International Strategic

Management

INTERNATIONAL STRATEGIC MANAGEMENT

Name Akashdeep singh

Professor name : Adrian monaghan
Student id :@00615558
International Strategic
Management

Table of Content

1. Porter’s Five Forces Model………………………………………………….. 3

i. Competitive Rivalries………………………………………………….. 3

ii. Threats of New Entrants............................................................................3

iii. Bargaining Power of Suppliers..................................................................4

iv. Bargaining Power of Customers...............................................................4

v. Threats of Substitute Products and Services.........................................5

2. Value Chain Model....................................................................................................5

i. Inbound Logistics …………………………………………………..

ii. Operation …………………………………………………..………….. 6

iii. Outbound Logistics ………………………………………………….. 6

iv. Marketing and Sales ………………………………………………….. 7

v. Services …………………………………………………..………….. 7

vi. Support services ………………………………………………….. 9

3. Modes of Entry........................................................................................................10

i. Licensing and Franchising.......................................................................10

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ii. Partnership and strategic alliance............................................................11

4. Creating Shared Value..........................................................................................12

5. References...............................................................................................................12

6. Appendixes.....................................................................................................................12

International Strategic Management

Porter’s Five Forces Model

Many cities in wealthy nations are experiencing changes in their urban mobility, and these shifts
are not tied to the continuance of linear trends like increased motorization witnessed in the later
part of the twentieth century. Porter's Five Factors model is useful for examining five competitive
forces that define an industry, as well as determining potential strengths and weaknesses. Porter's five
forces may be used to assess the provision of mobility in London's competitive environment.

Competitive Rivalries

The force is used to figure out how many rivals are in the industry. The mobility services business
in London has a somewhat high barrier to entry for new entrants. Some companies provide private
mobility services, and they're breaking up the usual playbook by disrupting London's mobility
services with
internet-styled digital transportation. There are firms like Uber and bicycle-sharing companies like
Mobike, for example. In London, the mobility services business is more likely to achieve more
collaboration and integration. The London transit protocol provides a common platform for various
transportation providers. Commuters may quickly browse, book, and pay for their trips using a user-
friendly interface (Walder, 2017). As a result, rather than facing direct competition from other kinds
of mobility service providers, the future of this business in London will witness greater collaboration
and cooperation.

Threats of New Entrants

New entrants into the market have an impact on the competitive situation because they might drive
current transport firms to keep prices low or maintain pricing. In London, the mobility business
necessitates the attainment of certain economies of scale. Without this, the firm may not be able to
survive in this competitive atmosphere. Because of the digital mobility that exists in London, a significant
amount of money must be spent on brand development and raising client knowledge of the new
methods that the brand mobility service operates and how they intend to assist consumers.
Furthermore, there are substantial obstacles in the United Kingdom when it comes to navigating the
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Management
policies that have been created by the local government. In London, there are a number of large-
scale organisations that offer navigation mobility services.
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Bargaining Power of Suppliers

Companies in London's mobility service business buy a variety of inputs, such as infrastructure
and equipment, and they all target the same clients. They also provide almost identical items with
no distinction. The option to replace and adjust the cost is limited, and the mobility client is unlikely
to retain clients, putting downward pressure on costs. As a result, supply has little negotiating leverage
in London.

Bargaining Power of Customers

Powerful clients in many sectors may use their strength to force price reductions and demand
additional services at reduced pricing. The quantity of consumers or buyers accessible to the
organisation, the importance of each client, and the amount of money it takes to recruit new
customers all influence this. Customers are at the core of enterprises all around the globe, and the
transportation sector is no exception. Instead of using conventional mass transportation to provide
mobility services, there is a change in the mobility services in London. Commuters will be able to mix
and match mobility services that are necessary to go from one location to another in this way. As a
result, consumers are in charge in London, and they have the ability to tailor their travels, including
selecting service providers and modes of transportation. As a result, clients' negotiating power in this
business ranges from modest to high.

Threats of Substitute Products and Services

If replacement services and items can be employed instead of mobility services, profitability would
suffer. The supply of mobility services in London is unique, and the city cannot function without it in
order for residents to travel from one location to another inside the city. As a result, commuters do
not have many options or alternatives to what is now available in the urban core. As a result, the
risk of London having replacement mobility services is minimal. The mobility sector evolves over
time and is not static; as time passes, new opportunities emerge.

Model of the Value Chain The value chain is made up of many marketing, design, and
distribution operations (Lee & Han, 2009). The competitive advantage is derived from various discrete
operations that a business designs when it comes to creating, promoting, manufacturing,
supporting, and providing services, and it cannot be comprehended only by looking at the companies
as a whole. SEAT Minimo is a low-cost mobility profession that provides transportation at a cheap
rate (Estampe, 2014). This organization's business process includes certain operations that provide
value to its services, and these activities make up the value chain model. The value chain model gives
you a competitive edge over your rivals and guarantees that replacement risks are minimised.
Their activities may be split into two categories: main and secondary activities. The main activities
are in keeping with the company's key aims, which is to achieve operational effectiveness, and this
is accomplished; thus, the primary activities are Minimo's focus. The key operations are linked to
the selling, maintenance, physical creation, and service support. The major activities are as follows:

Inbound Logistics

Pricing: When compared to aircraft, the minimum cost of high-speed mobility services is quite
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inexpensive.
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Minimo is an all-electric quadricycle with a 15 kWh battery and a claimed range of 100
kilometres. Minimo's battery is constructed with a removable battery pack that can be switched
out for charging (Martorell, 2019). It is reasonably inexpensive, and it is fuel-efficient for the sake
of the environment as well as cost-cutting by lowering the weight of the seats. To minimise weight
and move on electric wheels, the system uses Nono technology painting.

Operations

Ticket Counter: Customers will find ticket counters at all of the locations where Minim operates,
saving time. Safety Service: Minim has been praised for providing a better degree of personnel
management that ensures the passengers' safety, since safety comes first for travellers (Harrington,
2015). Minim always makes sure that passengers arrive at the appropriate spot at the right time.

Outbound Logistics

Minim provides a luggage method for light travellers, such as compact bags and other languages that
may be stored beneath the seat.

Marketing and Sales

Minim website promotion is done via search engines and on their own website. The key selling
point is the affordability and speed; despite the fact that substantial baggage cannot be carried,
the costs are inexpensive when compared to jets (Salens, 2019). Minim also provides a seasonal
discount, which aids in the promotion and marketing of the company to passengers during peak
season.

Minim's advertising is bold; it also employs dynamic and vivid colours, as well as beautiful painted on the
SEAT Minim.
Electronic Tickets: The company offers online tickets and is required to keep customer information
secure. The information is transferred to the client's mobile phone.

Service:

i. Reliability

ii. Aiming for customer happiness iii. Providing two seats for a trip

iv. There will be no pre-assigned seating; instead, first-come, first-served will be served.

v. Payments via credit card

vi. City inhabitants, intra-city travellers, and businesspeople are the target audiences.

Support Activities
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They are used to support the principal operations in order to help organisations and people in the
London mobility sector get a competitive edge over their competitors.

SEAT Minim has a great name and brand recognition in Italy, and this is expanding to other places
such as London, allowing the company to spread its services to these nations. It aids in the
enhancement of their brand's reputation. The model is also built on a low cost, which results in cost
effectiveness. The potential drawback in London is that clients may believe that cheap pricing
equates to inferior quality.

SEAT Minim mostly hires young employees, who are required to dress casually in order to promote
the company's corporate culture. Job applications are submitted online. It also promotes diversity,
allowing the workforce to be the driving force behind success. Technology: SEAT Minim employs
cutting-edge technology and maintains a consistent IT business strategy in order to provide high-
quality services. In order to make it simpler for clients to access their services and routes, the
corporation has also introduced mobile applications.

SEAT Minim works with external information technology businesses like Microsoft to guarantee that the
IT component of the company is well-maintained via CRM, client databases, online reservations,
and emailing (Salens, 2019). The firm has developed an innovative approach for measuring the
performance of its suppliers.

Table 1: value chain model

Modes of Entry

The SEAT 'Minim' may reach London through a variety of routes. The method of entrance to be
examined is determined by the benefits that the approach offers as well as the financial aspects that
will decide how smoothly the company runs (Elsner, 2014). The company might choose from a
variety of approaches to enter the new market. When it comes to entering a new market, there are
approaches with high risks and methods with minimal risks.
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Licensing and Franchising

SEAT ‘Minim' may leverage the license arrangement with the mobility firm in London to enter the market.
The license technique enables speedy entry into the London market while assuming minimal legal
and financial risks. A license strategy that permits foreign enterprises to sell their services or goods
to a producer is known as international licensing (Welch, 2015). In the same way, it permits the use
of intellectual property rights such as copyright, trademarks, and patents in return for royalties.
Because it utilizes the licensor's IP, licensing will allow SEAT "Minim" to operate in London, United
Kingdom (Plemmons, 2018).

As a result, the licensee will be obliged to pay a charge in return for the right to utilize the
services provided by SEAT 'Minim.' Because the licensor will only put in a little amount of money,
it has the potential to provide a huge profit, making it a viable approach for SEAT 'Minim' to
exploit (Bridgman, 2016). However, the corporation should be aware that, since it would be the
licensee's responsibility to sell the services and goods delivered in London, potential marketing
returns may be lost. As a result, this mode of admission lowers the cost and potential hazards.

Franchising is the process of selling a business in the form of a contractual partnership. The seller is
known as the franchisor, and the firm in partnership is known as the franchisee (Baena, 2012). SEAT
'Minim' may also elect to sell franchises, in this case the franchiser grants a foreign firm the right to
use the brand's name and offers mobility services to the London-based company. In this situation,
the franchisee will be responsible for operations and must agree to operate in accordance with the
business model established by the franchiser, SEAT 'Minim.' The franchisee is responsible for
providing new product support, training, and advertising in this situation. While a result, franchising
becomes a natural means of firm growth as it continues to function domestically according to the
franchise model. In exchange for the franchisor's services, the firm must make a lump sum
payment and share future profits in the form of royalty payments (Bagchi, S., & Sivadasan, 2017).
Even though the franchisor benefits more from collaboration than the franchisee, the success of
such operations is reliant on each other under the franchising approach.

Strategic Alliances and Partnerships

Another strategy that SEAT ‘Minim' may utilise is to form a strategic relationship with another
mobility firm in London. Contractual agreements between the enterprisers are required for the
strategic partnership. According to such an agreement, the parties concerned are likely to work in
a certain way in order to attain the shared goal (Ahsan & Musteen, 2011). To establish if such
partnerships are viable for a SEAT 'Minim,' it must assess the value that the partner may offer to
the endeavour, taking into account both intangible and concrete factors (Ang, Benischke, & Doh,
2014). SEAT 'Minim' is anticipated to gain an edge as a consequence of a relationship with a local
mobility provider in London.

that local enterprises have a greater grasp of the local mobility market and culture, and hence can
conduct business better than imposing international corporations.
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SEAT 'Minim' may also leverage joint ventures and strategic partnerships, which will enable the
firm to share risks as well as the necessary resources to penetrate the London market (Almor, 2018).
Even though resources must be shared, it will provide the firm with a level of flexibility that would
not be possible if SEAT ‘Minim' went via the direct investment entrance approach on its own.
Consider this entrance route because it provides for simple compliance with government rules and
shared product development (Gayle & Xie, 2018). There is also technology sharing, reward sharing,
and risk sharing in this entrance technique. SEAT 'Minim' may also profit from joint ventures and
strategic alliances since local enterprises may have political ties, and the ease of operation may be
dependent on such partnerships.

Creating Value for Everyone (CSV)

SEAT ‘Minim' is one of the few firms that has considered producing shared value in the majority of
its operations and industry design. The organization has guaranteed that corporate social responsibility
and competitive benefits are linked. As a result, when this organization works as a corporate entity, it
has been able to increase its profitability while simultaneously increasing environmental performance,
public health, financial security, and other essential aspects of society's well-being (Kim, 2018). To
guarantee that the firm creates shared value, the corporation has explored how it may benefit
community health by reducing air pollution. First and foremost, SEAT 'Minim' is one of the businesses
that provides mobility services and has included environmental considerations into its services
(Martorell, 2018). SEAT 'Minim' has pledged to conserve the environment by using recycled
materials.

providing sustainable transportation and serving as a role model in environmental protection The
organization is committed to reducing its environmental impact and using its own capabilities as a
means of tackling environmental concerns throughout the life cycle of the mobility services it
provides. The business provided low-pollution transportation services, and selecting SEAT
‘Minim' implies lowering dangerous air pollution caused by exhaust emissions (Martorell, 2018).
The SEAT ‘Minim' emits no pollutants into the atmosphere. It also makes use of renewable
energy, lowering greenhouse gas emissions even further (Martorell, 2020). The organization's
products are environmentally beneficial since they can be recycled, and the cushioning is made of
bio-based components.

The firm is also concerned about the health of its customers and the wider public, and lowering
dangerous exhaust emissions improves air quality, resulting in lower costs and health concerns
associated with air pollution (Liel von, 2016). When compared to gasoline-powered buses and vehicles,
the SEAT 'Minim' is also quieter, implying less noise pollution.
The public's and passengers' safety is also taken into account when creating shared value, and in
this instance, they have a lower center of gravity, which minimizes the likelihood of rolling over.
Furthermore, they provide a lesser danger of severe explosions and fires, and they are even safe in
the event of any kind of catastrophe, such as a collision (Liel von, 2016). As a result, it addresses
the community's health by providing the safest modes of transportation. Furthermore, since the SEAT
'Minim' is a two-seat mobility device, it decreases the number of persons who may be victims at the
same time in the event of an accident (Seat, 2018). Furthermore, since the number of passengers
on board at any one moment is restricted, it may efficiently be utilized to reduce the risk of
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spreading infectious illnesses such as the new coronavirus.
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Management

References

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uncertainty: A review and extension. International Journal of Management

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Almor, T. (2018). Towards a contingency view of market entry strategies: Contextual

and strategic factors. Foreign Direct Investment and Strategic Alliances in Europe,

2(1), 5-25.

Ang, S. H., Benischke, M. H., & Doh, J. P. (2014). The interactions of institutions on foreign

market entry mode. Strategic Management Journal, 36(10), 1536-1553.

Baena, V. (2012). Master franchising as foreign entry mode: Evidences from the Spanish

franchise system. ISRN Economics, 2012(3), 1-8.

Bagchi, S., & Sivadasan, J. (2017). Barriers to entry and competitive behavior: Evidence from

reforms of cable franchising regulations. The Journal of Industrial Economics, 65(3),

510-558.

Bridgman, B. (2016). Market entry mode: Evidence from the golden age of

Hollywood. Economic Inquiry, 55(2), 778-793.

Elsner, S. (2014). Study 1 – Effects of institutionalized entry modes on entry mode

choices. Retail Internationalization, 58(1), 41-74.

Estampe, D. (2014). Performance evaluation model for value creation. Supply

Chain Performance and Evaluation Models, 1(1), 87-103.

Gayle, P. G., & Xie, X. (2018). Entry deterrence and strategic alliances. Economic

Inquiry, 56(3), 1898-1924.

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Harrington, L. (2015). Supplier logistics in the driver's seat.

https://www.inboundlogistics.com/cms/article/supplier-logistics-in-the-drivers-seat/.

Retrieved July 15, 2020, from https://www.inboundlogistics.com/cms/article/supplier-

logistics-in-the-drivers-seat/

Kim, K. (2018). A case study to explore applicability of creating shared value (CSV) into design

practice. DRS2018: Catalyst, 4(2), 27–46.

Lee, M., & Han, M. (2009). Knowledge value chain model implemented for supply chain

management performance. 2009 Fifth International Joint Conference on INC, IMS

andIDC, 5(4), 54-67.

Liel von, B. (2016). CSV differentiator - Business with underserved markets in developed

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Liel von, B. (2016). Geographic differences of CSR and its impact on CSV

applicability. Creating Shared Value as Future Factor of Competition, 12(5), 99-111.Liel

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environmental-impact.html

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environmental-footprint-of-its-production-by-43-since-2010.html
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Martorell,. (2019, February 25). SEAT Minimó: A vision of the future of urban mobility.

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Appendixes

Porter’s Five Forces Model

Diagram 1: Porter’s Five Forces Model

Diagram 2: SEAT Minimo

 International Strategic Management – Assignment 1
Task 1 – Table Templates
Political Factors – National Level
Factor Data Source Weighting United Kingdom United Kingdom Australia Australia Score
Multiplier (5 = Ranking / Data X Ranking / Data X
most important; Weighting Weighting
1 = least Country Score Multiplier Country Score Multiplier
important) out of 2 out of 2
(2 = most (2 = most
attractive) attractive)
political risk H 5 16/25 = 2/2 10 10/15=1/2 1x5=5
corruption level H 5 16/25 = 2/2 10 16/25 = 1/2 1x5=5
level of future H 4 16/25 = 1/2 4 16/25 = 1/2 1x4=4
govt orientation
Political Subtotal 24 14
Legal Factors – National Level
Factor Data Source Weighting United United Kingdom Australia Australia Score
Multiplier (5 = Kingdom / X Ranking / Data X
most important; Data Weighting Weighting
1 = least Multiplier Country Score Multiplier
important) Country Score out of 2
out of 2 (2 = most
(2 = most attractive)
attractive)
ease of doing H 5 2/2 10 1 1x5=5
business
intellectual H 5 2/2 10 1 1x5=5
property
judicial H 5 2/2 10 1 1x5=5
independence
Legal Subtotal 30 15
 Economic Factors - National Level
Factor Data Source Weighting United Kingdom United Kingdom Australia Ranking Australia Score
Multiplier (5 = / Data X / Data X
most important; Weighting Weighting
1 = least important) Country Score out Multiplier Country Score out Multiplier
of 2 of 2
(2 = (2 =
most most
attractive) attractive)
Country Economic A 5 2/2 10 1 1x5=5
Risk
Economic Freedom A 5 2/2 10 1 1x5=5
Level
Financial Risk E 5 2/2 10 1 1x5=5
Economic Factors - 30 15
National Level
Subtotal

Economic Factors - Metropolitan Level

Factor Data Source Weighting Manchester Manchester Melbourne Melbourne Score
Multiplier (5 = Ranking / X Ranking / X
most important; Data Weighting Data Weighting
1 = least important) Multiplier Multiplier
City Score out of 2 City Score out of 2
(2 = (2 =
most most
attractive) attractive)
Metropolitan GDP F 5 2/2 10 2/2 10
Metro urbanised F 5 2/2 10 1/2 5
area
Population density F 3 1/2 3 1/2 5
Economic Factors - 23 20
Metropolitan Level -
Subtotal
 Technological Factors – National Level
Factor Data Source Weighting United Kingdom United Kingdom Australia Ranking / Australia Score
Multiplier (5 = / Data Score Data X
most important; X Weighting
1 = least important) Country Score out Weighting Country Score out Multiplier
of 2 Multiplier of 2
(2 = (2 =
most most
attractive) attractive)
mobile subscription by B 5 2/2 10 2/2 10
the population
innovation capacity B 5 2/2 10 2/2 10
network connectivity B 2 2/2 10 2/2 10
Technological Subtotal 30 30

Mobility Capability Factors – Metropolitan Level

Factor Data Source Weighting Manchester Manchester Score Australia Ranking / Australia Score
Multiplier (5 = Ranking / X Data X
most important; Data Weighting Weighting
1 = least important) Multiplier City Score out of 2 Multiplier
City Score out of 2 (2 =
(2 = most
most attractive)
attractive)
Resilience and overall H 5 2/2 10 1 =5
performance
vision and leadership H 4 2/2 8 1 =4
Inclusion and service H 3 1/2 6 1 =3
Mobility Capability 24 12
Factors –
Metropolitan Level
- Subtotal
Total Scores by Attractiveness
UK/ MANCHESTER AUSTRALIA / MELBOURNE
Factors
Political (National) 24 14
Legal (National) 30 15
Economic (National) 30 15
Economic (Metropolitan) 23x 1.5 = 34.5 20 x 1.5 = 30
Technological (National) 30 30
Mobility Capability 24 x 1.5 = 36 12 x 1.5 = 18
(Metropolitan)
Total 184.5 = most attractive 122 = least attractive