Chapter 13 - The strategy of international business. After completing this chapter, students will be able to: Explain international strategy and competencies and international competitive advantage; describe the steps in the global strategic planning process; explain the purpose of mission statements, objectives, goals, and strategies; | International Business 9e By Charles . Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 13 The Strategy of International Business What Is Strategy? A firm’s strategy refers to the actions that managers take to attain the goals of the firm Firms need to pursue strategies that increase profitability and profit growth Firms can add value lower costs sell more in existing markets expand internationally LO1: Explain the concept of strategy. What Is Strategy? Determinants of Enterprise Value How Is Value Created? The firm’s value creation is the difference between V and C a firm has high profits when it creates more value for its customers and does so at a lower cost Profits can be increased by Using a differentiation strategy Using a low cost strategy To maximize long run return on invested capital firms pick a viable position on the efficiency frontier, configure internal operations to support that position, have the right organization structure in place to execute the strategy How Is Value Created? Value Creation How Are A Firm’s Operations Configured? A firm’s operations are like a value chain composed of distinct value creation activities Primary activities R&D production marketing and sales customer service Support activities information systems logistics human resources How Are A Firm’s Operations Configured? The Value Chain How Can Firms Increase Profits Through International Expansion? International firms can Expand their market Realize location economies Realize greater cost economies from experience effects Earn a greater return LO2: Recognize how firms can profit by expanding globally. How Can Firms Leverage Their Products And Competencies? The success of firms that expand internationally depends on the goods or services sold the firm’s core competencies Core competencies allow firms to reduce the costs of value creation and/or to create perceived value so that premium pricing is possible Why Are . | International Business 9e By Charles . Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 13 The Strategy of International Business What Is Strategy? A firm’s strategy refers to the actions that managers take to attain the goals of the firm Firms need to pursue strategies that increase profitability and profit growth Firms can add value lower costs sell more in existing markets expand internationally LO1: Explain the concept of strategy. What Is Strategy? Determinants of Enterprise Value How Is Value Created? The firm’s value creation is the difference between V and C a firm has high profits when it creates more value for its customers and does so at a lower cost Profits can be increased by Using a differentiation strategy Using a low cost strategy To maximize long run return on invested capital firms pick a viable position on the efficiency frontier, configure internal operations to support that position, have the right .
