Competitive Advantage within an International Context: The Basic Framework. Competitive Advantage within an International Context: The Basic Framework.[r]
Trang 1Global Strategies and the Multinational Corporation
Global Strategies and the Multinational Corporation
• Implications of International Competition for Industry
Analysis
• Analyzing Competitive Advantage within an International
Context
• Applying the Framework
(1) International location of production (2) Foreign market entry strategies
• Multinational Strategies: Globalization versus National
Differentiation
• Strategy and Organization of the Multinational Corporation
OUTLINE
Trang 2The Internationalization Process
The Internationalization Process
International Global
Industries Industries
aerospace automobiles
military hardware oil
diamond mining semiconductors
agriculture consumer electronics
Domestic Multinational/
Industries Multidomestic
railroads Industries
laundries/dry cleaning investment banking
hairdressing hotels
milk consulting
Foreign Direct Investment
LOW
HIGH
Trang 3The Automobile Goes Global:
The GM Pontiac Le Mans
The Automobile Goes Global:
The GM Pontiac Le Mans
Trang 4Implications of Internationalization
for Industry Analysis
Implications of Internationalization
for Industry Analysis
INDUSTRY STRUCTURE
• Lower entry barriers around national markets
• Increased industry rivalry - lower seller concentration
- greater diversity of competitors
• Increased buyer power: wider choice for dealers & consumers
COMPETITION
• Increased intensity of competition
PROFITABILITY
• Other things remaining equal, internationalization tends to reduce an
industry’s margins & rate of return on capital
Trang 5COMPETITIVE ADVANTAGE
THE INDUSTRY ENVIRONMENT
Key Success Factors
FIRM RESOURCES
& CAPABILITIES
Financial resources
Physical resources
Technology
Reputation
Functional capabilities
General management
capabilities
THE NATIONAL ENVIRONMENT
National resources and capabilities (raw materials;
national culture; human resources; transportation, communication, legal infrastructure
Domestic market conditions Government policies
Exchange rates Related and supporting industries
Competitive Advantage within an International
Context: The Basic Framework
Competitive Advantage within an International
Context: The Basic Framework
Trang 6National Influences on Competitiveness: The Theory of
Comparative Advantage
National Influences on Competitiveness: The Theory of
Comparative Advantage
A country has a relative efficiency advantage in those products that make intensive use of resources that are relatively
abundant within the country E.g.
• Philippines relatively more efficient in the production of
footwear, apparel, and assembled electronic products than in the production of chemicals and automobiles.
• U.S is relatively more efficient in the production of
semiconductors and pharmaceuticals than shoes or shirts
When exchange rates are well-behaved, comparative
advantage becomes competitive advantage.
Trang 7Revealed Comparative Advantage for
a Certain Broad Product Categories
Revealed Comparative Advantage for
a Certain Broad Product Categories
portation equipment
Note: Revealed comparative advantage for each product group
is measured as: (Exports less Imports)/ Domestic production
Trang 8Porter’s Competitive Advantage
of Nations
Porter’s Competitive Advantage
of Nations
Extends and adapts traditional theory of comparative
advantage to take account of three factors:
International competitive advantage is about companies
not countries—the role of the national environment is
providing a home base for the company.
Sustained competitive advantage depends upon dynamic factors innovation and the upgrading of resources and
capabilities
The critical role of the national environment is its impact upon the dynamics of innovation and upgrading
Trang 9FACTOR CONDITIONS
DEMAND CONDITIONS
RELATING AND SUPPORTING INDUSTRIES
STRATEGY, STRUCTURE,
AND RIVALRY
Porter’s National Diamond Framework
than natural endowments.
Trang 10Consistency Between Strategy
and National Conditions
Consistency Between Strategy
and National Conditions
In globally-competitive industries, firm strategy needs to take account of national conditions:
– U.S textile manufacturers must compete on the basis of
advanced process technologies and focus on high quality, less price-sensitive market segments
– In the semiconduictor industry, CA-based firms concentrate
mainly upon design of advanced chips, Malaysian firms
concentrate upon fabrication of high volume, less
technologically advanced items (e.g DRAM chips)
– Dispersion of value chain to exploit different national
environments (e.g Nike conducts R&D in US, components in Korea and Thailand, assembly in Indonesia, China, and India, marketing in Europe and North America)