CHAPTER 12: THE STRATEGY OF INTERNATIONAL BUSINESS

Get Started. It's Free
or sign up with your email address
Rocket clouds
CHAPTER 12: THE STRATEGY OF INTERNATIONAL BUSINESS by Mind Map: CHAPTER 12: THE STRATEGY OF INTERNATIONAL BUSINESS

1. WHAT IS STRATEGY?

1.1. A firm's strategy refers to the actions that managers take to attain the goals of firm

1.2. Firms need to pursue strategies that increase profitability and profit growth

1.2.1. 1. Add value

1.2.2. 2. Lower costs

1.2.3. 3. Sell more in existing markets

1.2.4. 4. Expand internationally

2. HOW IS VALUE IS CREATED?

2.1. The firm's value creation is the difference between V ( the price that the the firm can charge for that product given compepetitive pressure and C ( the costs of producing that products)

2.2. Profits can be increased by

2.2.1. 1. Using a differentiation strategy

2.2.2. 2. Using a low strategy

3. THE IMPORTANCES OF STRATEGIC POSITIONING

3.1. Pick a viable position on the efficiency frontier

3.2. configure internal operations to support that position

3.3. Have the right organization structure in the place to execute the strategy

4. HOW ARE A FIRM'S OPERATIONS CONFIGURED?

4.1. Operations can be though of a value chain composed of a series of distinct value creation activities

4.2. Value creation activities can be categorized

4.2.1. Primary activities

4.2.2. Support activites

5. FIRMS INCREASE PROFITS THROUGH INTERNATIONAL EXPANSION

5.1. 1. Expand their market

5.2. 2. Realize location economies

5.3. 3. Realize greater cost economies from experience effects

5.4. 4. Earn a greater return

6. FIRMS LEVERAGE THEIR PRODUCT AND COMPETENCIES

6.1. Firm can increase groth by selling goods or services developed at home internationally

6.2. The success of firms that expand internationally depends

6.2.1. 2. Their core competencies

6.2.2. 1. The goods or services they sell

7. IMPORTANCE OF LOCATION ECONOMIES

7.1. 1. Lower the costs of value creation and achieve a low cost position

7.2. 2. Differrentiate their product offering

8. WHY EXPERIENCES EFFECTS IMPORTANT?

8.1. By moving down the experiences curve, firm reduce the cost of creating value

8.2. Firms can use a single plant to serve global markets

8.3. Economies of scale refer to reductions in unit cost achieved by producing a large valume of a product

8.3.1. 1. spreading fixed costs over large volume

8.3.2. 2. utilizing production facilities more intensively

8.3.3. 3. Increasing bargaining power with suppliers

9. HOW CAN MANAGERS LEVERAGE SUBSIDIARY SKILLS?

9.1. 1, Recognize that valuable skills

9.2. 2. Establish an incentive system

9.3. 3. Have a processs for identifying

9.4. 4. Act as facilitators

10. PRESSURES EXISTS IN GLOBAL MARKETPLACE

10.1. Types of pressure in Global Marketplace

10.1.1. 1. Pressures for cost reductions

10.1.2. 2. Pressure to the locally responsive

10.2. Pressures for Cost Reductions greatest

10.2.1. 1. When major competitors are based in low cost locations

10.2.2. 2. Where there is persistent excess capacity

10.2.3. 3. Where consumers are powerful

10.3. Pressures for Local Responsiveness Greatest

10.3.1. 1.Differences in distribution channels

10.3.2. 2. Host government demands

10.3.3. 3. Differences in consumer tastes and preferences

11. WHICH STRATEGY SHOULD FIRMS CHOOSE?

11.1. 1. Global

11.2. 2.

11.3. 3. Transnational

11.4. 4. International