1. Analytical Frameworks
of Global Strategy
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 1
nrvmba,email:1966patel@gmail.com

2. First key framework
The global competitive
strategy “Star Analysis”
• Will use in our case discussions and in our case
analysis
• The “Star Analysis” provides a way to organize
our thoughts and knowledge about geography
and international business
• The “Star Analysis” provides information for the
international business manager to develop a
competitive strategy
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 2
nrvmba,email:1966patel@gmail.c

3. Global Competitive Strategy
The international business firm’s competitive
advantage depends on five major drivers:
• Home country
• Supplier countries
• Customer countries
• Partner countries
• Competitor countries
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 3
nrvmba,email:1966patel@gmail.c

4. The global competitive
strategy star
Home
country
Supplier Customer
countries countries
International
business
Partner Competitor
countries countries
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 4
nrvmba,email:1966patel@gmail.c

5. The international business
“Star Analysis”
Gather country Information needed
Star
data from to design
Analysis
global mosaic competitive
strategy
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 5
nrvmba,email:1966patel@gmail.c

6. Global Competitive Strategy
Home country features – headquarters
• Company globalization – Launching pad
• Company history and culture
• Managers’ background
• Brand nationality
• Corporate governance
• Home market
• Political, legal, regulatory climate
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 6
nrvmba,email:1966patel@gmail.c

7. Global Competitive Strategy
Supplier country features –
production and procurement
• Worker wages and productivity
• Technology
• Finance capital
• Factor supplies
• Supplier firms
• Political, legal, regulatory climate
• Operating costs/risks
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 7
nrvmba,email:1966patel@gmail.c

8. Global Competitive Strategy
Customer country features – distribution
and sales
• Customer preferences
• Elasticity of demand
• Income per capita and income distribution
• Customer knowledge
• Distribution infrastructure
• Society and culture
• Political, legal and regulatory climate
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 8
nrvmba,email:1966patel@gmail.c

9. Global Competitive Strategy
Partner countries – Demand-side and
supply-side complements
• Complementary products
• Complementary technology
• Complementary capabilities
• Market knowledge
• Political, legal, regulatory climate
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 9
nrvmba,email:1966patel@gmail.c

10. Global Competitive Strategy
Competitor countries
• Home, supplier, customer, and partner
countries of competitors
• Global and local competitors
• Customer and supplier bypass competition
• Political, legal and regulatory climate –
trade agreements, home-country policies
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 10
nrvmba,email:1966patel@gmail.c

11. Second key framework:
Global added value
• Global value created by global business:
Gains from trade minus Costs of trade
• Global added value is competitive advantage
of a global business
• Global competitive strategy is means to create
and capture global added value
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 11
nrvmba,email:1966patel@gmail.c

12. Global added value
Five major gains from trade:
• Preference for product variety and
production economies of scale
• Comparative advantage: Productivity and
wages
• Comparative availability of factors of
production
• Differences in preferences and endowments
• 07/05/12 03:47 AM
Differences in innovation and technology
By Dr.Rajesh Patel,Director, 12
nrvmba,email:1966patel@gmail.c

13. International business profits
from gains from trade:
• Best target countries to
serve customers
• Best countries to deal with
suppliers and partners
• Best combination of
international transactions
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 13
nrvmba,email:1966patel@gmail.c

14. Costs of trade
• Global business cannot just maximize
gains from trade
• Must adjust strategy to optimize gains
minus costs
• Adjust to sticky borders
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 14
nrvmba,email:1966patel@gmail.c

15. Global business creates value
U.S. multinational corporations home country
added value (contribution to GDP) $ 2 tr.
U.S. multinational corporations’ foreign affiliates
added value to host country $ 0.7 tr.
Total $ 2.7 tr.
bea.gov international economic accounts
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 15
nrvmba,email:1966patel@gmail.c

16. Third key framework
“G5” competitive strategies:
• Global platform strategy
• Global network strategy
• Global intermediary strategy
• Global entrepreneur strategy
• Global investment strategy
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 16
nrvmba,email:1966patel@gmail.c

17. Global Competitive Strategy
• Location, location, location – key role of
geography
• Where to produce and find suppliers?
• Where to target customer markets?
• Where to find best partners
• Where are competitors coming from,
serving and seeking suppliers
Global competitive strategy – integrate
economic and geographic forces for
competitive advantage
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 17
nrvmba,email:1966patel@gmail.c

18. Thank you!
07/05/12 03:47 AM By Dr.Rajesh Patel,Director, 18
nrvmba,email:1966patel@gmail.c