is the tools for devising how you gain monopoly for real profits. finding what your monopoly is going to be. in business always try to find monopoly cause that is where you find profits.
strategic competitive advantage
you win by beating others
need to find something you can beat everyone else at. rc cola- no one drinks rc cola, so you need to be really good at advertising so that they can convince you something you dont need. rc cola use to be one of the best advertisers, rc cola did everything to be a great company, ended up being a complete failure because two other companies (pepsi and coke) were better at it. cable company has a monopoly position.
there are usually two or three winners in an industry
walmarts generic brand sams is the number one selling soft drink in the world, coke, and pepsi.
three generic strategies
michael porter summarized three generic strategies to win.
you have figured out how to run your company so efficiently that your cost is lower than everyone else in the industry. figuring out how to do everything in your industry better than everyone else. start a price war to kill off the WEAK competition.
if a company cant win its industry by being low cost leader, must convince them your product is better. get customers to pay higher premium for your product.
high quality strategy
differentiation- make product better than everyone else's, so convince them its better and should pay more, so if it cost 20$ more to make it better so you have to make them pay 30$ more than the low profit margin. almost never works. toaster- 20$ going price lasts a long time, theres a toaster that last twice as long for 50% higher price. quality isnt worth it to you so you wont buy it. very few companies use it cause its not worth it. bose is one that uses.
perceived high quality strategy
differentiation- dont make product better just make it believe it is better. no quality difference. lucky gold star now known as LG, was known as cheap junk so they changed quality but still no one would buy it still known as junk. sony bought lucky gold star. shipped them to walmart some is sony box some in lg box, decision process was brand name and price, they payed 100$ more for sony even though they were the same tv. dont try to make product better try to make perception better. all gasoline is all the same from the same refinery in texas.
differentiation- dont try to make a better profit, just try to make the lightest and greatest. bmw, apple.
differentiation- find something better about your product and sell that as making you better quality. best in international product is any product being sold in english, spanish, mandarin. companies just pick a country and rewrite in in that language and just sell it to that company.
differentiation- if you cant make a better product just make better service around it. hyundai went out and put out a 10 yr warranty. hyundai wins quality ratings. still a crappy car but they will fix it for you.
some strategies that work cause country is so small that you get a monopoly system. torrid- a spin off from hot topic, plus sizes hot topic and couldn't be cool in america but is cool everywhere else in the world. trying to stay small.
international strategy processes
a system between 6 and 8 steps for what strategy is the magic trick to make the company win.
what are you going to try and become as a company? "biggest company in soft drink"
decide what you are gonna do now figure out what the world looks like that. assessment of who competitors are, government, people
know what world looks like and asking for. look inside own company and figure out who you are and what you can do. never ask ppl in charge, ask around them. then go out and set some goals for the company.
going and finding ways to reach goals, how do you make it happen, create ideas.
choice of international strategy
look at the ideas and decided which ones do and dont work. working together, try and put together pieces that everything can come together and work.
international strategy implementation
making someone change their behavior, make ppl behave consistently with goals
evaluation and control
feedback, see if it worked and what didnt.
host countries policy
country you go into government will change rules. company in US working will healthcare, go to country who plays for ppls healthcare. country is much cheaper place for you to run that operation. get to write your own rules
overcoming operational obstacles
big market in greek town, skinny streets, where do i put walmart? no where. target decided to make a 5 story store. find ways to do things.
efficiencies of standardization
if you can get the world to standardize on your company, you've won. cisco gets communities to standardize on what they are doing, theyve won.
dont want to leave production system in a country for very long. first want it next to research and development. then u get research and development down so you shift it off to japan, make it work cheaper and efficiently. after they are done ship it to china. then move it to vietnam. how long does factory has to stay? how complex it is.
do not pay taxes if you are going to be a successful multi national company.
financial and info arbitrage
as a multinational company you have info before anyone else. you can see sales are going up and it tells you something about the economy. many ppl make millions and trillions of dollars. dont make money of business make it off info trading currencies and stocks.
once you have a monopoly position. nike created shoes, then to shorts, then shirts, then every sporting good, retail stores. use existing monopolies to find other monopolies
things you can do that no one else has done to make lots of money. birkini
large multinational company you are bigger than most of the countries you are in, not that hard to manipulate that countries laws. companies basically run the government. ethics comes into play.
consider procedural justice
people frequently care more about how a decision was come to then the decision itself. if they arent asked their opinion they think no one cares what they want. as a company and customers what they want you as a company to do, you dont have to do it.
localize international strategy to take into account local market idiosyncrasies
got to localize things. make things work from where you are. bev hills trying to tell mexico city what to do. they dont really know what they need to do. country director needs to know what to do and make it work.
maximize the subsidiaries contribution to its parent corporation
when you go out there in those international jobs, they send you to a place insignificant, experimental country, dont worry about making profits, leave you out there and try to make the company work.
plan and manage subsidiary in a manner consistent with company mission
defined mission, you need to feed into that core business. individual group is diff then overall group need to tie it into each other.
promote trust and confidence in local management
need upper management to trust lower management.
aligns, plans, goals, and activities within the subsidiary
what was the process all about, put together the people and they will do whatever they want, need to get them all working in one direction.