1. 1
Global Strategic Management
Dr.L.Prakash Sai
Trade
Investments Information
People
Globalisation
Consumer
Convergence
Capital
Flow
IT and
Communications
Deregulation and
Trade agreements
Cross-borders
Innovation
Cross-borders
Marketing
Cross-cultural
Management
Cross-borders
Sourcing and
Production

2. 2
VARYING STAGES OF GLOBALISATION
Physical commodities
Scale-driven business goods and
services
Manufactured commodities
Labor skill/productivity-driven consumer
goods
Brandable, regulated consumer goods
Professional business services
Historically highly regulated (nationally)
industries
High interaction cost consumer goods
and services
Locally regulated or high transportation
cost good and services
Government services
 Petroleum, mineral ores, timber
 Aircraft engines, construction equipment,
semiconductors, airframes, shipping, refineries,
machine tools, telecom equipment
 Refined petroleum products, aluminum, specialty
steel, bulk pharmaceuticals, pulp, specialty
chemicals
 Food, television production, retail distribution,
funeral homes, small business services
 Construction materials, real property, education,
household services, medical care
 Civil servants, national defense
1
2
3
4
5
6
7
8
9
10
Local
Global
 Consumer electronics, personal computers,
cameras, automobiles, televisions
 Beer, shoes, luxury goods, pharmaceuticals, movie
production
 Investment banking, legal services, accounting
services, consulting services
 Personal financial services, Service providers:
telecommunications, electronic power
Historically Globalization
took place in 3 stages
Export
(Trade)
Internationalisation
(Multinational)
Global Integration
(Global)

3. 3
Local Universal
Source: Ohmae
Factors limiting universality Culture/habits Design taste Language Size/package
Technical
system
User/
application None
Example
• Fish sausage
• Root beer
• Boxer shorts
• Rice cooker
• Furniture
• Refrigerator
• Processed
food
• Word
processor
• Computer
• Textile
• Automobile
(seat size)
• Soft drinks
• Colour TV
(PAL system
in European
voltage)
• Portable
radio/cassette
player (youths
in US)
• White liqueur
(young females
in Japan)
• Watch
• Motorcycle
• Petrochem.
products
• Piano
• Money
(capital
market)
Must modify locally Could be shared globally
Degree of universality of product
GIS 27
Key
functions
Technology
Product
application
Product concept
Marketing
concept
Motivation for Competing Internationally
Gain access to
new customers
Capitalize
on core
competencies
Help
achieve
lower costs
Spread
business risk
across wider
market base
Obtain access to
valuable natural
resources

4. 4
Generic international strategies
Global
Strategy
 Response to homogeneous
consumer tastes
 Centralized production
– Maximize economies of
scale
– Recover high up-front
R&D costs
 Expose organization to
developments in key markets
 Fight competitive moves in
one country with a counter-
move in another
 Spread risk across a number
of regions
 Products tailored for
local tastes
 Produced, marketed,
and distributed
locally
 Value chains
replicated in each
region
– Higher costs
Locally Responsive
Strategy
Transnational
Strategies
 Some localization
of products
– Regional
 Also cost
advantages from
global economies
of scale
– Global
components
– Local
customization
of discernible
elements

5. 5
Competing Multinationally
- Strategic Issues
 Whether to customize a company’s offerings in each different country
market to match preferences of local buyers or offer a mostly
standardized product worldwide.
 Whether to employ essentially the same basic competitive strategy in
all countries or modify the strategy country by country.
 Where to locate a company’s production facilities, distribution centers,
and customer service operations to realize the greatest locational
advantages.
 Whether and how to efficiently transfer a company’s resource
strengths and capabilities from one country to another to secure
competitive advantage.
International vs. Global Competition
International
Competitor
Global
Competitor
Company operates in a select few
foreign countries, with modest
ambitions to expand further
Company markets products in 50 to
100 countries and is expanding
operations into additional country
markets annually

6. 6
Multi-Country Strategy
 Strategy is matched to local market needs
 Different country strategies are called for when
 Significant country-to-country differences in customers’ needs
exist
 Buyers in one country want a product different
from buyers in another country
 Host government regulations preclude
uniform global approach
 Two drawbacks:
1. Poses problems of transferring
competencies across borders
2. Works against building a unified competitive advantage
Global Strategy
 Strategy for competing is similar in all country markets
 Involves
 Coordinating strategic moves globally
 Selling in many, if not all, nations where a significant market exists
 Works best when products and buyer requirements are similar from
country to country
 Competitive conditions across country markets are strongly linked
 Many of same rivals compete in many of the same country markets
 A true international market exists
 A firm’s competitive position in one country is affected by its position in
other countries
 Competitive advantage is based on a firm’s world-wide operations and
overall global standing

7. 7
Multi-country Strategy vs. Global Strategy
Design Production Marketing
OTIS UK
Service Design Production Marketing
OTIS GERMANY
Service
Design Production Marketing
OTIS FRANCE
Service Design Production Marketing
OTIS ITALY
Service
Compete against
German and multinational
competitors
For
the German market
UK and multinational
competitors
For
the UK market
Compete against
French and multinational
competitors
For
the French market
Compete against
Italian and multinational
competitors
For
the Italian market
Compete against
Design Production Marketing
OTIS UK
ServiceDesign Production Marketing
OTIS UK
Service Design Production Marketing
OTIS GERMANY
ServiceDesign Production Marketing
OTIS GERMANY
Service
Design Production Marketing
OTIS FRANCE
ServiceDesign Production Marketing
OTIS FRANCE
Service Design Production Marketing
OTIS ITALY
ServiceDesign Production Marketing
OTIS ITALY
Service
Compete against
German and multinational
competitors
For
the German market
UK and multinational
competitors
For
the UK market
Compete against
French and multinational
competitors
For
the French market
Compete against
Italian and multinational
competitors
For
the Italian market
Compete against
A Multinational Competitive Configuration

8. 8
OTIS UK
Design
Production
Marketing
OTIS GERMANY
Service
OTIS FRANCE
MarketingMarketing
Marketing Service
Service Service
Design
Design
Production
Production
Production
OTIS ITALY
OTIS
EUROPE
Local market
Local market
Local market Local market
OTIS UK
DesignDesign
ProductionProduction
MarketingMarketing
OTIS GERMANY
ServiceService
OTIS FRANCE
MarketingMarketingMarketingMarketing
MarketingMarketing ServiceService
ServiceService ServiceService
DesignDesign
DesignDesign
ProductionProduction
ProductionProduction
ProductionProduction
OTIS ITALY
OTIS
EUROPE
Local market
Local market
Local market Local market
A Global Competitive Configuration
Competing in Foreign Markets
- Strategic Options
 Exporting
 Licensing
 Franchising strategy
 Multi-country strategy
 Global strategy
 Strategic alliances or joint ventures

9. 9
Trade Blocs
European Union (EU)
African Union (AU)
Union of South American Nations (UNASUR)
Caribbean Community (CARICOM)
Central American Integration System (SICA)
Arab League (AL)
Central American Common Market (CACM)
European Free Trade Association (EFTA)
Eurasian Economic Community (EAEC)
Association of Southeast Asian Nations (ASEAN)
Central European Free Trade Agreement (CEFTA)
North American Free Trade Agreement (NAFTA)
South Asian Association for Regional Cooperation (SAARC)
Pacific Islands Forum (PIF)
Thank You