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INDEX INDEX 1. 2. 1. 3. 4. 2. 3. The Uruguay Round Agreements The Uruguay Round
INDEX INDEX 1. 2. 1. 3. 4. 2. 3. The Uruguay Round Agreements The Uruguay Round
INDEX INDEX 1. 2. 1. 3. 4. 2. 3. The Uruguay Round Agreements The Uruguay Round
INDEX INDEX 1. 2. 1. 3. 4. 2. 3. The Uruguay Round Agreements The Uruguay Round
INDEX INDEX 1. 2. 1. 3. 4. 2. 3. The Uruguay Round Agreements The Uruguay Round

INDEX

INDEX

1.

  • 2. 1.

3.

4.

2.

3.

The Uruguay Round Agreements

The Uruguay Round Agreements

A Comprehensive Model of Global Competitive Dynamics

A Comprehensive Model of Global Competitive Dynamics

Global business growth model in SE Asia: A market-driven model

Global business growth model in SE Asia: A market-driven model

4.

Potential Sources of Economies of Scope for Firms Pursuing Global Strategies

Potential Sources of Economies of Scope for Firms Pursuing Global Strategies

Tariff and Nontariff Trade Barriers

5.

Tariff and Nontariff Trade Barriers

6.

7.

5.

6.

8.

9.

7.

8.

9.

10.

10.

11.

11.

Industry Globalization Potential

Industry Globalization Potential

A Framework for Global Strategy

A Framework for Global Strategy

How Global Strategy Levers Achieve Globalization Benefits

How Global Strategy Levers Achieve Globalization Benefits

Global Competitive Moves

Global Competitive Moves

The Dimension of International Strategy

The Dimension of International Strategy

Types of International Strategy

Types of International Strategy

Assessing Corporate Globality

Assessing Corporate Globality

A Framework for Choice of Products

12.

A Framework for Choice of Products

A Framework for Choice of Markets

12.

13.

13.

14.

A Framework for Choice of Markets

Alternative Modes of Entry

Alternative Modes of Entry

Greenfield Versus Cross-Border Acquisition

Greenfield Versus Cross-Border Acquisition

What Is a Global Mindset?

14.

What Is a Global Mindset?

How a Global Mindset Differs from a Parochial or a Diffused Mindset

How a Global Mindset Differs from a Parochial or a Diffused Mindset

15.

15.

16.

To convert global presence into global competitive advantage, the …

To convert global presence into global competitive advantage, the …

Drivers of Global Value: The Star Framework

16.

17.

17.

18.

18.

19.

19.

Drivers of Global Value: The Star Framework

Scope Economies in Product and Market

Scope Economies in Product and Market

Worldwide Advantage: Goals and Means

Worldwide Advantage: Goals and Means

Strategic Orientation and Configuration of Assets

Strategic Orientation and Configuration of Assets

  • 20. Elements of Global Organization
    20.

Elements of Global Organization

21.

21.

22.

22.

23.

23.

24.

24.

28.

28.

29.

Desired Organization Features for Types of Geographic Strategies

Desired Organization Features for Types of Geographic Strategies

Different Corporate Approaches to Worldwide Strategy

Different Corporate Approaches to Worldwide Strategy

Match of Organizational and Strategic Logic

Match of Organizational and Strategic Logic

Structural Options for Firms Pursuing Global Strategies

Structural Options for Firms Pursuing Global Strategies

Local Responsiveness, Global Integration, and Organizational Structure

Local Responsiveness, Global Integration, and Organizational Structure

29.

Factors Influencing the Propensity of a Firm to Enter into Strategic Alliances

Factors Influencing the Propensity of a Firm to Enter into Strategic Alliances

30.

The ICV Decision Tree

INDEX INDEX 1. 2. 1. 3. 4. 2. 3. The Uruguay Round Agreements The Uruguay Round

The Uruguay Round Agreements

(concluded in Geneva, Dec 15, 1993 and signed as a declaration in Marakesh, Marocco, April 15, 1994)

  • 1. Agreements on Trade in Agricultural Products, Textiles, Garments and Other Manufactured Products.

  • 2. Agreements on Trade in Services

  • 3. Agreements on Trade-Related Investment Measures (TRIMs)

4. Agreements on Trade-Related Intellectual Property Rights (TRIPs) Changing Paradigms A Poli-centric Nation-state growth Domestic Passive
4.
Agreements on Trade-Related Intellectual Property Rights (TRIPs)
Changing Paradigms
A Poli-centric
Nation-state growth
Domestic
Passive
An Econ-centric
Market-driven growth
Global
Dynamic
The Uruguay Round Agreements (concluded in Geneva, Dec 15, 1993 and signed as a declaration in

A Comprehensive Model of Global Competitive Dynamics

Industry-based considerations Resource-based considerations • Concentration • Industry leader • Product homogeneity • Entry barriers •
Industry-based considerations
Resource-based considerations
• Concentration
• Industry leader
• Product homogeneity
• Entry barriers
• Market commonality with rivals
• Valuable abilities to attack,
deter, and retaliate
Rarity of certain assets
Imitability of competitive actions
• Organizational skills for actions
• Resource similarity with rivals
Competitive
dynamics
Attack / Counterattack /
Cooperation

Source: Peng, 2009:254

A Comprehensive Model of Global Competitive Dynamics Industry-based considerations Resource-based considerations • Concentration • Industry leader
     

Institution-based considerations

• Domestic competition: Primarily competition / antitrust policy

• International competition; Primarily trade / antidumping policy

Global business growth model in SE Asia:

A market-driven model

Foreign investment Markets Host economies  Home markets  Existing markets  Emerging markets Regional TNC
Foreign
investment
Markets
Host
economies
 Home markets
 Existing markets
 Emerging markets
Regional
TNC
integration
industrialisation
Exports

Source: Reynolds, 2002:13

Global business growth model in SE Asia: A market-driven model Foreign investment Markets Host economies 

Potential Sources of Economies of Scope for Firms Pursuing Global Strategies

  • 1. To gain access to new customers for current products or services

  • 2. To gain access to low-cost factors of production

  • 3. To develop new core competencies

  • 4. To leverage current core competencies in new ways

    • 5 To manage corporate risk

Source : Barney, 2007:478

Tariff and Nontariff Trade Barriers

Tariffs: taxes levied

on imported goods

or services

Quotas: quantity limits

on the number of products

or services that can be

imported

Nontariff barriers: rules,

regulations, and policies that

increase the cost of importing

products or services

Import duties

Supplemental duties

Voluntary quotas

Involuntary quotas

Government policies

Government procurement policies

Government-sponsored export

subsidies

Variable levies

Restricted import licenses

Domestic assistance programs

Border levies

Minimum import limits

Custom policies

Countervailing duties

Embargoes

Valuation systems

Tariff classifications

Documentation requirements

Fees

Quality standards

Packaging standards

Labeling standards

Industry Globalization Potential

Market Drivers

Common customer needs

Global customers

Global channels

Transferable marketing

 Lead countries COST DRIVERS
 Lead countries
COST
DRIVERS
MARKET DRIVERS
MARKET
DRIVERS

Government Drivers

Favorable trade policies

Compatible technical standards

Common marketing regulations

Government-owned competitors

and customers

INDUSTRY GLOBALIZATION POTENTIAL
INDUSTRY
GLOBALIZATION
POTENTIAL

Host government concerns

GOVERNMENT DRIVERS
GOVERNMENT
DRIVERS

Cost Drivers

Global scale economies

Steep experience curve effect

Sourcing efficiencies

Favorable logistics

Differences in country costs

(including exchange rates)

High product development cost

Fast changing technology

COMPETITIVE DRIVERS
COMPETITIVE
DRIVERS

Competitive Drivers

High exports and imports

Competitors from different

continents

Interdependence of countries

Competitors globalized

Source: Yip, 1992:12,31-32; cf. 2003:11-12
Source: Yip, 1992:12,31-32; cf. 2003:11-12

A Framework for Global Strategy

Position and Resources of Business and Parent Company

A Framework for Global Strategy Position and Resources of Business and Parent Company Industry Globalization Drivers
A Framework for Global Strategy Position and Resources of Business and Parent Company Industry Globalization Drivers
Industry Globalization Drivers
Industry
Globalization
Drivers
Benefits/ Costs of Global Strategy
Benefits/
Costs of
Global
Strategy

Appropriate Setting for Global

 

Strategy Levers

Strategy Levers
A Framework for Global Strategy Position and Resources of Business and Parent Company Industry Globalization Drivers
A Framework for Global Strategy Position and Resources of Business and Parent Company Industry Globalization Drivers

Organization’s Ability to Implement a Global Strategy

Source: Yip, 2003: 6
Source: Yip, 2003: 6
How Global Strategy Levers Achieve Globalization Benefits Benefits Major Drawbacks Global Strategy Levers Cost Reduction Improved
How Global Strategy Levers Achieve Globalization Benefits
Benefits
Major Drawbacks
Global
Strategy
Levers
Cost Reduction
Improved Quality
Enhanced Customer
Preference
Competitive Leverage
All Levers incur
Coordination Costs, Plus
Global Market
Increases volume for
economies of scale.
Participation
Via exposure to demanding
customers and innovative
competitors.
Via global availability,
global serviceability, and
global recognition.
Advantage of early entry.
Provides more sites for
attack and counterattack
hostage for good behavior,
Earlier or greater
commitment to a market
than warranted on own
merits.
Reduces duplication of
development efforts.
Focuses development and
management resources.
Allows consumers to use
familiar product while
abroad.
Basis for low-cost invasion
of markets.
Less responsive to local
needs.
Global
Products
Reduces purchasing,
production, and inventory
costs.
Allows organizations to use
same product across
country units.
Offsets disadvantage of low
market share.
Reduces duplication of
activities.
Helps exploit economies of
scale.
Exploits differences in
country factor costs.
Partial concentration allows
flexibility versus currency
changes and versus
bargaining parties.
Focuses effort.
Allows maintenance of cost
advantage independent of
local conditions
Distances activities from
customer.
Allows more consistent
quality control.
Increases currency risk.
Global
Location
of Activities
Provides flexibility on
where to base competitive
advantage.
Increases risk of creating
competitors.
More difficult
to manage value chain.
Global
Marketing
Reduces design and
production costs of
marketing programs.
Focuses talent and resources.
Leverages scarce, good
ideas.
Reinforces marketing
messages by exposing
customer to the same mix in
different countries.
Reduces adaptation to local
customer behavior and
marketing environment
Magnifies resource
available to any country.
Local competitiveness may
be sacrificed.
Global
Competitive
Moves
Provides more options and
leverage in attack and
defence
Source: Yip, 1992:20; 2003: 17

Global Competitive Moves

A global strategy approach to competitive moves means integrating competitive moves across countries rather than making moves one country at a time.

Type of Move

Cross-country

subsidization

Definition

Using profits from one country in which a business participates to subsidize competitive actions in another country.

Counterparry

Globally coordinated sequence of moves

Defending against a competitive attack in one country by coun- tering in another country. Simultaneous or planned sequence in which competitive moves are made in different countries in the same business.

Targeting of global competitors

Developing country- competitor plans

Preemptive use of global strategy

Identifying actual and potential global competitors and selecting an overall posture - attack, avoidance, cooperation, or acquisi- tion - for each. Analyzing strengths and weaknesses, opportunities and threats for each global competitor in each major country and developing a competitive plan of action for each country-competitor combination. Being the first competitor to make use of a particular element of global strategy - global market participation, global products, global activity location, and global marketing.

The Dimension of International Strategy

High

Coordination of Activities

Low

The Dimension of International Strategy High Coordination of Activities Low Value Activities Geographically Dispersed Geographically Concentrated

Value

Activities

Geographically

Dispersed

Geographically

Concentrated

Configuration of Activities

Source: Porter (1986) as edited by Wortzel & Wortzel, 1997:134.

The Dimension of International Strategy High Coordination of Activities Low Value Activities Geographically Dispersed Geographically Concentrated

Types of International Strategy

High

Coordination of Activities

Low

High Foreign Investment with Extensive Coordination among Subsidiaries Purest Global Strategy Country-Centered Strategy by Multinationals with
High Foreign
Investment with
Extensive Coordination
among Subsidiaries
Purest Global
Strategy
Country-Centered
Strategy by
Multinationals
with a Number of
Domestic Firms
Operating in
Only One Country
Export-Based
Strategy with
Decentralized
Marketing

Value

Activities

Source: Porter (1986) as edited by Wortzel & Wortzel, 1997:134.

Types of International Strategy High Coordination of Activities Low High Foreign Investment with Extensive Coordination among
Globalization of Capital Base Assessing Corporate Globality Globalization of Corporate Mindset Globalization Globalization of Supply of
Globalization
of Capital
Base
Assessing Corporate Globality
Globalization
of Corporate
Mindset
Globalization
Globalization
of Supply
of Market
Chain
Presence

Source: Govindarajan & Gupta, 2001:8

A Framework for Choice of Products

Low Moderately Most Required attractive attractive Degree of Local Adaptation Least Moderately High attractive attractive Low
Low
Moderately
Most
Required
attractive
attractive
Degree
of Local
Adaptation
Least
Moderately
High
attractive
attractive
Low
High

Expected Payoffs from Globalization

Source: Govindarajan & Gupta, 2001:24

Globalization of Capital Base Assessing Corporate Globality Globalization of Corporate Mindset Globalization Globalization of Supply of

A Framework for Choice of Markets

Phased-in Rapid High entry (create entry beachhead first) Strategic Importance of Market Ignore for Opportunistic Low
Phased-in
Rapid
High
entry (create
entry
beachhead
first)
Strategic
Importance
of Market
Ignore for
Opportunistic
Low
now
entry
Low
High

Firm’s Ability to Exploit the Market

Source: Govindarajan & Gupta, 2001:29

Alternative Modes of Entry

 

100%

Degree of

Ownership

Control Over

Activities

Performed in

the Foreign

Market

 

0%

Honda’s initial entry into the U.S. market Bridgestone’s acquisition of U.S. Based Firestone Ford-Mazda Genentech-Hoffman LaRoche
Honda’s initial
entry into the
U.S. market
Bridgestone’s
acquisition of
U.S. Based Firestone
Ford-Mazda
Genentech-Hoffman
LaRoche
Champion
International’s
paper exports
KFC’s
through
franchisees
independent
in India
brokers

100%

Exports

100%

Local

Productions

Exports Versus Local Production Source: Govindarajan & Gupta, 2001:31
Exports Versus Local Production
Source: Govindarajan & Gupta, 2001:31

Greenfield Versus Cross-Border Acquisition

Market

Growth

Rate

High

Growth

Mature or

Declining

Greenfield Greenfield operations operations or cross-border acquisitions Greenfield Cross-border operations acquisitions or cross-border acquisitions Low High
Greenfield
Greenfield
operations
operations
or cross-border
acquisitions
Greenfield
Cross-border
operations
acquisitions
or cross-border
acquisitions
Low
High

Uniqueness of Corporate Culture

Source: Govindarajan & Gupta, 2001:35
Source: Govindarajan & Gupta, 2001:35

What Is a Global Mindset?

Source: Govindarajan & Gupta, 2001:112

Open to Diversity Across Cultures and Markets? No Lack of Global Mindset Yes Knowledgeable About Diversity
Open to Diversity
Across Cultures and
Markets?
No
Lack of
Global Mindset
Yes
Knowledgeable About
Diversity Across
Cultures and Markets?
No
Lack of
Global Mindset
Yes
Able to Integrate
Diversity Across
Cultures and Markets
No
Lack of
Global Mindset
Yes

Global Mindset

How a Global Mindset Differs from a Parochial or a Diffused Mindset

Able to Integrate Diversity Across

Cultures and Markets Parochial Golbal Mindset Mindset Closed to (Low D - High I) (High D
Cultures and Markets
Parochial
Golbal
Mindset
Mindset
Closed to
(Low D - High I)
(High D - High I)
Open to
Diversity
Diversity
Across
Across
Cultures and
Cultures and
Markets
Markets
Parochial
Diffused
Mindset
Mindset
(Low D - Low I)
(High D - Low I)

Unable to Integrate Diversity Across

Cultures and Markets Source: Govindarajan & Gupta, 2001:113
Cultures and Markets
Source: Govindarajan & Gupta, 2001:113

To convert global presence into global competitive advantage, the company must pursue six value creation opportunities as follows:

  • 1. Adapting to local market differences

Benefits

:

-

Increased market share

 

-

Improved price realization

-

Neutralizing local competitors

  • 2. Exploiting economies of global scale

Benefits

:

-

Spreading fixed cost over larger volume

 

-

Reducing capital and operating costs per unit

-

Pooling global purchasing power over suppliers

-

Creating requisite critical mass in selected activities

  • 3. Exploiting economies of global scope

Benefits

:

-

Providing coordinated services to global customers

 

-

Market power vis-a-vis competitors

  • 4. Tapping the most optimal locations for activities and resources

Benefits

:

-

Performance enhancement

 

-

Cost reduction

-

Risk reduction

  • 5. Maximizing knowledge transfer across locations

Benefits

:

-

Faster product and process innovation

 

-

Lower cost of innovation

-

Reduced risk of competitive preemption

  • 6. Playing the global chess game

Source: Govindarajan & Gupta, 2001:75-93
Source: Govindarajan & Gupta, 2001:75-93

Drivers of Global Value: The Star Framework

Activity architecture

(concentration, differentiated center, or dispersion ? )

A - Ensuring critical mass and full exploitation of economies of scale Changes ? B -
A
-
Ensuring critical mass and full
exploitation of economies of scale
Changes ?
B
-
Shifts in factor cost differences
-
Optimizing both the quality
and cost competitiveness
-
Changes in tariff regimes
-
Trends in demand patterns
C
-
Eliminating unnecessary
duplication
-
Variations in product design
-
Adoption of new manufacturing
D
technologies
F
D
D
C
C
B
B
A
A
Locational competencies
Global coordination
(building world-class competencies)
(ensuring frictionless coordination)
Upstream
:
-
Using an incentive system
Downstream :
world-class competencies
world-class market sensing
and selling competencies
-
Instituting a bench-marking system
-
giving high visibility to outstanding
individuals

A -

Best in industry (Ideal)

B

-

Above average (Good)

C

-

Industry average (Satisfactory)

D

-

Below average (Poor)

F

-

Worst in industry (Totally unsatisfactory)

Mapping of Global Ambition Source: Philippe Lasserre (2012), Global Strategic Management, 3 rd ed., New York:
Mapping of Global Ambition
Source: Philippe Lasserre (2012), Global Strategic Management, 3 rd ed.,
New York: Palgrave Macmillan, p.35.
The Global Revenue Index (GRI) is calculated by taking the ratio of the com of sales
The Global Revenue Index (GRI) is calculated by taking the ratio of the com
of sales in the major world regions to the industry distribution of demand in th
It is calculated with the formula:
GRI =
∑ {Ix n (cum RX n + cum RX (n-1) )}
Goodyear: calculation of the global revenue index (GRI)
Distribution of sale
(%)
Asia (%) Rest of the World (%) Europe (%)North America
Industry
Goodyear RX
Cum RX
Cum RX-n
Cum RX + cum RX-n
Ix *(cum RX + cum RX-n)
30
13
31
26
11
12
34
43
11
23
57
100
0
11
23
57
11
34
80
157
3.3
4.42
24.80
40.82
Then Goodyear’s GRI (%) = 3.3 + 4.42 + 24.80 + 40.82 = 73.34
The Global Capability Index (GCI) is calculated in a similar way, but instead
distribution of sales, one takes the distribution of assets for capital-intensive i
else of personnel.
Source: Philippe Lasserre (2012), Global Strategic Management, 3 rd ed.,
New York: Palgrave Macmillan, pp.64-66.
Scope Economies in Product and Market Diversification Sources of Scope Economies Product Diversification Market Diversification Shared
Scope Economies in Product and Market Diversification
Sources of Scope Economies
Product Diversification
Market Diversification
Shared physical assets
Factory automation with flexibility
to produce multiple products (Ford)
Global brand name (Nokia)
Shared external relations
Using common distribution channels
for multiple products (Samsung)
Servicing multinational customers
worldwide (Citibank)
Shared learning
Shared R&D in computer and
communications business (NEC)
Pooling knowledge developed in
different markets (Procter &
Gamble)
Source: Bartlett, Ghoshal & Beamish, 2008:202
Source: Bartlett, Ghoshal & Beamish, 2008:202
Worldwide Advantage: Goals and Means Sources of Competitive Advantage Strategic Objectives National Differences Scale Economies Scope
Worldwide Advantage: Goals and Means
Sources of Competitive Advantage
Strategic Objectives
National Differences
Scale Economies
Scope Economies
Achieving efficiency in
current operations
Benefiting from
differences in factor
costs—wages and
cost of capital
Expanding and
exploiting potential
scale economies in
each activity
Sharing of investments
and costs across
markets and
businesses
Managing risks
through
multinational
flexibility
Managing different
kinds of risks arising
from market- or policy-
induced changes in
comparative advantages
of different countries
Balancing scale with
strategic and
operational
flexibility
Portfolio diversification
of risks and creation of
options and side bets
Innovation, learning,
and adaptation
Learning from societal
differences in
organizational and
managerial processes
and systems
Benefiting from
experience—cost
reduction and
innovation
Shared learning across
organizational
components in
different products,
markets, or businesses
Source: Bartlett, Ghoshal & Beamish, 2008:203
Source: Bartlett, Ghoshal & Beamish, 2008:203
Strategic Orientation and Configuration of Assets and Capabilities in Multinational, International, Global, and Transnational Companies Multinational
Strategic Orientation and Configuration of Assets and Capabilities in Multinational,
International, Global, and Transnational Companies
Multinational
International
Global
Transnational
Stategic
orientation
Building flexibility to
respond to national
differences through
strong, resourceful,
and entrepreneurial
national operations
Expoiting parent-
company knowledge
and capabilities
through worldwide
diffusion and
adaptation
Building cost
advantages
through
centralized,
global-scale
operations
Developing
global efficiency,
flexibility, and
worldwide
learning
capability
simultaneously
Configuration of
assets and
capabilities
Decentralized and
nationally self-
sufficient
Sources of core
competencies
centralized, others
decentralized
Centralized
and globally
scaled
Dispersed,
interdependent,
and specialized
Source: Bartlett, Ghoshal & Beamish, 2008:206
Source: Bartlett, Ghoshal & Beamish, 2008:206

Elements of Global Organization

Global Strategy Information System

Cross-Country Coordination

Global Knowledge Sharing

Global Strategic Planning

Global Budgeting

Global Customer Management

Global Performance Review and Compensation

 

Management

Management

Processes

Global Identity

Commitment to Worldwide

  • (v. Domestic) Employment

Interdependence

  • (v. Autonomy) of Businesses

Organization

Structure

Ability to Develop and Implement Global Strategy
Ability to Develop
and Implement
Global Strategy
Culture
Culture

Integrated Global Authority

Absence of Domestic/International Split

Strong Business Dimension

People

People

Use of Foreign Nationals

Multicountry Careers

Frequent Travel

Statements and Actions of Leaders

Global Boards of Directors

Source: Yip, 2003: 184

Elements of Global Organization  Global Strategy Information System  Cross-Country Coordination  Global Knowledge Sharing

Desired Organization Features for Types of Geographic Strategies

Geographic

Organization

Management

Scope

Structure

Processes

Global

Centralized global

Extensive coordination

authority

processes

No domestic-international split

Global sharing of technology

Strong geographic

Global strategy

dimension relative

Global information system

to business and function

 

Global strategic planning,

budgets, performance

review, and compensation

Multilocal

Dispersed national authority

Transfer of technology

No domestic-international split

from headquarters out

National information systems

Strong geographic dimension

relative to business and

function

Export-Based

Centralized home country

control

Separate domestic and

international divisions

May have strong

functional dimension

Source: Yip, 2003: 185

National strategic planning,

budgets, performance

review, and compensation

Direction not coordination

One-way information

flow to headquarters

No technology transfer

Focus on sales targets

People

Culture

Multicountry careers

Global identity

Foreign nationals in home

Interdependence

and third countries

Extensive travel

Professional

Multinational

expatriates

identity

Nationals run

Autonomy

local businesses

Limited travel

Home country nationals run

Home country

local marketing subsidiaries

culture

Desired Organization Features for Types of Geographic Strategies Geographic Organization Management Scope Structure Processes Global Centralized

Different Corporate Approaches to Worldwide Strategy

Fragmented Multilocal Strategies Integrated Country Strategies Businesses Businesses Countries A B C D E Countries A
Fragmented Multilocal Strategies
Integrated Country Strategies
Businesses
Businesses
Countries
A
B
C
D
E
Countries
A
B
C
D
E
U.S.A.
U.S.A.
Japan
Japan
Germany
Germany
etc.
etc.
Integrated Business Global Strategies
Integrated Corporate Global Strategy
Businesses
Businesses
Countries
A
B
C
D
E
Countries
A
B
C
D
E
U.S.A.
U.S.A.
Japan
Japan
Germany
Germany
etc.
etc.

Source: Yip, 2003: 190

Different Corporate Approaches to Worldwide Strategy Fragmented Multilocal Strategies Integrated Country Strategies Businesses Businesses Countries A
Match of Organizational and Strategic Logic Organizational Logic Global Integration National Firms Fragmented Global Strategic Logic
Match of Organizational and Strategic Logic
Organizational Logic
Global
Integration
National
Firms
Fragmented
Global
Strategic Logic
Optimal Positions

Source: Yip, 2003: 191

Match of Organizational and Strategic Logic Organizational Logic Global Integration National Firms Fragmented Global Strategic Logic

Structural Options for Firms Pursuing Global Strategies

Decentralized federation

Coordinated federation

Centralized hub

Transnational structure

Strategic and operational decisions are delegated to divisions / country companies

Operational decisions are delegated to divisions / country companies; strategic decisions are retained at corporate headquarters

Strategic and operational decisions are retained at corporate headquartes.

Strategic and operational decisions are delegated to those organizational entities that maximize responsiveness to local conditions and global integration

Source : Bartlett &Ghoshal (1989) as quoted by Barney, 2007:503

Structural Options for Firms Pursuing Global Strategies Decentralized federation Coordinated federation Centralized hub Transnational structure Strategic
Local Responsiveness, Global Integration, and Organizational Structure High Decentralized Transnational federation structure (The Europeans) Coordinated Coordinated
Local Responsiveness, Global Integration, and Organizational Structure
High
Decentralized
Transnational
federation
structure
(The Europeans)
Coordinated
Coordinated
federation
federation
(The Americans)
(The Americans)
Centralized
hub
(The Japanese)
Low
Low
High
Importance of Global Integration
Importance of Local Responsiveness

Source : Barney, 2007: 505; cf. Grant, 2008:385-389.

Local Responsiveness, Global Integration, and Organizational Structure High Decentralized Transnational federation structure (The Europeans) Coordinated Coordinated

Factors Influencing the Propensity of a Firm to Enter into Strategic Alliances

   
 

A.

Firm Characteristics

   

Product-market diversity of firm

Firm’s size and resource position (ability to mobilize

resources independently)

   

Prior involvement in strategic alliances

Top management’s attitudes towards strategic alliances

Corporate culture

   
 

Industry Characteristics

   
 

B.

   

Minimum efficient scale

Convergence of industries and associated costs of

product development

   

Importance of speed of entry into market

Cost structure

Threat of new entrants

   
Factors Influencing the Propensity of a Firm to Enter into Strategic Alliances A. Firm Characteristics •
Factors Influencing the Propensity of a Firm to Enter into Strategic Alliances A. Firm Characteristics •

Propensity of Firm

to Enter

into Strategic Alliances

Factors Influencing the Propensity of a Firm to Enter into Strategic Alliances A. Firm Characteristics •
 

Threat of competition from substitutes

   
 

C. Environmental Characteristics

   

Changes in buying patterns

Degree of market uncertainty

Rate of technological change

 

Breadth of competencies/skills/capabilities

required to capitalize on environmental opportunities

Political, legal and regulatory environment

   

Source: Varadarajan & Cunningham, 1995: 291

Factors Influencing the Propensity of a Firm to Enter into Strategic Alliances A. Firm Characteristics •
 Decision Makers  Worldwide Strategy  Coalition Politics  Decision Context  Routine Responses 
 Decision
Makers
 Worldwide
Strategy
 Coalition
Politics
 Decision
Context
 Routine
Responses
 Resource
Constraints
 Stakeholders
STAGE 1
STAGE 1

The ICV Decision Tree

Management Contract Turn-Key Plant 3 Franchise CONTRACT Supplier Contract NEGOTIATED Service Contract CONTRACT
Management
Contract
Turn-Key Plant
3
Franchise
CONTRACT
Supplier Contract
NEGOTIATED
Service Contract
CONTRACT
Asset Specificity MARKET Opportunism SUCCESS Tacitness of Resource FAILS MARKET FAILURE CJV  Resource Type MARKET
Asset Specificity
MARKET
Opportunism
SUCCESS
Tacitness of Resource
FAILS
MARKET
FAILURE
CJV
 Resource Type
MARKET
* Tacit resources
* Physical resources
 Network Relations
ICV
* Trust
1
2
* Opportunism
 Globalization Strategy
 Cultural Similarity
WOS
* Organizational
* National
EJV
HIERARCHICAL
INEFFICIENCY
DEAL
Non-Core Business
FAILS
Resource Preservation
HIERARCHICAL
Need for Complimentary
EJV NEGOTIATED
SUCCESS
Assets
Government Policy
STAGE 2
 Decision Makers  Worldwide Strategy  Coalition Politics  Decision Context  Routine Responses 
 Resource Type  Network Position  Routines  Learning Potential  Interdependencies  Bargaining Power
 Resource Type
 Network Position
 Routines
 Learning Potential
 Interdependencies
 Bargaining Power
* Ownership Ratio
* Relative
Dependency
 Decision Makers  Worldwide Strategy  Coalition Politics  Decision Context  Routine Responses 
 

STAGE 3

Independent EJV

  • 3 Dominant EJV

Shared EJV

Shared EJV

Source: Tallman & Shenkar in Wortzel & Wortzel, 1997: 254
Source: Tallman & Shenkar in Wortzel & Wortzel, 1997: 254