IB - Grad - Chapter 11 - Strategy and Organization in the Int'l Firm

Culturally diverse teams have three valuable roles:

SUPERIOR ORGANIZATIONAL PROCESSES ◘ Create a global view inside the firm while remaining in touch with local realities. ◘ Generate creative ideas and make fully informed decisions about the firm's global operations. ◘ Ensure team decisions are implemented throughout the firm's global operations.

2 types of strategies for int'l bus

differentiation and low cost leadership

Just Notes

(Just Notes) SUPERIOR ORGANIZATIONAL PROCESSES GLOBAL STRATEGY Advantages of global strategy ■ Provides substantial ability to respond to worldwide opportunities. It creates economies of scale, which result in lower operational costs. ■ It increases opportunities for cross-national learning and cross-fertilization of the firm's knowledge among all its subsidiaries. ■ Product/process quality improvement — by simplifying manufacturing and other processes ■ High-quality products give rise to global brand recognition, increased consumer preference, and efficient international marketing programs. Global strategy is easier in the current environment due to: ■ Converging buyer characteristics worldwide ■ Growing acceptance of global brands ■ Increased diffusion of uniform technology (especially in industrial markets) ■ Spread of international collaborative ventures, ■ Integration effects of globalization and advanced communications technologies Disadvantages of global strategy ■ Challenging for management to closely coordinate the activities of widely dispersed international operations ■ The firm must maintain ongoing communications between headquarters and its subsidiaries as well as between the subsidiaries. ■ May result in a loss of responsiveness and flexibility in local markets

Just Notes

(Just Notes) - International Strategies Chapter 11 yesterday, I forgot to include a figure of Bartlett and Ghoshal (I think I might have called it just Ghoshal in Ch. 11) three major international strategies (they include a fourth international strategy simply called "international" which doesn't offer much local customization/responsiveness nor does it put much emphasis on global integration and economies of scale. So on a matrix we have emphasis on the local market (responsiveness and sensitivity to local market needs) on one axis and we have emphasis on global integration and building global economies of scale and ultra-efficiency/cost control. (look at in notes) the company basically just does whatever they did at home overseas. B&G call this simply "international" strategy. Maybe they just export or perhaps they franchise or license their technology "as is" overseas. They are simply expanding what they did at home into new markets without much emphasis on either of the pressures. In my travels I have noticed the same huge wind turbines capturing wind energy worldwide. multi-domestic calls for huge emphasis on local responsiveness while global strategy calls for huge emphasis on global integration and cost savings from global operations. The final and most difficult strategy, transnational, emphasizes both and there are relatively few companies that manage to do both

just notes

(just notes) several different steps in the strategy process... When we deal with strategy, we are trying to get a good understanding of the trends and influences going on in the "external environment" of the firm. I often tell students and clients that we need to always be doing an "environmental scan," because the things going on outside the firm (societal trends, economic conditions, GLOBAL PANDEMICS, technological changes, legal and regulatory, cultural changes, etc.) affect you as much as those things you control within the firm (resources, assets, capabilities, processes, technology, design, skills, etc.). We want a sound "interface" between what we do extremely well as a company and the things being demanded by the external environment (mainly the customer base but we must also consider other stakeholders and external forces as well).

Differentiation strategy

2 types of strategies for int'l bus finding those differences that are greatly valued by the custom and then really focusing the company on making the BEST product at fitting the specific needs and desires of the customer base. Differentiated items normally cost the customer more because there are especially pleasing and noticeable differences (quality, style, convenience, packaging, durability, availability, fashion, service, customizability, and probably 50 other possibilities) that are especially important to the customer and worth paying more to obtain. The company builds value and therefore margin by driving up what the customer is willing to pay for the really awesome product or service.

a low cost leadership strategy

2 types of strategies for int'l bus where the company uses huge volume and scale, efficient product design, efficient manufacturing techniques, process technology, and a wide array of other resources to really drive down the COST of producing the product or service. It doesn't necessarily mean they have to charge the lowest price. In many cases, this product or service isn't the absolute "best" (however that is defined) but it is very good and the cost advantages are passed along usually in the form of an affordable price. Really, all companies should focus on cost, but the low cost leader has some major strategic advantages based on how hard they work to reduce costs but yet produce a reasonable player in the market.

IKEA's STRATEGY

2 types of strategies for int'l bus (extra) transnational or global in that they combine global efficiencies with local, cultural, and style awareness IKEA successfully combines global operational efficiencies in design, production, and training with local responsiveness and design/style awareness by delegating autonomy and decision-making regarding product markets to local managers. IKEA's experience internationally is becoming more universal for other firms as they recognize and struggle with the need to be efficient from a cost standpoint, and also responsive or differentiated to customers, who demand increased value making IKEA the world's largest furniture retailer Philosophy- offer high-quality, well-designed furnishings at low prices. Its functional, utilitarian, and space-saving pieces have a distinctive Scandinavian style, which the customer assembles at home. Kamprad family- still owns IKEA, with corporate offices in the Netherlands, Sweden, and Belgium. Product development, purchasing, and warehousing are concentrated in Sweden 90% of the product line is identical worldwide. Strategy- Targeting a global customer segment allows IKEA to offer standardized products at uniform prices, leveraging global economies by consolidating worldwide design, purchasing, and manufacturing. It differentiates itself from niche furniture makers that serve fragmented markets

"niche focus" strategy

2 types of strategies for int'l bus (extra) where there is a small group or segment of the customer base that has fairly specific needs that are very efficiently and effectively met by a smaller group of players in the industry. For example, often there is an "ultra high end" segment of a market with brands you may have never heard of unless you had a very large budget. Most people outfit their kitchens/homes with perfectly good appliance brands like Frigidaire, LG, KitchenAid. Higher budget = real luxury niche brands like Thermador, Wolf, Fisher When you go shop for a car, most people shop brands like Chevrolet, Toyota, Honda, or Kia, but there is a small group who shop brands like Lamborghini, Ferrari, and even Bugatti. But niches aren't always high end or heavy duty. The key is that we are going after a smaller segment by limiting the scope of what we are trying to do.

centralization and decentralization; Global integration; Local responsiveness

APPROPRIATE ORGANIZATIONAL STRUCTURE The _________ and ______________ fundamental question- how much decision-making responsibility should a firm retain at headquarters and how much should it delegate to foreign subsidiaries/affiliates? ___________ - A centralized approach gives headquarters considerable authority and control over the firm's activities worldwide ___________ - A decentralized approach means substantial autonomy and decision-making authority are delegated to the firm's subsidiaries around the world. In each firm, management tends to devise a structure consistent with its local vision and strategies.

Centralized; Centralized-Decentralized; Joint; Decentralized; Myopia

APPROPRIATE ORGANIZATIONAL STRUCTURE ___________ - The larger the financial outlay or the riskier the anticipated result, the more headquarters will contribute to decision making. Example- Decisions about developing new products or building factories abroad tend to be centralized to headquarters. ___________ - Decisions that affect two or more countries are best left to headquarters managers who have a regional or global perspective. ___________ - Decisions about local products that will be sold in only one country, however, are typically the joint responsibility of corporate and country-level managers, with the latter taking the lead role. ___________ - Decisions on day-to-day human resource issues in individual subsidiaries are generally left to local managers. __________ - Highly centralized, top-down decision making ignores subsidiary managers' intimate knowledge of host countries. Highly decentralized, bottom-up decision making by autonomous subsidiary managers ignores the big-picture knowledge of headquarters managers and fails to integrate strategies across countries and regions. Example- Coca-Cola ◘ Centralized- Coca-Cola headquarters provides global brand support and broad marketing guidance to its bottlers in individual countries. ◘ Decentralized- The local bottler assumes responsibility for such activities as local customer research, local sales promotion, retailer support, and meeting local government requirements. "Think globally, act locally," oversimplifies the true complexities of today's global competition; Think globally and locally and act appropriately better describes current MNE realities.

Efficiency

Developing Global, Sustainable, Competitive Advantage depends on three strategic objectives: The firm must build _________ international value chains refers to lowering the cost of the firm's operations and activities on a global scale. For example, automotive companies strive for scale economies by concentrating manufacturing and sourcing activities in a limited number of locations. Toyota manufactures in low-cost countries such as China and in major markets like the U.S.

Learning

Developing Global, Sustainable, Competitive Advantage depends on three strategic objectives: The firm must create the ability to ________from operating in international environments and exploit this learning on a worldwide basis. The diversity of the international environment presents the internationalizing firm with unique ________ opportunities. By operating in various countries, an MNE can acquire new technical and managerial know-how, new product ideas, improved R&D capabilities, partnering skills, and survival capabilities in unfamiliar environments.

Flexibility

Developing Global, Sustainable, Competitive Advantage depends on three strategic objectives: The firm must develop worldwide ________ to accommodate diverse country-specific risks and opportunities. The diversity and volatility of international environments are especially challenging for managers, making the firm's ability to tap local resources and exploit local opportunities critical. For example independent suppliers/distributors versus direct investment decisions. Adaptation of marketing and human resource practices to suit unique country conditions.

Developing Global, Sustainable, Competitive Advantage depends on three strategic objectives:

Efficiency Flexibility Learning

global strategy

Other companies take advantage of the entire world as their market and use this incredible scale and volume to build "global economies of scale" and cost advantages They may not try to meet the unique and specific needs of each market individually and specifically, but their huge global scale allows them to offer a reasonable product at a very low price (and at a very nice profit)

Just Notes

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS (Just Notes) GLOBAL MATRIX STRUCTURE Disadvantages of matrix structure: ■ The chain of command from superiors to subordinates can become muddled. ■ Employees may receive contradictory instructions from multiple managers, who may be located far apart and come from different cultural and business backgrounds. ■ The matrix structure can waste managerial time and result in conflicts and organizational chaos. ■ Potential limitations emerge as the firm's international operations become more complex over time. ■ Many firms that experimented with the global matrix structure eventually returned to simpler organizational arrangements Countertrade is basically accepting commodities or other items in payment (other than currency). When we export, we are making the product here and simply selling it overseas (with very little involvement by our firm over there). Global sourcing is simply using another company to manufacture or produce your product, service, or some input. If we collaborate or team up with another company (to benefit from some form of expertise from them), we are using a "moderate-control" strategy. We can sell our technology or our business system to them (licensing or franchising). Technology firms license their product technology to foreign partners. On the right side of the spectrum, we are following what I call an "all-in or full commitment" strategy where we see the opportunity as so great that we "do it ourselves" and go "full-bore" into a country with investment and full control.

EXPORT DEPARTMENT

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS (one answer) For manufacturing firms, ________ is usually the first foreign market entry strategy. Initially, the firm will channel ____ through an outside intermediary, such as a foreign distributor. When _______ sales reach a substantial proportion of total sales, the firm will usually establish a separate ________ department. This approach is most closely associated with home replication strategy

INTERNATIONAL DIVISION STRUCTURE

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS An organizational design with a separate unit within the firm dedicated to managing its international operations The decision to create a separate division is usually accompanied by a significant shift in resource allocation and an increased focus on international business. Division managers oversee the development and maintenance of relationships with foreign suppliers, distributors, and other value chain partners. Over time, the division typically undertakes more advanced internationalization options, such as licensing and small-scale foreign direct investment. Evolution from home replication strategy to multidomestic or global strategies

GEOGRAPHIC PRODUCT STRUCTURE [Centralized Structure]

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS Global Strategy The firm organizes its international operations by major product line. Each product division is responsible for producing and marketing a specific group of products worldwide Each international product division operates as a stand-alone profit center with substantial autonomy- the goal being a high degree of worldwide coordination within each product category. Increased coordination facilitates economies of scale and sharing of technology and product knowledge among the firm's operations worldwide.

GEOGRAPHIC AREA STRUCTURE [Decentralized Structure]

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS Multidomestic Strategy An organizational design in which management and control are decentralized to the level of individual geographic regions, where local managers are responsible for operations within their region Firms that organize their operations geographically tend to market products that are relatively standardized across entire regions or groupings of countries. The structure is decentralized because top management delegates local operations to regional managers responsible for each geographic area. Firms that use the geographic area approach are often in mature industries with narrow product lines, such as the pharmaceutical, food, automotive, cosmetics, and beverage industries. Example- Nestlé organizes itself into a South America division, a North America division, an Asia division, etc. Nestlé treats all geographic locations, including the domestic market, as equals.

FUNCTIONAL STRUCTURE [Centralized Structure]

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS The firm's international operations is organized by functional activities, such as production and marketing. Example- Oil companies: Organize their worldwide operations along two major functional lines - production and marketing of petroleum products

GLOBAL MATRIX STRUCTURE [Closely associated with Transnational]

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS This structure is a blend of the geographic area, product, and functional structures, leveraging the global efficiencies of a global strategy and the local responsiveness of a multidomestic strategy It aims to reap the advantages of each while minimizing their disadvantages. Both global efficiencies and local responsiveness and a combination of geographic area, product, and functional structures Firms develop a dual reporting system in which, for example, an employee in a foreign subsidiary reports to two managers - the local subsidiary general manager and the corporate product division manager. Example- Unilever (www.unilever.com) ◘ The $62 billion European producer of food, beverage, household, and personal care products owns global brands such as Lipton tea, Hellman's spreads, Slimfast, and Dove products and needs to balance global integration with local adaptation. ◘ Local adaptation is necessary for such marketing issues as retail distribution strategy, labeling requirements, and consumer incentives. But they must take advantage of global efficiency is manufacturing and other activities.

(just notes)

SUPERIOR ORGANIZATIONAL PROCESSES A guy named Ted Leavitt from Harvard predicted about 30 years ago that by now most worldwide cultures would be very similar and that the same products and services would appeal to countries worldwide. While there has been a great deal of convergence with the American culture having an inordinate amount of global influence, we are still a long way from Leavitt's vision of a similar worldwide culture (with similar worldwide demands).

Globalizing mechanisms

SUPERIOR ORGANIZATIONAL PROCESSES Common processes provide interconnectedness within the MNE network and allow for meaningful cross-fertilization and knowledge. They include global teams and global information systems. A global team is an internationally distributed group of employees charged with a specific problem-solving or best practice mandate that affects the entire organization. Successful teams are flexible, responsive, and innovative

GLOBAL STRATEGY

SUPERIOR ORGANIZATIONAL PROCESSES Headquarters seeks substantial control over its country operations in order to minimize redundancy and achieve maximum efficiency, learning, and integration worldwide. Through universal products/services, central coordination and control of international operations is emphasized. Activities such as R&D and manufacturing are centralized at headquarters, and management tends to view the world as one large marketplace Samsung Electronics - Leading manufacturer of consumer electronics, responsible for about 1/5 of South Korea's total exports. Once a manufacturer of home appliances in South Korea, the firm now manages a wide collection of global activities from company headquarters. Integrated value chains mean that Samsung's most advanced expertise in consumer electronics, technology, production, and distribution are continuously shared among the firm's business units worldwide The internal electronics are identical wherever the product is sold; internal software is varied to suit differing national preferences. Samsung does much of its manufacturing in China, Brazil, and other emerging markets to keep costs low. In total, Samsung sells its smartphones in more than 120 countries

MULTIDOMESTIC STRATEGY (also called multi-local strategy)

SUPERIOR ORGANIZATIONAL PROCESSES More advanced approach. Firm internationalization where headquarters delegates considerable autonomy to each country manager, allowing him or her to operate independently and pursue local responsiveness. Subsidiaries and affiliates are developed in each of numerous foreign markets. Cognizant of country differences, subsidiaries uniquely adapt products/services and management practices to suit country needs. Country managers are often nationals of the host country and tend to function independently with little incentive to share knowledge and experience with managers in other countries. Nestle' does a great job of customizing its products, approaches, and messages in each of its international market. The advantage here is that there is great decentralization and pushing authority down to the local level, where there is great focus on the individual market. The obvious disadvantage is that this focus and customization costs money and doesn't allow the multinational company to benefit as much from scale and multiple markets. GM actually sells different models in different markets.

Multidomestic; Global

SUPERIOR ORGANIZATIONAL PROCESSES Two types of strategies: Source Bartlett and Ghoshal (1989) ________ - competition takes place on a country-by-country basis; products/services tailored to the local markets- e.g. processed food, consumer products, fashion, retailing, and publishing - adapting to the culture, laws, income levels, and other specific characteristics of each country. _________ - competition takes place on a regional or worldwide basis, e.g. aerospace, automobiles, metals, computers, chemicals, industrial equipment, earth-moving machinery, and photography.

Local responsiveness; Local responsiveness justification

SUPERIOR ORGANIZATIONAL PROCESSES _______ - involves meeting specific buyer needs in individual countries, responding to specific conditions in local markets, and managing diverse opportunities and risks on a country-by-country basis. Adjust the firm's practices to suit distinctive needs and conditions in each country. Adapt to local customer requirements, language, culture, regulation, the competitive environment, and the local distribution structure. _________ - Countries, cultures, and markets demand unique products/services. Such demand differences must be addressed through customized products/services. the best firms are able to maximize the global cost advantages in the "earlier" parts of the value chain (sourcing, logistics, warehousing, design, manufacturing, etc.) and then benefitting from customization and focus in the "later" parts of the value chain (advertising, sales, retail management, customer relations, service, etc.).

HOME REPLICATION STRATEGY

SUPERIOR ORGANIZATIONAL PROCESSES ________ strategy - Expanding abroad is viewed as an opportunity to generate additional sales for domestic product lines. Firm designs products with domestic customers in mind and seeks international business in order to extend product life cycles and replicate home-market success. Little useful knowledge flows from the foreign operations. Strategy works best if commodities- raw materials and basic parts- are used because they do not require a sophisticated internationalization strategy. Also successful when the firm only targets markets similar to the home market. Little control over how its products are marketed abroad. This strategy offers few competitive advantages in foreign markets. Thus, it is usually an initial, temporary strategy rather than a long-term strategy. The implication is that this is a flawed or unsophisticated approach that only views the foreign market as an extension of the domestic market. many fashion houses and fragrance companies sell the same products worldwide, Starbucks sells basically the same coffees and teas worldwide, Netflix has pretty much the same service worldwide, Mercedes has the same product line-up worldwide

Integration-Responsiveness Framework; Global Integration

SUPERIOR ORGANIZATIONAL PROCESSES __________- summarizes two basic strategic needs companies have: to integrate value chain activities globally, capitalizing upon economies of scale, and to create products/processes that are responsive to local market needs. This is our same dichotomy we mentioned earlier. _______ - is the coordination of the firm's value-chain activities across multiple countries to achieve worldwide efficiency, synergy, and cross-fertilization in order to take advantage of similarities between countries. Maximize worldwide value chain efficiencies Ex. - Subaru markets very similar cars in most of the countries where it does business. Caterpillar and Komatsu compete head-on in all major world markets. If you believe the notion that the "world is getting smaller" and tastes are converging, as well as the notion that communication is much easier, then you might believe that we will see more and more use of the global strategic integration approach.

TRANSNATIONAL STRATEGY (MULTIDOMESTIC + GLOBAL) also called "glocal strategy."

SUPERIOR ORGANIZATIONAL PROCESSES the most advanced strategy A coordinated approach to internationalization in which the firm strives to be both- more responsive to local needs while retaining sufficient central control of operations to ensure efficiency and learning. Maximizes the major advantages of multidomestic and global strategies while minimizing their disadvantages. It is a flexible approach: standardize where feasible; adapt where appropriate. To implement _____________ strategy, the firm should: ◘ Exploit scale economies by sourcing from a reduced set of global suppliers and concentrate manufacturing in relatively few locations where competitive advantages can be maximized ◘ Organize production, marketing, and other value-chain activities on a global scale ◘ Optimize local responsiveness and flexibility ◘ Facilitate global learning and knowledge transfer ◘ Coordinate global competitive moves — that is, rather than following a country-by-country approach, deal with competitors on a global, integrated basis. McDonald's is a well-known for this strategy they were multi-domestic because they are so "in tune" with local tastes. But... They do a great job of utilizing logistics and operational efficiency. Their cost control is ridiculously great, although they consistently deliver quality food (for what it is!). On the other hand, they are extremely successful at customizing their products to fit the needs of the individual markets

multi-domestic strategy or a local stategy

Some companies treat countries independently and customize their product or service offering to the needs of the various markets. We call this... They are trying to go into a country and compete head-to-head with local companies by meeting the specific needs and tastes of the individual markets.

STRATEGIES THAT OPTIMIZE INT'L OPERATIONS

Successful Global firms: "structure follows strategy." The structure is set up to make the strategy work effectively - especially in int'l bus environment Structure is a tool that facilitates the implementation of strategy Organizational structures tend to evolve over time Organizational structure is a function of the centralization/decentralization decision.

APPROPRIATE ORGANIZATIONAL STRUCTURE

Successful Global firms: This is the architecture of the firm. The way the firm is set up so that the strategy can be carried out. In essence, we have to put knowledge, expertise, and authority in the parts of the company where they are needed has to do with putting the strategy in place and putting resources to work, which is Strategy Implementation). liked to say that formulation is "talking the talk" and implementation is "walking the walk." While a strategy is the blueprint for action, a firm needs a __________ with people, resources, and processes to implement it.

Visionary leadership

Successful Global firms: a quality of senior management that provides inspirational strategic guidance for managing efficiency, flexibility, and learning. I always like to say that great strategic leaders have the ability to "see around the corner" and to anticipate changes in the market and in the environment of the firm. Leadership is more complex in international firms than in domestic firms because valuable organizational assets— productive capabilities, brands, and human resources— may be employed in a variety of countries and in diverse business environments (difference between managers and leaders) FOUR CHARACTERISTICS of INTERNATIONAL VISIONARY LEADERS: ■ International mindset and cosmopolitan values- an openness to and awareness of diversity across cultures. Those who are open minded, committed to internationalization, and ready to adapt to other cultures are likely to succeed. ■ Willingness to commit resources- complexities of foreign markets imply that international ventures take more time than domestic ones to become profitable. Visionary leaders commit to them and believe the firm will eventually succeed. Commitment drives them to develop the financial, human, and other resources their firms need to achieve their international goals. Highly committed firms engage in systematic international market expansion, allocate necessary resources, and empower structures and processes that ensure ultimate success. ■ Strategic vision- articulate a strategic vision — what the firm wants to be in the future and how it will get there- the ideal picture of what the firm should become. This picture becomes a driving force for all plans, actions, and employees. ■ Willingness to invest in human assets- cultivate the most critical asset of any organization—human capital. In global firms, senior leaders adopt human resource practices such as hiring foreign nationals, promoting multi-country careers, and providing cross-cultural/language training.

Superior Organizational Processes

Successful Global firms: the managerial routines, behaviors, and mechanisms that allow the firm to function as intended. include mechanisms for collecting strategic information, ensuring quality control in manufacturing, and maintaining efficient payment systems for international sales. Example- General Electric gained a competitive advantage by developing and continuously improving processes that comprise its value chains- e.g. digitization of key documents

Strong Organizational Culture

Successful Global firms: the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt. I have always referred to culture as "the way we do things around here" and it applies to companies or even divisions in much the same way that it applies to countries or regions or even towns. Earlier in the course, we talked about country culture, here we are referring to company culture (which is of course influenced by the national culture) (just notes) Once losing (or even just mediocrity) permeates a company culture, change can be very difficult. Usually it takes a change in leadership to effectively change a culture ingrained with negative traits. Companies become as different as people do! it derives from the founders, visionary leaders, or some unique history of the firm. Companies that proactively build a global organizational culture: ■ Value and promote a global perspective in all major initiatives ■ Value global competence and cross-cultural skills among their employees ■ Adopt a single corporate language for business communications ■ Promote interdependency between headquarters and subsidiaries ■ Subscribe to globally accepted ethical standards

transnational or glocal strategy

The key to a ________________ is that the company receives the size and scale benefits of being a very large global company (doing business worldwide) but at the same time they are able to compete effectively in all local markets by creating products that appeal to the local clientele.

TWO STRATEGIC FOUNDATIONS

Whenever you read about international business success, you see the dichotomy of taking advantage of global scale economies while at the same time being responsive to the unique needs of individual markets. ■ Universality- global efficiencies- Japanese firms have traditionally been very good at this aspect ■ Cultural Adaptability- local responsiveness- European firms have always been very sensitive to uniqueness within each market U.S. firms have historically struggled with the local responsiveness to cultural/political diversities and have done much better with global efficiences via economies of scale.

managers; leaders

__________ are focused on directing the firm's day-to-day operations, maintain order, and promote the status-quo. They are responsible for administering or controlling specific activities in the firm. I have always believed that ______ are in place to carry out the strategies envisioned and created by leaders. ___________ are visionary, have great imagination, and hold a long-term perspective on the challenges and opportunities that confront the firm. _______are exceptionally skilled at motivating people and at setting the tone for how the firm will pursue its goals and objectives. They set the course and the tone for the firm, and people buy-in to what leaders stand for and wish to accomplish.

transnational strategy

a few very advanced firms have been able to effectively meld the benefits of both to create a very country-specific approach that also makes the most of global economies of scale. also called a "glocal" strategy because it combines the best of global and best of local) McDonald's, Coke, Starbuck's, and Nestle are some of the well-known examples: They have products with almost universal appeal that meet fairly basic human needs. But they do a good job of "tweaking" the product (serving size, container, taste, spices, appearance, ingredients, etc.) if necessary, but they are still able to benefit from huge economies of scale.

Global scale (global size)

is a very powerful tool for cost reduction and enhanced margins. It requires skillfully configuring activities across diverse settings, integrating and coordinating these activities, and implementing common processes to ensure the activities are performed optimally firm must also consider the specific needs and conditions that characterize the individual markets where it does business.

International strategy

is strategy carried out in two or more countries help the firm allocate scarce resources and configure value-adding activities on a worldwide scale, participate in major markets, implement valuable partnerships abroad, and engage in competitive moves in response to foreign rivals.

Strategy formulation

several different steps in the strategy process... derives from matching internal strengths/weaknesses with external opportunities/threats (SWOT). demands a strong understanding of the external environment and how the resources of the firm can be "put together" to create value, build competitive advantage, and lead to sustainable long-term success

Strategic management

speaks to the overall search by the firm for a successful and defensible "identity" in the marketplace (the search for competitive advantage and the ability to consistently deliver real value to the customer and growth, market share, and profit to the shareholders). From a global business perspective, _____________ is this higher level task of positioning the company globally to take advantage of the firm's resources, build competitive advantages, institute superior organizational processes and communication, produce great products and services, adapt and evolve continually in an improving manner, and build superior margin which is sustainable for years to come and despite changes in the operating environment and economy. That last really long and awesome sentence basically summarizes what we are trying to do as a company in general, and an international company in particular! (same answer for both)

STRATEGY

the overall positioning of the firm and the general plan for success based on utilizing firm resources and building competitive advantage and making the most of global opportunities. a planned set of actions that managers take to make best use of the firm's resources and core competences to gain competitive advantage

Successful Global firms:

● Visionary leadership ● Strong organizational culture ● Superior organizational processes ● Appropriate organizational structure ● Strategies that optimize international operations