Chapter 14 - Global strategies and the multinational corporation. This chapter presents the following content: Implications of international competition for industry analysis, analyzing competitive advantage within an international context, applying the framework, multinational strategies: globalization versus national differentiation, strategy and organization of 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 1 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 International Trade Foreign Direct Investment LO W LOW HIGH HIGH 1 The Automobile Goes Global: The GM Pontiac Le Mans Design: Germany (by Opel) Brakes: France, . Sheetsteel: Japan S. Korea Stamping of body parts: S. Korea Tires: S. Korea Engines: liter S. Korea Windshield: S. Korea liter Australia Battery: S. Korea Fuel injection: . Wiring harness: S. Korea Fuel pump: . Radio: Singapore Transmission: Canada & . Assembly: S. Korea Rear axle: . Marketing & Steering: . distribution: N. America 4 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 5 COMPETITIVE ADVANTAGE THE INDUSTRY ENVIRONMENT Key Success Factors FIRM RESOURCES & CAPABILITIES -- Financial resources -- Physical resources -- Technology -- Reputation -- Functional capabilities -- General management capabilities . | 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 1 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 International Trade Foreign Direct Investment LO W LOW HIGH HIGH 1 The Automobile Goes Global: The GM Pontiac Le Mans Design: Germany (by Opel) Brakes: France, . Sheetsteel: Japan S. Korea Stamping of body parts:
