International & Transnational

strategies
Presented by,
Kirthiga Sekar
08AA19
 Question
• Explain about ‘internationalization’ &
‘transnationalisation’ as strategic
orientations for firms to compete in the
international arena. On what basis does
each of these differ from the other?
• Explain the international strategic business
model of an Indian firm.
 Strategic choices:
Managing Dual Pressures
Pressures for cost reduction

High

Low

Low High
Pressures for Local Responsiveness
 Strategic choices:
Managing Dual Pressures
Pressures for cost reduction

High

international
Low Strategy

Low High
Pressures for Local Responsiveness
International Strategy

Germany
U.S.

Mexico

Malaysia
 Examples
✦ IBM
✦ Microsoft – headquartered at Redmond,
Washington , where it develops the core
architecture
✦ Yahoo! – centralized operations at San Jose,
California
✦ Kellogg
✦ Procter & Gamble
Barbie: The “All-American”
Girl Goes Overseas
✦ Barbie is 41 years old
✦ Sold in 130 countries
✦ National adaptations:
– Physical features
– Costumes
– Activity sets
✦ Standardized physique:
– Scaled to 6’2”, 110 lbs.
– 38-18-28
 Strategic choices:
Managing Dual Pressures
Pressures for cost reduction

High
Transnational
Strategy

International
Strategy
Low

Low High
Pressures for Local Responsiveness
Transnational Strategy

Germany
Engines
U.S.
Steel
Mexico
Final
Assembly

Malaysia
Trim, seats,
glass
 Examples
✦ Caterpillar – Japan Coca-Cola’s
✦ Unilever “transnational polar bears”
Factors International Transnational
Foreign acquisitions by Indian
firms,2000-6
Source : Federation of Indian
Chambers of Commerce and Industry
(FICCI) 2006
 BHARAT FORGE
LIMITED
• Company of the US$ 1.5 billion Kalyani Group
• Largest exporter of auto components from India
and one of the leading chassis component
manufacturers in the world.
• Entered export market in early 80’s
✦ Initial exports were to Soviet Union and the
company soon started exporting to European and
Japanese markets.
 0
1
2
3
FY97

FY98

FY99

FY00

FY01

FY02
Auto component exports (US$bn)

FY03

FY04

FY05E

FY06E

FY07E

FY08E

FY09E
BFL’s contribution in making
‘Made in
India’ global
✦ Exports comprise nearly 40 per cent of sales
✦ Leading supplier of engine and chassis
components to global customers
✦ Strong relationship with 36 global customers like
Toyota, GM, Honda, Mitsubishi, Ford, Daimler
Chrysler, Mercedes Benz, Caterpillar, Audi,
Renault, Cummins, Dana etc
✦ Made several acquisitions to achieve growth –
CDP Aluminiumtechnik (a forging company in
Germany), Federal Forge (manufacturer of
complex forged steel components in the US) and
Imatra Forging Group (having forging companies
in Sweden and Scotland)
Demonstration of dual pressures
✦ Global rise in the prices of steel. BFL has
been able to pass on the same to its
customers. – low pressure for cost reduction

✦ Acquisitions strengthened its position as a

major supplier to the global passenger car
industry. – low pressure for customisation
 total income

12000
10000 9880
8631
Rs. million

8000
6000 6103

4000 4312
3120
2000
0
1 2 3 4 5
year
 revenue from exports

5000
4590
4000
Rs. million

3560
3000
2478
2000
1592
1000 986

0
1 2 3 4 5
year
Factors fuelling Bharat Forge’s
global
initiatives
✦ Creating global level capacity: creating
capacities which can cater to the global
customers requirements.
✦ Global Centre of Excellence: This centre
focuses on research & development
✦ Dual shore manufacturing model: Core
components in India and minor
customisations in a location closer to
customer.
 References
✦ International business - Hill and Jain
✦ International business – Daniels,
Radebaugh, Sullivan
✦ Trade and globalization – Deepak Nayyar
✦ www.bharatforge.com
THANK YOU