2. International Strategic management
Strategy is derived from the Greek word ‘Strategos’
It means ‘Generalship – the actual direction of
military force’
Strategy Mgt involves the analysis of internal
capabilities and external environment of a firm in
order to efficiently and effectively uses the
resources to meet organizational objectives.
3. Framework for
International Strategic management
International Strategic Management - Overview
External / Internal Analysis
Strategic Choice and Positioning
Leveraging Competitive Advantage
Implementing the Strategic Plan
Integration
4. Strategic Compulsions
Strategic management includes strategic
planning, implementation, and review/control of
the strategy of an organization.
The companies want survive in the today’s
business competition, they must sell their
products in the global market and enlarge their
market.
The companies face the compulsion to be global if
they want to gain the global market and more
values.
Ex: Sony, Pepsi, Microsoft…
5. Areas of Strategic Compulsions
Orientation for Globalization
Emerging E-Commerce and Internet
Culture
Cut-Throat Competition
Diversification
Active pressure groups
Motive for corporate social responsibility
and ethics
6. Standardization vs differentiation
Standardization or differentiation of the marketing
strategy are two extremes of a continuum, i.e., as
Differentiation increases Standardization
decreases, Conversely as Differentiation decreases
Standardization increases.
Different aspects of Standardization vs
differentiation
Regional Perspective (Ex. EU, NAFTA, SAARC)
Marketing Process Perspective
Marketing Components / Marketing Mix Perspective (Ex.
Google, Nokia, Microsoft)
7. Difference between
Standardization vs Differentiation
Basis of Difference Standardization Differentiation
Application in marketing
means
Companies should apply 4Ps in the
Same way in World wide.
It is supported by strong market variety by
Market individualism and uniqueness.
Reason for Application Integration Access Regional or local Conditions
Product Offered Complete standardization Altering relevant feature according to individual
or geographic
Characteristics Doesn’t have special Characters Product is differential from competitors product.
Approach Increasing Commonality of product Detailing the differentiation that exists between
products and services
Economics of scale Higher productivity and lowers the
total cost
Increasing cost of production and lower
productivity
Need Satisfy the heterogeneous needs of
the buyer
Satisfy a particular need of buyer
End Result Benefits buyer by lowering price Show sense of value to the buyer
8. Strategic options
Strategic options are creative alternative
action – oriented responses to the external
situation that an organization (or group of
organizations) faces.
A Strategic option is a set of related options
that form a potential strategy.
10. Factors affecting strategic options
External Constraints
Intra-Organizational forces and managerial
power-relations
Values and preferences and managerial
attitudes towards risk
Impact of past strategy
Time constraints
Information constraints
Competitors reaction
11. Global portfolio management
Global portfolio investment (Mgt) means a
grouping of investment assets that focuses on
securities from foreign markets rather than
domestic market.
Examples
Purchase of shares
Purchase of bonds issued by Foreign Govt.
Acquisition of assets in Foreign Country
12. Factors affecting Global Portfolio
Management
Tax rates on interest or dividends
Interest rates
Exchange rates
13. Global entry strategies
Forms of international business
1.Trade related forms of international
business
Exports – direct and indirect
Indirect Exports
Domestic Purchase
Export Houses
Piggybacking
Trading companies
14. Forms of international business
2. Manufacturing Strategies without FDI
International licensing
International franchising
International Contract manufacturing
Turnkey Projects
Management contracts
15. Forms of international business
3. Manufacturing Strategies with FDI
Joint Ventures
International strategic Alliance
Merger & Acquisition
Wholly owned subsidiaries
16. Organizational issues of I.B
There are 3 issues
First, the different elements of a firm’s
organizational architecture must be internally
consistent.
Second, the organizational architecture must
match or fit the strategy of the firm strategy
and architecture must be, consistent.
Third, the strategy and architecture must be
consistent with competitive conditions prevailing
in the firm’s market strategy , architecture and
environment must be, consistent
17. Organisational stucture
A Functional Structure
A typical Product divisional Structure
One company’s international
divisional structure
A world wide area structure
A world Wide product Divisional Structure
19. A typical Product divisional Structure
Head Quarters
Purchasing
Buying units
Manufacturing
Plants
Marketing
Sales unit
Finance
Accounting
Units
Product Line -
A
Product Line -
C
Product
Line - B
20. COMPANY’S
International DIVISIONAL STRUCTURE
Head Quarters
Domestic Division,
product line - A
Domestic Division,
product line - A
Domestic Division,
product line - A
Intl. Division
G.M
Area Line
Country -1
G.M
Product A,B and C
Country – 2
G.M
Product A,B and C
21. A world wide area structure
Head Quarters
North
American
Area
Latin
American
Area
European
Area
Middle
Eastern –
African
Area
Far East
Area
22. A world Wide product Divisional Structure
Head
Quarters
WorldWide
Product
Division A
Worldwide
Product
Division B
Area 1
(Domestic)
Area 2
(International)
Worldwide
product
Division C
26. Performance evaluation system
First, Incentive used often varies depending on the
employees and their tasks
Second, the successful execution of strategy in the
multinational firm often requires significant
cooperation between managers in different sub units
27. Contd…
Third, the incentive system used within a
multinational enterprise often have to be
adjusted to account for national differences in
institutions and culture
Finally, it is important for managers to
recognize that incentive systems can have
unintented consequences.
28. Process of performance
measurement
Establish standards of performance
Measure actual performance
Compare actual with standards
Construct and implement an action plan
Review and revise standards
29. Objectives of performance evaluation
To evaluate the economic performance of
its international performance, this is
frequently referred to as an evaluation of
the unit’s management performance.
To evaluate the unit’s management
performance.
To monitor progress towards corporate
objectives including strategic goals.
To assist efficient allocation of resources.
