Profit Growth The percentage increase in net profits over time

Value Creation Performing activities that increase the value of goods or services to
consumers

Operations The various value creation activities a firm undertakes

Organization The totality of a firm's organization, including formal organizational

Architecture structure, control systems and incentives, organizational culture, processes,
and people

Organizational The three-part structure of an organization, including its formal division into
Structure subunits such as product divisions, its location of decision-making,
responsibilities within that structure, and the establishment of integrating
mechanisms to coordinate the activities of all subunits

Controls The metrics used to measure the performance of subunits and make
judgements about how well managers are running those subunits

Incentives The devices used to reward appropriate managerial behavior

Processes The manner in which decisions are made and work is performed within any
organization

Organizational The values and norms shared among an organization's employees

Culture

People The employees of the organization, the strategy used to recruit,

compensate, and retain those individuals and the type of people that they
are in terms of their skills, values, and orientation

Core Competence Firm skills that competitors cannot easily match or imitate

Location Cost advantages from performing a value creation activity at the optimal
Economies location for that activity

Global Web When different stages of value chain are dispersed to those locations around
the globe where value added is maximized or where costs of value creation
are minimized

Experience Curve Systematic production cost reductions that occur over the life of a product

Learning Effects Cost savings from learning by doing

Economies of Cost advantages associated with large-scale production

Scale

Universal Needs Needs that are the same all over the world, such as steel, bulk chemicals,
and industrial electronics

Global A firm focuses on increasing profitability and profit growth by reaping the
Standardization cost reductions that come from economies of scale, learning effects, and
Strategy location economies

Localization Increasing profitability by customizing the firm's goods and services so that
Strategy they provide a good match to tastes and preferences in different national
 markets

Transnational Attempt to simultaneously achieve low costs through location economies,

Strategy economies of scale, and learning effects while also differentiating product
offerings across geographic markets to account for local differences and
fostering multidirectional flows of skills between different subsidiaries in the
firm's global network of operations

International Trying to create value by transferring core competencies to foreign markets

Strategy where indigenous competitors lack those compentencies

Strategy and the Firm

Stratery: the actions taken by managers to attain

Saturated: Bão hòa

Value Creation:

- The different between V (value of product) and C (the costs of producing that product)
- Two basic strategies
1. Differentiation
2. Low cost

Strategic Positioning
 - Pick a position
- Configure internal operations to support the position
- Have the right

Operation: The firm as a Value Chain

- Primary Activities
1. Involves the desgin, creation, and delivery of the product; its………

Cross-functional team: Nhóm đa chức năng, còn được gọi là nhóm đa ngành hoặc nhóm liên ngành.
Vd: Phòng ban Marketing

Incentive: khuyến khích. VD: chia cổ tức, lương tháng 13, …

Processes: quy trình.

Global Expansion, Profitability and Profit Growth

 Firms that operate internationally

1. Expand themarket for their domestic product offerings by selling those products in international
markets

2. Realize location economies by dispersing individual value creation activities to locations around
the globe where they can be performed most efficiently and effectively

3. Realize greater cost economies from experience effects by serving an expanded global market
fromacentral location, thereby reducing the costs of value creation

4. Earnagreater return by leveraging any valuable skills developed in foreign operations and
transferring them to other entities within the firm's global network of operations

 Expanding the Market: Leveraging Products and Competencies

 To increase growth, a firm can sell products or services developed at home in foreign markets
 Success depends on the type of goods and services, and the firm's core competencies (skills
within the firm that competitors cannot easily match or imitate)
 Location Economies
 Firms should locate value creation activities where economic, political, and cultural
conditons are most conductive to the performance of that activity.

Firms that successfully do this can realize location economies.

 Creating a Global Web

 Multinationals that take advantage of location economies create a global web of value
creation activities.
 Under this strategy, different stages of the value chain are dispersed to those locations
around the globe where perceived value is maximized or where the costs of value creation
are minimized.
 Barriers:
 Introducing transportation costs and trade barriers complicates this picture.
 Political and economic risks must be assessed when making location decision.
 Experience Effects continued:
 Economies of scale: reductions in unit cost achieved by producing a large volume of a
product
 Reasons:
 The ability to spreed fixed costs over a large volume
 Not able to attain efficient scale of production unless served global markets
 Bargaining power increases with suppliers which may allow economies of scale in
purchasing

Costs Pressure and Pressure for Local Responsiveness

 Pressures for Cost Reductions
 In inductries producing commodity type products that fill universal needs: needs that exist
when the tastes and preferences of consumers in different nations are simillar if not
identical
 Under what circumstances?
 When major competitors are based in low cost location
 When there is persistent excess capacity
 Where consumers are powerful and face low switching costs (switching costs: vd:
khi đang xài Iphone chuyển qua Samsung nên có thể cần đổi luôn laptop vì Apple
dùng 1 hệ sinh thái).