Chapter 11 International Strategy & Organization

Front 1

Planning

Back 1

process of identifying and selecting an organization’s objectives and deciding how the organization will achieve those objectives.

Front 2

Strategy

Back 2

Set of planned actions taken by managers to help a company meet its objectives.

Front 3

1. Company Mission & goals

= business + objectives

2. Core Competencies &value creating activities = unique abilities + primary act+ supporting act + natl & intl business environment

3. Strategies

= multinational/global + corp level + business level + department level strategies

Back 3

Stages of Strategy Formulation

Strat Formulation = Plan + Strategy

Front 4

mission statement

Back 4

a written statement of why a company exists and what it plans to accomplish.

Front 5

stakeholders

Back 5

All parties, ranging from suppliers and employees to stockholders and consumers, who are affected by a company’s activities.

Front 6

objectives

Back 6

plans to achieve goals

Front 7

core competency

Back 7

Special ability of a company that competitors find extremely difficult or impossible to equal.

Front 8

value chain analysis

Back 8

Process of dividing a company’s activities into primary and support activities and identifying those that create value for customers.

Front 9

Logistics

Production

Marketing and Sales

Customer Service

Back 9

Primary Activities

areas in which the company can increase the value provided to its customers.

Front 10

HR
Tech Development
Business Infrastructure
Sourcing

Back 10

Support activities

assist companies in performing their primary activities.

Front 11

1. multinational (multidomestic) strategy

2. global strategy

Back 11

2 International Strategies

Front 12

multinational (multidomestic) strategy

Pros: allows companies to monitor buyer preferences closely in each local market and respond quickly and effectively to it.

Cons: cannot exploit scale economies

Back 12

Adapting products and their marketing strategies in each national market to suit local preferences.

Front 13

global strategy

Pros: cost savings (passed to consumers to gain market share) due to product & marketing standardization. Also allows share lessons learned in one market at other locations

Cons: overlook differences in buyer preferences (standardized) creating an opportunity for niche market

Back 13

Offering the same products using the same marketing strategy in all national markets.

Front 14

1. Corporate level

2. Business level

3. Department level

Back 14

3 levels of company strategy to formulate

Front 15

Growth

Retrenchment

Stability

Combination

Back 15

4 Approaches to Corporate Level Strategy

Front 16

growth strategy

Back 16

Strategy designed to

increase the scale (size of activities) or scope (kinds of activities) of a corporation’s operations.

Front 17

retrenchment strategy

Back 17

Strategy designed to

reduce the scale or scope of a corporation’s businesses.

Front 18

stability strategy

Back 18

Strategy designed to

guard against change and used by corporations to avoid either growth or retrenchment.

Front 19

combination strategy

Back 19

Strategy designed to

mix growth, retrenchment, and stability strategies across a corporation’s business units.

Front 20

Business Level Strategy

Back 20

general competitive strategy in the marketplace

Front 21

low-cost leadership,

differentiation

focus.

Back 21

Types of Business level strategies

Front 22

differentiation strategy

quality - i.e Noritake ceramics

brand images - i.e Armani DKNY

product design - sum of the features by which a product looks and functions i,e Tag Huer watches from Switzerland

Back 22

Strategy in which a company designs its products to be perceived as unique by buyers throughout its industry.

develop loyal customer base

Front 23

low-cost leadership strategy

works best with mass-marketed standardized products aimed at price- sensitive buyers.

ex: casio calculators

Back 23

Strategy in which a company exploits economies of scale to have the lowest cost structure of any competitor in its industry.

Front 24

focus strategy

Back 24

Strategy in which a company focuses on serving the needs of a narrowly defined market segment by being the low-cost leader, by differentiating its product, or both.

Front 25

Department level strategy

Back 25

focus on the specific activities that transform resources into products: to the primary and support activities that exploit their value-creating strengths.

Front 26

organizational structure

centralized vs decentralized

Back 26

Way in which a company divides its activities among separate units and coordinates activities among those units.

Front 27

Centralization

Back 27

decision making concentrates at a high organizational level in one location,

ex: headquarters

Front 28

Decentralization

Back 28

disperses decisions to lower organizational levels, such as to international subsidiaries closer to the needs and preferences of local buyers

Front 29

Flexibility - modify to suit changes in structure, strategies and business environment

Coordination - structures must defines areas of responsibility and clear chains of command

chains of command= Lines of authority from top management to individual employees specify internal reporting relationships.

Back 29

Issues in Org Structure

Front 30

1. international division structure

2. international area structure

3. global product structure

4. global matrix structure

Back 30

4 types of international org structure

Front 31

international division structure

Best for: divisional managers as specialist; reduce costs, increase efficiency, and prevent international activities from disrupting domestic operations.

Problems: poor coordination and reduces authority

Back 31

Organizational structure that separates domestic from international business activities by creating a separate international division with its own manager.

Front 32

international area structure

Best for: treat each market as unique: vast cultural, political, or economic differences between nations or regions.

Back 32

Organizational structure that organizes a company’s entire global operations into countries or geographic regions.

Front 33

global product structure

Benefits: diverse sets of products and services

Back 33

Organizational structure that divides worldwide operations according to a company’s product areas.

Front 34

global matrix structure

Best for: increase local responsiveness, reduce costs, and coordinate worldwide operations.

Problems: numerous meetings to coordinate; foggy responsibility and accountability

Back 34

Organizational structure that splits the chain of command between product and area divisions.

each manager has 2 reporting bosses - product division and president of geographic area

Front 35

Work teams

Back 35

other way international companies can improve responsiveness and effectiveness.

assigned the tasks of coordinating their efforts without changing org structure

Front 36

Self managed team

cross functional team

global teams

Back 36

Different types of teams

Front 37

self-managed team

Back 37

Team in which the employees from a single department take on the responsibilities of their former supervisors.

Front 38

cross-functional team

Back 38

Team composed of employees who work at similar levels in different functional departments.

Front 39

global team

Back 39

Team of top managers from both headquarters and international subsidiaries who meet to develop solutions to company-wide problems.