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International Strategy: Globalization Drivers - Assess Dual Pressures
International Strategy: Globalization Drivers - Assess Dual Pressures
✦ Coca-Cola in Chinese:
“bite the wax tadpole”
✦ Coca-Cola 30 liter
bottle??
✦ U.S. carmakers’ left-
hand drive cars
Effective Standardization
Coca-Cola’s
“transnational polar bears”
McDonald’s
“Big Mac”
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
Effective Adaptation
✦ McMutton Pie in
Australia
✦ Wendy’s shrimp sandwich
in Japan
✦ Campbell’s non-
condensed soups in the
UK
Cadillac Seville
✦ Coca-Cola’s 175 ml ✦ 1997 Asian edition
containers in Japan
✦ Right-hand drive, shorter
seats, closer pedals, 10”
shorter, retractable mirrors
Globalization Drivers
✦ Market Drivers
✦ Cost Drivers
✦ Government Drivers
✦ Competitive Drivers
Low High
Multidomestic Global
Strength of Market Drivers
Aircraft
Computers
Automobiles
Soft Drinks
Toothpaste
Retail Banking
Book Publishing
Baked Goods
Low High
Multidomestic Global
Strength of Cost Drivers
Pharmaceuticals
Aircraft
Computers
Automobiles
Toothpaste
Retail Banking
Baked Goods
Soft Drinks
Low High
Multidomestic Global
International Strategy:
Managing Dual Pressures
Pressures for Global Efficiency
High
Low
Low High
Pressures for Local Responsiveness
Value Chain
Location and standardization/adaptation
Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound Outbound
Operations Marketing Service
Logistics Logistics
Value Chain
Headquarters
Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound Outbound
Operations Marketing Service
Logistics Logistics
Value Chain
Headquarters
Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound Outbound
Operations Marketing Service
Logistics Logistics
Upstream
Value Chain
Headquarters
Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound Outbound
Operations Marketing Service
Logistics Logistics
Upstream Downstream
Value Chain Sub-functions (Nestles?)
Infrastructure
Technology Development
Procurement
Human Resource Management
Profit
Margin
Inbound Outbound
Operations Marketing Service
Logistics Logistics
High
Export
Low Strategy
??
Low High
Pressures for Local Responsiveness
Export Strategy
(same as Export entry mode)
Germany
U.S.
Mexico
Malaysia
International Strategy:
Managing Dual Pressures
Pressures for Global Efficiency
High
Export Multidomestic
Strategy
Low Strategy
??
Low High
Pressures for Local Responsiveness
Multidomestic Strategy
Germany
U.S.
Mexico
Malaysia
Entry?
International Strategy:
Managing Dual Pressures
Pressures for Global Efficiency
High
Global
Strategy
Export Multidomestic
Strategy Strategy
Low ??
Low High
Pressures for Local Responsiveness
Global Strategy
(Textbook Variety)
Germany
U.S.
Mexico
Malaysia
Entry?
International Strategy:
Managing Dual Pressures
Pressures for Global Efficiency
Export Multidomestic
Strategy Strategy
Low ??
Low High
Pressures for Local Responsiveness
Transnational Strategy (v.1)
Germany
U.S.
Mexico
Malaysia
Entry?
Transnational Strategy (v.2)
Germany
U.S.
Mexico
Malaysia
Entry?
Transnational Strategy (v.3)
Germany
Engines
U.S.
Steel
Mexico
Final
Assembly
Malaysia
Trim, seats,
Entry? glass
Strategic Importance
Entry Mode Decision Matrix
Hi
of Country
Lo Hi
es,
Lo rc
u l,
s o
Lo Hi
Re ontro
Stand-alone Attractiveness C isk
R
of Country
Foreign Market Entry Modes
✦ Export
✦ Licensing
✦ JointVenture
✦ WOS
– Acquisition
– Greenfield
Intl. Strategy and Entry Mode
Germany
JV
U.S. H.Q.
Mexico
WOS-G
Malaysia
Export