International Business Strategy and Organization PDF

CHAPTER FIVE INTERNATIONAL STRATEGY AND ORGANIZATION Copyright © 2016 Pearson Education, Inc. Learning Objectives 1. Explain the company analysis techniques that precede strategy selection. 2. Describe the various strategies that companies use to reach their goals. 3. Outline...

CHAPTER FIVE INTERNATIONAL STRATEGY AND ORGANIZATION Copyright © 2016 Pearson Education, Inc. Learning Objectives 1. Explain the company analysis techniques that precede strategy selection. 2. Describe the various strategies that companies use to reach their goals. 3. Outline the key issues behind the selection of organizational structure. Copyright © 2016 Pearson Education, Inc. Planning and Strategy Process of identifying and selecting an organization’s Planning objectives and deciding how the organization will achieve those objectives Set of planned actions taken by Strategy managers to help a company meet its objectives Copyright © 2016 Pearson Education, Inc. Company Analysis Company Mission and Goals ❑Mission Statement: Written statement of why a company exists and what it plans to accomplish ❑Mission statements often spell out how a company’s operations affect its stakeholders ❑Stakeholders: All parties, ranging from suppliers and employees to stockholders and consumers, who are affected by a company’s activities Copyright © 2016 Pearson Education, Inc. Core Competency and Value Creation Special ability of a company that Core competitors find extremely difficult or Competency impossible to equal Process of dividing a company’s Value-Chain activities into primary and support Analysis activities and identifying those that create value for customers Copyright © 2016 Pearson Education, Inc. Value-Chain Analysis Copyright © 2016 Pearson Education, Inc. Strategy Formulation Adapting products and their marketing Multinational strategies in each national market to suit Strategy local preferences Global Offering the same products using the same Strategy marketing strategy in all national markets Copyright © 2016 Pearson Education, Inc. Three Levels of Strategy ❑ Corporate strategy ❑ Business strategy ❑ Department strategy Copyright © 2016 Pearson Education, Inc. Corporate-Level Strategies Strategy designed to increase the scale (size Growth of activities) or scope (kinds of activities) of a Strategy corporation’s operations Retrenchment Strategy designed to reduce the scale or scope Strategy of a corporation’s businesses Strategy designed to protect against change Stability and used by corporations to avoid either Strategy growth or cuts Copyright © 2016 Pearson Education, Inc. Business-Level Strategies Low-Cost Strategy in which a company exploits Leadership economies of scale to have the lowest cost Strategy structure of any competitor in its industry Strategy in which a company designs its Differentiation products to be perceived as unique by buyers Strategy throughout its industry Strategy in which a company focuses on serving the needs of a narrowly defined market Focus Strategy segment by being the low-cost leader, by differentiating its product, or both. Copyright © 2016 Pearson Education, Inc. Department-Level Strategies Corporate- Department- and Business- Level Level Strategies Objectives Copyright © 2016 Pearson Education, Inc. Issues of Organizational Structure Centralization versus Decentralization ❑Organizational Structure: Way in which a company divides its activities among separate units and coordinates activities among those units ❑Centralization ❑Coordination is principal ❑Financial control and cost savings ❑Decentralization ❑Improves local responsive ❑Increases accountability Copyright © 2016 Pearson Education, Inc. Issues of Organizational Structure Coordination and flexibility ❑Structure and Coordination ❑Design an appropriate organizational structure ❑Defines areas of responsibility and chains of command ❑Structure and Flexibility ❑Organizational structure is often modified to suit changes Copyright © 2016 Pearson Education, Inc. Copyright © 2016 Pearson Education, Inc.