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STRATEGIC MGMT PROCESS

Strategic mgmt process involves  Strategic thinking— Mgmt Leadership  Strategic analysis— Envt. corporate governance. intent. .(competitive rivarly). mission  Creating competitive Advantage—Business level stgy. Corporate level stgy ( acquistion & restructuring) Monitoring– creating entrepreneurial opportunities.

Opportunities & outcomes of International strategy  Identify international opportunities Increased Mkt share Return on investment Economies of scale & learning Advantage in location  Explore resources &capabilities Int bus level stgy Multi domestic stgy Global stgy Transactional stgy         .

high cost. little control & low returns  Strategic alliances.shared cost.Modes of Entry Exporting .high cost. low risk. complex negotiations problems of merging  . risk & problems  Acquistions – quick access to new mkts.resources. low control  Licensing – low cost.

Contd  Establishments of new subsidiaries. time consuming.complex. high risk. costly. maximum control & potential .

Use of Core Competence Problems Better performance Modes of Entry Innovation Risk .

International Business level Stgy Factors of prodn Firm strategy structure & rivalry Demand conds Related & supporting Industries .

International corporate level H Global Trans national Need for Global integration Multi domestic L L Need for local Responsiveness H .

Multidomestic stgy Strategy & operating decisions are decentralized to strategic business units in each country  Products and services are tailored to local markets  Business units in one country are independent of each other  Assume mkts differ by country or regions  Focus is on competition in each mkt  .

Global strategy Pdts are standardized  Decisions regarding bus-level stgy are centralized  SBU’s are assumed to be interdependent  Emphasizes on economies of scale  Often lacks responsiveness to local mkts  Requires resource sharing & co-ordination across borders  Outsource some primary or support activities to the world’s best providers  .

Transnational strategy  Seeks to achieve both global efficiency and local responsiveness  Strong central control and cordination to achieve efficiency  Decentralization to achieve local mkt responsiveness  Organisational learning a must .

PROBLEMS  ENVIRONMENTAL TRENDS  (liability of foreignness)  Security risks  Tighter immigration policies .

contd  REGIONALIZATION  Location can affect value creation  May wish to narrow focus to a particular region of the world  Enter regional markets sequentially. beginning with the most familiar mkt .

war  Nationalization of Firm’s resources .RISKS  POLITICAL RISK  Instability in Nation. govt.

contd  ECONOMIC RISKS  Differences and fluctuations in value of different currencies  Prevailing wage rates may differ  Different property rights  unemployment .

LIMITATIONS  Cost of co-ordination across diverse geographical business units  Institutinal and cultural barriers  Understanding strategic intent of competitors  Overall complexity of comprtition .

experience and increase market size  Increase returns on innovation  Generate resources for innovation .Value creation outcomes and returns  Expands sales of its goods/services into different geographic locations  Increase firms returns  Achieve positive stock returns  Achieve economies of scale.