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International Environment and Strategy: C H A P T E R
International Environment and Strategy: C H A P T E R
Table of Contents
Chapter Vignette Cultural Aspects of Strategy International Environmental Forces Host Government, Political and Legal Issues The Competition Generic MNC Strategies Global Integration Strategy Host Country Focus Strategy Hybrid International Strategy Industry Characteristic and Strategy Global Industries Multi-domestic Industries International Industries
Kamal Fatehi Managing Internationally Chapter 6 International Environment and Strategy
Implementation
Control
Host Gov. Increase National Income Employment Skill development Support of domestic firms Diversification of economic activities
Kamal Fatehi Managing Internationally
MNC ROI Efficient, low-costs Selective hiring Specialization of production Acquisition of indigenous capacity
Chapter 6 International Environment and Strategy
Domestic R&D Investment in backward areas Balance of payments. Control of pattern of econ develop Maximize revenues
Kamal Fatehi Managing Internationally
Location of R&D Locate in large cities Currency convertibility Free trade and investment Minimize tax
Chapter 6 International Environment and Strategy
Love-Hate Relationship Wealth expectation Value incongruity Technology transfer Host Gov Concerns MNC flexibility Interdependency and control
Chapter 6 International Environment and Strategy
The Flexibility of MNCs Interdependency and Control Efficiency The Effect on the Domestic Strategic Industries Taxation MNC headquarters as the decision center
Kamal Fatehi Managing Internationally Chapter 6 International Environment and Strategy
Characteristics of MNC-Host Country Relationships MNCs Bargaining Power Bargaining Power of Host Countries Deterioration of Relationships
Nationalization Expropriation Creeping Expropriation Confiscation Domestication
Political Risk
Kamal Fatehi Managing Internationally Chapter 6 International Environment and Strategy
The Competition
Competition from Domestic and StateControlled Firms Competition from Other MNCs
Industry Characteristics and MNC Strategy Product and Market Requirements: 1. Product Specifications Size, Color, Shape, Taste, Function, Features 2. Market Characteristics Distribution Channels, Service Needs and Expectations
Kamal Fatehi Managing Internationally Chapter 6 International Environment and Strategy
Operational Requirements
Gain Competitive Position: Examples: 1. Economies of Scale 2. Investment Requirements in R&D and Manufacturing Facilities
Global
International
Worldwide Worldwide
Global
National
National
Global Industries
Exploit economies of scale and experience, location, product differentiation, process technology and control of distribution channels.
Highly centralized large scale manufacturing and R&D Products are produced, sold and serviced worlwide, without many variations.
Kamal Fatehi Managing Internationally Chapter 6 International Environment and Strategy