Arief Budiman, IMSMEs
International Competitive Strategy
Strategi berkaitan dengan keputusan “besar” yang dihadapi organisasi dalam melakukan bisnis, berkaitan dengan perilaku yang konsisten, dan seharusnya mampu menciptakan keunggulan kompetitif perusahaan
Strategi sangat penting untuk menentukan kesuksesan organisasi, sehingga inilah yang menjadi alasan mengapa mempelajari strategi menjadi amat bermanfaat dan menjanjikan
MENGAPA MEMPELAJARI STRATEGI:Definisi dan Alasan
Coca-Cola in Chinese: “bite the wax tadpole”
Coca-Cola 30 liter bottle??
U.S. carmakers’ left-hand drive cars
“Forced” Standardization
Effective Standardization
Coca-Cola’s “transnational polar
bears”McDonald’s “Big Mac”
Barbie is 41 years old
Sold in 130 countries
National adaptations:
•Physical features•Costumes•Activity setsStandardized physique:
•Scaled to 6’2”, 110 lbs.•38-18-28
Barbie: The “All-American” Girl Goes Overseas
McMutton Pie in Australia
Wendy’s shrimp sandwich in Japan
Campbell’s non-condensed soups in the UK
Coca-Cola’s 175 ml containers in Japan
Effective Adaptation
Cadillac Seville 1997 Asian edition
Right-hand drive, shorter seats, closer pedals, 10” shorter, retractable mirrors
The way firms make choices about acquiring and using scarce resources in order to achieve their international objectives
Involves decisions that deal with all the various functions, products and regional unit activities of a company
International Strategy
Porter’s Five Forces in Competitive Advantage
Firms that operate internationally can
1. Expand the market for their domestic product offerings by selling those products in international markets• Success depends on the type of goods and services,
and the firm’s core competencies (skills within the firm that competitors cannot easily match or imitate)
2. Realize location economies by dispersing individual value creation activities to locations around the globe where they can be performed most efficiently and effectively• In order to realize location economies, firms should
locate value creation activities where economic, political, and cultural conditions are most conducive to the performance of that activity
Global Expansion, Profitability and Profit Growth
3. Realize greater cost economies from experience effects by serving an expanded global market from a central location, thereby reducing the costs of value creation• The experience curve refers to the systematic
reductions in production costs that have been observed to occur over the life of a product
• Learning effects are cost savings that come from learning by doing
• Economies of scale refer to the reductions in unit cost achieved by producing a large volume of a product
4. Earn a greater return by leveraging any valuable skills developed in foreign operations and transferring them to other entities within the firm’s global network of operations
Global Expansion, Profitability and Profit Growth
To create a sustainable competitive advantage, a company tries to develop skills that
•Create value for customers•Are rare•Are difficult to imitate or substitute for•Are organized in a way that the company can fully exploit
Global Strategic Planning
Provides a means for top management to• Identify opportunities and threats
• Formulate strategies to handle them
• Stipulate how to finance and manage the strategies’ implementation
• Provides consistency of action
• Provides a thorough, systematic foundation for making decisions
Global Strategic Planning Process
The process of strategic planning provides a formal structure in which managers
Global Planning Process
Situational analysis• Forecast• Value Chain Analysis• Who are the target customers?• What value do we deliver?• How will customer value be created?
Analyze Corporate Controllable Variables
The Value Chain by Porter
ANALISIS RANTAI NILAI PORTER
Value Chain Sub-functions Infrastructure
Technology Development
Procurement
Human Resource Management
InboundLogistics Operations
OutboundLogistics Marketing Service
ProfitMargin
Advert. Pricing Distrib. Packaging
13-18
Cost and Adaptation Pressures and Their Implications for International Strategies
Used when companies typically centralize product development functions in their home country• Then transferred to foreign markets in order to capture additional value
• Microsoft, McDonald’s
13-19
Home Replication Strategy
Home Replication/Export Strategy(same as Export entry mode)
U.S.
Germany
Mexico
Malaysia
Used when there is strong pressure for adaptation to local market• Decision making decentralized to allow for quick change• Increases cost structure• Too much adaptation may take away from product• Cost and complexity of coordination can be substantial• Schneider Electric
13-21
Multidomestic Strategy
Multidomestic Strategy
U.S.
Germany
Mexico
Malaysia
Entry?
Used when a company faces strong pressure to reduce costs and limited pressure to adapt products for local markets• Strategy and decision making centralized• Company offers standardized products and services• Value chain activities in only one or a few areas• Results in limited ability to adjust to meet customer needs and higher transportation costs• Intel, Boeing
13-23
Global Strategy
Global Strategy(Textbook Variety)
U.S.
Germany
Mexico
MalaysiaEntry?
Used when a company confronts pressures for both cost effectiveness and local adaptation• Company locations based on where most beneficial for each activity•Upstream value chain activities will be more centralized•Downstream activities will be more decentralized
• Achieving an optimal balance is challenging• Strategic decisions, structures and systems will be complex
13-25
Transnational Strategy
Transnational Strategy (v.1)
U.S.
Germany
Mexico
MalaysiaEntry?
Transnational Strategy (v.2)
U.S.
Germany
Mexico
Malaysia
Entry?
Transnational Strategy (v.3)
U.S.Germany
Mexico
Malaysia
Engines
Final Assembly
Trim, seats,glass
Steel
Entry?
Global Entry Strategy
It depends on:
•Vision•Attitude toward risk•How much investment capital is available•How much control is desired
Which strategy should be used?
A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation• Patent• Trade secret• Brand name• Product formulations
Licensing
Provides additional profitability with little initial investment
Provides method of circumventing tariffs, quotas, and other export barriers
Attractive ROI
Low costs to implement
Advantages to Licensing
Limited participation
Returns may be lost
Lack of control
Licensee may become competitor
Licensee may exploit company resources
Disadvantages to Licensing
Contract manufacturing• Company provides technical specifications to a
subcontractor or local manufacturer• Allows company to specialize in product design while
contractors accept responsibility for manufacturing facilities
Franchising• Contract between a parent company-franchisor and a
franchisee that allows the franchisee to operate a business developed by the franchisor in return for a fee and adherence to franchise-wide policies
Special Licensing Arrangements
Will local consumers buy your product? How tough is the local competition? Does the government respect trademark and franchiser rights? Can your profits be easily repatriated? Can you buy all the supplies you need locally? Is commercial space available and are rents affordable? Are your local partners financially sound and do they understand the basics of franchising?
Franchising Questions
Partial or full ownership of operations outside of home country
•Foreign Direct InvestmentForms• Joint ventures
• Minority or majority equity stakes
• Outright acquisition
Foreign Direct Investment
Entry strategy for a single target country in which the partners share ownership of a newly-created business entity
Joint Ventures
Disadvantages• Requires more investment
than a licensing agreement• Must share rewards as well
as risks• Requires strong
coordination• Potential for conflict among
partners• Partner may become a
competitor
Advantages• Allows for sharing of risk
(both financial and political)• Provides opportunity to
learn new environment• Provides opportunity to
achieve synergy by combining strengths of partners• May be the only way to
enter market given barriers to entry
Joint Ventures
Start-up of new operations• Greenfield operations or
• Greenfield investment
Merger with an existing enterprise
Acquisition of an existing enterprise
Investment via Ownership or Equity Stake
Possible terms:• Collaborative agreements
• Strategic alliances
• Strategic international alliances
• Global strategic partnerships
Global Strategic Partnerships