Six More Weeks of Winter

Globalization
 Are customers culturally/nationally diverse?
 Large percent of foreign revenue?
 Large percent of foreign assets?
 Are competitors global?
 Are owners, partners, suppliers global?
 How big is globalization?
 Who’s doing it? Why?
 What are companies actually doing? Why?
 Who is successful? Why?
 Reasons to Go International
Proactive Reasons Reactive Reasons
 Exploit factor-cost  Competitive pressure
differences across  Overcapacity
countries  Declining domestic
 Unique product
sales
 Technological advantage 
Saturated home market
 Economies of scale  Under attack from
 Growing foreign markets foreign rivals
 Exclusive information
 Attack rivals on home turf
Going Global: Effect on Bottom Line

ROI

% Foreign Sales/
Total Sales
 FDI in the U.S.
“The New American Challenge”
 Attractiveness test?
 Performance test?
 Diagnosis of barriers to competitiveness
– Scale
– Entry mode
– Competitive response
 FDI Modes and Choices
Scale Level
[Activity Type] None
Sales
Distribution
Full Scale

Partner WOS None

Other Local
Govt.
Type MNC Firm
Ownership

Majority

Minority

None
Factors/Issues of Globalization

Economic

Political Cultural

y v e
log t iti Legal
no p e
c h m
Te Co
Challenge to Global Managers

Vision,
Purpose,
Strategy & & Goals
Intelligence
Cultural
Interpreter
Learning,
Cross-Pollination,
Structure & & Change
Configuration
 Competitive Forces
 First-mover advantage eroding via local
competition in foreign markets
– Great Lakes’ Juicee and MingLang juice in China
– Wal-Mart/Seiyu stores in Japan
 Market share dominance in U.S. under
continuous attack by foreign rivals located here
– Toyota, Honda, Nissan, Mercedes, BMW
– Nestles, Grand Metropolitan, Unilever
 “Made in America…Who’s the Enemy?”