international business chapter 12
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36 terms
Terms | Definitions |
|---|---|
 strategy | 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 | finding monopoly |
| 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. |
| low cost | 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. |
| differentiation | 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. |
| technical leadership | differentiation- dont try to make a better profit, just try to make the lightest and greatest. bmw, apple. |
| special features | 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. |
| better service | 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. |
| niche | 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. |
| international mission | what are you going to try and become as a company? "biggest company in soft drink" |
| environmental assessment | decide what you are gonna do now figure out what the world looks like that. assessment of who competitors are, government, people |
| organizational analysis | 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. |
| international alternatives | 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. |
| product shifting | 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. |
| tax minimization | 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. |
| leveraged resources | 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 |
| unique markets | things you can do that no one else has done to make lots of money. birkini |
| political control | 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. |
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