International strategic management. (Lecture 3)

strategic alternatives available to firms
Distinguish and analyze the components of international strategy
Describe the international strategic management process
Identify and characterize the levels of international strategies

oriented concept of how a firm will achieve its objectives. Strategy formulation (or simply strategizing) is the process of deciding what to do; strategy implementation is the process of performing all the activities necessary to do what has been planned. 
International Strategy reflects trade-offs between local responsiveness and global efficiency. For firms to gain a competitive advantage, they have to devise strategies that take best advantage of the firm’s core compentencies and that are difficult for competitors to copy

planning process aimed at formulating and implementing strategies that enable a firm to compete effectively internationally

Strategic Planning

The process of developing a particular international strategy is often referred to as strategic planning

and how will it make those products or services?
Where and how will it sell them?
Where and how will it acquire the necessary resources?
How does it expect to outperform its competitors?

Factors

Language
Culture
Politics
Economy
Governmental interference
Labor
Labor relations

Financing
Market research
Advertising
Money
Transportation/ communication
Control
Contracts

International Strategic Management

to conduct business?
Aspects of scope
Geographical region
Market or product niches within regions
Specialized market niches

Synergy
Answers the question
How can different elements of our business benefit each other?
Goal is to create a situation where the whole is greater than the sum of the parts

Resource deployment
Answers the question
Given that we are going to compete in these markets, how will we allocate our resources to them?
Resource specifics
Product lines
Geographical lines

Distinctive competence
Answers the question
What do we do exceptionally well, especially as compared to our competitors?
Represents important resource to the firm

standardized
products

HOME REPLICATION
Firm uses core
competency or firm-
specific advantage
MULTIDOMESTIC
Firm operates as a
collection of relatively
independent subsidiaries

TRANSNATIONAL
Firm combines benefits
of global scale
efficiencies with benefits
of local responsiveness

Low High
Pressures for Local Responsiveness/Flexibility

Pressures for Global Efficiencies

High
Low

strategic goals

Develop tactical goals and plans

Develop a control framework

Steps in International Strategy Formulation

target customers and markets, principal products, geographical domain, core technologies, concerns for survival, plans for growth and profitability, basic philosophy, and desired public image

SWOT Analysis

Strengths
Weaknesses
Opportunities
Threats

Environmental Scanning

is a systematic collection of data about all elements of the firm's external and internal environments, including markets, regulatory issues, competitors' actions, production costs, and labor productivity

particular course of action

Tactical Goals and Plans

Middle management issues
Details of implementation

Examples
Hiring
Compensation
Career paths
Distribution and logistics

Control Framework

set of managerial and organizational processes that keep the firm moving toward its strategic goals

strategy implementation is making the plan happen.
There are different forms of strategy. Business strategy refers to how a firm competes, while corporate strategy answers questions concerning the businesses with which the organization should compete. International strategy is a key feature of many corporate strategies. In some cases, international strategy takes the form of outsourcing or offshoring.
An overview of the strategizing process involves a SWOT (strengths, weaknesses, opportunities, threats) analysis and the development of the organization’s mission and vision.

Creating and Sustaining Superior Performance, by Michael E. Porter, The Free Press, a Division of Simon & Schuster Copyright © 1985 by Michael E. Porter and Strategic Management and Competitive Advantage: Concepts and Cases, 4th edition, by Jay B. Barney and William S. Hesterly, © 2012 by Pearson Education, Inc., publishing as Prentice Hall..