3. Strategic Choice (International Business Strategy)

This is a mind map about 3. Strategic Choice (International Business Strategy). The main content includes the motivations for corporate international operations, the main methods of international operations, the international operations of enterprises in the global value chain, and the principles of international operations. Types of strategies, corporate strategies in emerging markets.

Edited at 2022-08-13 12:39:55

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3. Strategic Choice (International Business Strategy)

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Outline

Strategic Choice

international business strategy

Motives for international business operations of enterprises

1. Seek the market (market orientation) 2. Seek efficiency (cost orientation) 3. Seek resources (resource orientation) 4. Seek ready assets (technology and management orientation)

The main methods of international business

Export trade

High-tech path

1. Traditional (continuous): ① developed countries → similar developed countries → developing countries ② developing countries → similar developing countries → developed countries 2. New type: (discontinuous) developed/developing countries → developed countries → developing countries

Primary, low-level, labor-intensive product path

Developing countries → developed countries

Foreign Direct Investment

Wholly owned subsidiary

Advantages: ① Complete control ② Get rid of conflict Disadvantages: More expenses ② Lack of supporters

joint venture

Advantages: ① Reduces capital investment ② Helps make up for the lack of experience in cross-border operations ③ Helps attract and utilize the resources of the host country’s joint venture partners Disadvantages: Coordination costs may be too large (goals, cultural differences)

non-equity arrangements

Including: contract manufacturing, service outsourcing, order farming, franchising, licensed operation, management contract Advantages: ① Can export intangible assets such as technology and craftsmanship, not just tangible products, so it can overcome commodity trade barriers ② Can overcome high freight costs Situations that cause a product to lack competitiveness in the international market ③ Avoid business risks, maintain stable income, and give full play to the effectiveness of technology Disadvantages: Lack of control, invisibly setting up competitors for oneself, hindering oneself from entering certain markets

International operations of enterprises in global value chains

The role of enterprises in global value chains

1. Leading companies 2. First-tier suppliers 3. Other tier suppliers 4. Contract manufacturers

The division of labor model of the global value chain

1. Bureaucratic value chain (direct equity control) 2. Market value chain (no affiliation or control relationship) 3. Captive value chain (implementation of high degree of control) 4. Modular value chain (relationship of complementary advantages) 5 .Associated value chain (division of labor, jointly defining products)

Enterprise upgrade type

1. Process upgrade 2. Product upgrade - improved design 3. Function upgrade - occupy higher value-added links (R&D, marketing) 4. Value chain upgrade

Types of strategies for international operations

1. International strategy: (production according to the requirements of the headquarters) product development in the home country, manufacturing and sales in the host country 2. Multi-country localization strategy: production according to local needs 3. Globalization strategy: cooperative production in multiple places, pursuing low cost, doing the right thing in the right place, Products in various countries are standardized 4. Transnational strategy: Global strategic features meet local needs, and parent and subsidiary companies provide two-way

Corporate strategy for emerging markets

1. Defender: Use local advantages to defend

① Focus on customers who like local brands and abandon customers who advocate international brands ② Frequently adjust products and services to meet the special needs of customers ③Strengthen the construction and management of distribution networks to alleviate the pressure from foreign competitors

2. Expander: Extend local advantages overseas

By rationally utilizing portable advantageous resources, we can use our success in the local market as a platform to expand into other markets.

3. Avoiders: avoid the impact of multinational companies

① Establish joint ventures and cooperative enterprises with multinational companies ②Sell the company to a multinational company ③Redefine your core business and avoid competition with multinational companies ④Use local advantages to focus on market segments and shift business focus to certain links in the value chain ⑤ Produce complementary products with multinational companies, or transform them into products suitable for local tastes

4. Counterbalancers: Confrontation on a Global Scale

① Don’t focus too much on cost competition, but measure your own strength against the leading company (compared to the leading company) ②Find a market that is clear and easy to defend (find the market) ③Find a suitable breakthrough in the globalized industry (find a breakthrough) ④Learn key technologies from developed countries to develop their own skills and capital (obtain resources)