International Strategy Notes

04.10

INTERNATIONAL BUSINESS & GLOBAL STRATEGY

I. Globalization

➢ Bigger competition

➢ Foreign production

➢ Travel – no barriers

➢ Info exchange

➢ Convergence of tastes/needs

➢ Free trade/free money flow

➢ Technological spread/easy access

II. Globalization drivers

Technology:

➢ Internet

➢ ICT (Inf./Comm. Tech.)

➢ Transportation/Logistics

Political developments:

➢ More friendly relations

➢ Import duties

(price – average cost) x quantity = scale economy

Scale economy (bigger amount of products)/Learning curve (accumulated amount of products) – washing machine example (5 and 20 thousand a day, 5 – economy of scale, 20 – learning curve)

➢ Learning curve (connected with time/experience)

05.10

➢ Scale economies

➢ Learning effects

➢ Location economies

➢ Learning across branches (synergy effect)

Teddy Bear Case

Customers (segment): busy, adults, not physically close to recipient (distance oriented), not price sensitive, electronic money payment, internet access (key satisfaction factors)

Product: service, packaging, customer service, reliability, brand, personalization, service, safe toy concept (competitive assets)

Firm: technology, people skills, procedures, partnerships (critical assets)

High

Pressure for Cost Reduction

Low

Low High

Pressure for Local Responsiveness

Apple between standardization and international

Export:

➢ Duties

➢ Exchange rates

➢ Fast/Simple

➢ Low cost/Low risk

➢ Exploration of scale

➢ Economics + experience effects

➢ No exploration of localization

➢ Limited ability to meet expectations for localization

Licensing:

➢ No market risk (no loss with no sale)

➢ Licensee...