their market.  The companies face the compulsion to be global if they want to gain the global market and more values.  Ex: Sony, Pepsi, Microsoft…

5.  Orientation for Globalization  Emerging E-Commerce and Internet Culture  Cut-Throat Competition  Diversification  Active pressure groups  Motive for corporate social responsibility and ethics

6.  Standardization or differentiation of the marketing strategy are two extremes of a continuum, i.e., as Differentiation increases Standardization decreases, Conversely as Differentiation decreases Standardization increases.  Different aspects of Standardization vs differentiation  Regional Perspective (Ex. EU, NAFTA, SAARC)  Marketing Process Perspective  Marketing Components / Marketing Mix Perspective (Ex. Google, Nokia, Microsoft)

7. Basis of DifferenceStandardizationDifferentiation Application in marketing means Companies should apply 4Ps in the Same way in World wide. It is supported by strong market variety by Market individualism and uniqueness. Reason for ApplicationIntegration AccessRegional or local Conditions Product OfferedComplete standardizationAltering relevant feature according to individual or geographic CharacteristicsDoesn’t have special CharactersProduct is differential from competitors product. ApproachIncreasing Commonality of productDetailing the differentiation that exists between products and services Economics of scaleHigher productivity and lowers the total cost Increasing cost of production and lower productivity NeedSatisfy the heterogeneous needs of the buyer Satisfy a particular need of buyer End ResultBenefits buyer by lowering priceShow sense of value to the buyer

8.  Strategic options are creative alternative action – oriented responses to the external situation that an organization (or group of organizations) faces.  A Strategic option is a set of related options that form a potential strategy.

10.  External Constraints  Intra-Organizational forces and managerial power-relations  Values and preferences and managerial attitudes towards risk  Impact of past strategy  Time constraints  Information constraints  Competitors reaction

11.  Global portfolio investment (Mgt) means a grouping of investment assets that focuses on securities from foreign markets rather than domestic market.  Examples  Purchase of shares  Purchase of bonds issued by Foreign Govt.  Acquisition of assets in Foreign Country

12.  Tax rates on interest or dividends  Interest rates  Exchange rates

13. 1.Trade related forms of international business  Exports – direct and indirect  Indirect Exports  Domestic Purchase  Export Houses  Piggybacking  Trading companies

14. 2. Manufacturing Strategies without FDI  International licensing  International franchising  International Contract manufacturing  Turnkey Projects  Management contracts

15. 3. Manufacturing Strategies with FDI  Joint Ventures  International strategic Alliance  Merger & Acquisition  Wholly owned subsidiaries

16. There are 3 issues  First, the different elements of a firm’s organizational architecture must be internally consistent.  Second, the organizational architecture must match or fit the strategy of the firm strategy and architecture must be, consistent.  Third, the strategy and architecture must be consistent with competitive conditions prevailing in the firm’s market strategy, architecture and environment must be, consistent

17.  A Functional Structure  A typical Product divisional Structure  One company’s international divisional structure  A world wide area structure  A world Wide product Divisional Structure

18. Top Management Purchasing Buying Units Manufacturing Plants Marketing Branch Sales Unit Finance Accounting Units

19. Head Quarters Purchasing Buying units Manufacturing Plants Marketing Sales unit Finance Accounting Units Product Line - A Product Line - C Product Line - B

20. Head Quarters Domestic Division, product line - A Intl. Division G.M Area Line Country -1 G.M Product A,B and C Country – 2 G.M Product A,B and C

21. Head Quarters North American Area Latin American Area European Area Middle Eastern – African Area Far East Area

22. Head Quarters WorldWide Product Division A Worldwide Product Division B Area 1 (Domestic) Area 2 (International) Worldwide product Division C

24.  Personal Controls  Bureaucratic Controls  Output Controls  Cultural Controls

25.  Market approach  Rules approach  Corporate culture approach

26.  First, Incentive used often varies depending on the employees and their tasks  Second, the successful execution of strategy in the multinational firm often requires significant cooperation between managers in different sub units

27.  Third, the incentive system used within a multinational enterprise often have to be adjusted to account for national differences in institutions and culture  Finally, it is important for managers to recognize that incentive systems can have unintented consequences.

28. Establish standards of performanceMeasure actual performanceCompare actual with standardsConstruct and implement an action planReview and revise standards

29.  To evaluate the economic performance of its international performance, this is frequently referred to as an evaluation of the unit’s management performance.  To evaluate the unit’s management performance.  To monitor progress towards corporate objectives including strategic goals.  To assist efficient allocation of resources.