tailieunhanh - Chapter 6: Strategy in the Global Environment

Describe 4 basic strategies in business so that company can implement cost reduction and local responsiveness | Chapter 6 Strategy in the Global Environment The Global Environment Managers need to consider: How globalization is impacting the environment in which their company competes What strategies they should adopt to exploit opportunities How to counter competitive threats The Global Environment Industry boundaries do not stop at national borders The shift to global markets has intensified competitive rivalry in industries Global markets created enormous opportunities Increasing Profitability Through Globalization The success of many multinational companies is based not just on the goods and services they sell, but upon the distinctive competencies that underlie their production and marketing Globalization increases profits by: Expanding the market Realizing economies of scale Realizing location economies Leveraging the skills of global subsidiaries Competitive Pressures Two main pressures: Pressure for cost reduction Pressure to be locally responsive These pressures place conflicting . | Chapter 6 Strategy in the Global Environment The Global Environment Managers need to consider: How globalization is impacting the environment in which their company competes What strategies they should adopt to exploit opportunities How to counter competitive threats The Global Environment Industry boundaries do not stop at national borders The shift to global markets has intensified competitive rivalry in industries Global markets created enormous opportunities Increasing Profitability Through Globalization The success of many multinational companies is based not just on the goods and services they sell, but upon the distinctive competencies that underlie their production and marketing Globalization increases profits by: Expanding the market Realizing economies of scale Realizing location economies Leveraging the skills of global subsidiaries Competitive Pressures Two main pressures: Pressure for cost reduction Pressure to be locally responsive These pressures place conflicting demands on a company Cost Reductions Cost reductions are common in: Industries where price is the main competitive weapon Industries with universal need products Universal Need: When consumer preference is similar or identical in different nations Companies may achieve cost reduction by basing production in a low-cost location or by offering a standardized product. Figure : Pressures for Cost Reduction and Local Responsiveness Local Responsiveness Pressures These arise from differences in: Consumer taste and preferences Infrastructure or traditional practices Distribution channels Host government demands The more that customer preferences vary, the more local responsiveness is required Choosing a Strategy Basic four strategies: Global Standardization Strategy Localization Strategy Transnational Strategy International Strategy Figure : Four Basic Strategies Global Standardization Strategy Focuses on increasing profitability by pursuing a low-cost strategy on a global scale Works best .