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Strategic International

Business Management
Eileen Roddy

Associate Dean International


Module: An introduction
Content Aims
•Strategy at the international and •Clear appreciation of global
national level management issues
•Glocal issues (think global act •Be aware and able to critique key
local) strategic models and assumptions
•Assessment and limitations
•Individual assignment and •Demonstrate clear appreciation
group assignment of the major debates about
•Core handbook structure, culture, leadership,
motivation
•Why important?
•Ability to strategically analyse an
organisation
Key Topics

1. International Business Management


2. National Competitiveness in Global Strategy
3. External ,Internal and Implementation of Strategy
4. Structure, Culture and Creativity
5. Strategy Determination ; retailing as an example
6. Global Management and Leadership
Topic 1: International Business Strategy and
Globalization

a) The history of international business development


b) Globalisation drivers
c) The global business environment
d) The politico-legal environment
e) The economic environment
f) The cultural environment
g) The technological environment
h) The competitive advantage of nations
Beginnings of world trade
• Ancient trading empires (up to 1400 AD)
• Era of exploration (1400-1700)
• Empires and mercantilism
• The industrial revolution and colonialism
• The inter world war years 1918-1936
• Rise of the multinationals 1945-1970
• Why do countries trade
• Mercantilism and Absolute Advantage
• Comparative advantage
• Factor proportions (FP) theory
New Trade Theory; Helpman and
Krugman (1985)
• Economies of scale plus first mover advantage
• Specialisation (country becomes market leader)
• Critical mass creation (market share, customer recognition,
turnover etc.)
• Barriers to entry in some sectors
• Services and supporting industries adds to critical mass and
increase specialisation
• US Aircraft industry was supported by government post 1950s
Transactional Cost Analysis

• Coase (1937) – firms hit a ‘tipping point ‘ in their growth where


costs of organic growth outweigh the costs of continued
expansion
• Some firms become MNEs
• Others use collaboration and partnering
• Transaction cost analysis has ex-ante and ex-post costs
• Ex-ante costs e.g. Market research costs
• Ex-post costs e.g. Collaborative monitoring and on-going
relationship costs
World’s leading Exporters
(2010)
Leading exporters Value US $ billions
1. China 1.1,506
2. Germany 2.1,337
3. USA 3.1,270
4. Japan 4.765
5. France 5.509
6. South Korea 6.466
7. Italy 7.458
8. Netherlands 8.451
World’s leading importers
(2010)
Leading importers Value US $ billions
1. USA 1.1,903
2. China 2.1,307
3. Germany 3.1,120
4. Japan 4.637
5. France 5.578
6. Italy 6.560
7. UK 7.547
8. Hong Kong 8.413
Exercise :On the Internet research the
world’s leading exporters/importers

• Go onto the internet


• Briefly report on the major players and
changes therein since 2010.
• (World Trade Organisation http://www.wto.org)
Globalisation drivers

• Market drivers e.g. world brands


• Competitive drivers e.g. New entrants BRICs
• Government drivers e.g. denationalisation
• Cost drivers e.g. economies of scale
• Other drivers e.g. Financial markets global reach
• 4 key factors in globalisation – politics,economics, finance and
technology
More cross national co-
operation
• Obtain reciprocal advantages
• Joint actions to solve problems e.g.joint
ventures
• Mass issues to be managed e.g. Carbon
management, oceans , resources
• Different business models – shared services,
off-shoring, on-shoring etc.
Globalisation : Threats and Opportunities

Pick one of the following industries/industry sectors:


• Financial services
• The perfume industry
• The automotive industry
• The tourism industry
• The aircraft passenger carrier industry
Discuss the opportunities (and threats) and the changes that have
occurred and are occurring in your chosen global sector, from a
political, economic, financial and technological perspective. Write
a brief report and submit to your tutor.
The Global Business Environment
•World Trade Organisation •Political economic integration
(previously GATT)1947 •Free Trade Areas
•United Nations (1945) •Customs Union
•The International Monetary Fund •Common Market
(IMF) •Economic Union
•World Bank Group (WBG)
•IBRD (1976) and International
Business
•The Regional Trading Blocs(EU,
NAFTA, MERCOSUR, Andean
Pact, ASEAN,APEC)
Exercise : Greeting card company
• As a medium sized company making and selling cards , you only
operate in the domestic market but wish to expand into new
markets
• Initial analysis suggests opportunities in Chile, China,Brazil,Czech
Republic, The Netherlands, Eire and Japan
• What information do you need per market, where can it be
sourced and attempt to rank your chosen criteria
The Politico-Legal Environment
Type of political system
Type of political control
Political instability :
The Feierabend Index
Political vulnerability
Political Risk and management
Relative bargaining power
Integrative techniques (inc joint
ventures)
Protective and defensive
techniques
Legal environment and
legislation
•Culture and Environment (see
topic 3)
The Economic and Technological
Environments
Economic Technological
•World population increases •Positives and negatives of technology
•Most populous nations •Technology and business
•Age group distributions •Technology audit
•Most wealthy economies and least •Technology strategy and product and
wealthy service
•Problems with measures like purchasing •Technology and management control
power parity (PPP) •Innovation and diffusion – The innovation
•Country risk ratings,f inancial and continuum
economic risk •Predicting technology change
•Perceived environmental uncertainty •Social networks and technology
•Index of economic freedom
Topic 1

•A review of the areas


considered in topic 1

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