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    Topic 10

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    This document discusses strategic management issues related to global and international business operations. It begins by outlining the advantages and disadvantages of entering global markets, including gaining new customers but also facing different business conditions in foreign countries. Next, it discusses protectionism and its impacts. The document then explains when a firm may need to become more or less global to compete. It also discusses the global challenges facing multinational corporations. Finally, it emphasizes the importance of understanding cultural and communication differences between countries for international business success.

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    Topic 10

    Uploaded by

    Ali
    21 views15 pages
    This document discusses strategic management issues related to global and international business operations. It begins by outlining the advantages and disadvantages of entering global markets, including gaining new customers but also facing different business conditions in foreign countries. Next, it discusses protectionism and its impacts. The document then explains when a firm may need to become more or less global to compete. It also discusses the global challenges facing multinational corporations. Finally, it emphasizes the importance of understanding cultural and communication differences between countries for international business success.

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    This document discusses strategic management issues related to global and international business operations. It begins by outlining the advantages and disadvantages of entering global markets, including gaining new customers but also facing different business conditions in foreign countries. Next, it discusses protectionism and its impacts. The document then explains when a firm may need to become more or less global to compete. It also discusses the global challenges facing multinational corporations. Finally, it emphasizes the importance of understanding cultural and communication differences between countries for international business success.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    21 views15 pages

    Topic 10

    Uploaded by

    Ali
    This document discusses strategic management issues related to global and international business operations. It begins by outlining the advantages and disadvantages of entering global markets, including gaining new customers but also facing different business conditions in foreign countries. Next, it discusses protectionism and its impacts. The document then explains when a firm may need to become more or less global to compete. It also discusses the global challenges facing multinational corporations. Finally, it emphasizes the importance of understanding cultural and communication differences between countries for international business success.

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    © All Rights Reserved
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    Download as pdf or txt
    of 15

    Strategic Management

    STM301
    BBA

    Ali Rasheed
    Unit 10: Global/International Issues
    1. Explain the advantages and disadvantages of entering
    global markets.

    2. Discuss protectionism as it impacts the world economy.

    3. Explain when and why a firm (or industry) may need to


    become more or less global in nature to compete.

    4. Discuss the global challenge facing MNC firms.


    Strategic Management Model
    Global/International Issues
    • The underpinnings of strategic management
    hinge on managers gaining an understanding
    of competitors, markets, prices, suppliers,
    distributors, governments, creditors,
    shareholders, and customers worldwide.

    • The price and quality of a firm’s products and


    services must be competitive on a worldwide
    basis, not just on a local basis.
    Risks of Multinational Organizations
    Expropriation of assets

    Currency losses through exchange rate fluctuations

    Social/political disturbances

    Import/export restrictions

    Tariffs

    Trade barriers
    Advantages of International
    Operations
    1. Firms can gain new customers for their
    products.

    2. Foreign operations can absorb excess capacity,


    reduce unit costs, and spread economic risks
    over a wider number of markets.

    3. Foreign operations can allow firms to establish


    low-cost production facilities in locations close
    to raw materials and/or cheap labor.
    Advantages of International
    Operations
    4. Competitors in foreign markets may not exist, or
    competition may be less intense than in domestic
    markets.

    5. Foreign operations may result in reduced tariffs, lower


    taxes, and favorable political treatment.

    6. Joint ventures can enable firms to learn the technology,


    culture, and business practices of other people and to
    make contacts with potential customers, suppliers,
    creditors, and distributors in foreign countries.
    Advantages of International
    Operations
    7. Economies of scale can be achieved from
    operation in global rather than solely
    domestic markets.

    8. A firm’s power and prestige in domestic


    markets may be significantly enhanced if the
    firm competes globally.
    Disadvantages of
    International Operations
    1. Foreign operations could be seized by
    nationalistic factions.

    2. Firms confront different PESTLED factors, and


    competitive forces when doing business
    internationally.

    3. Weaknesses of competitors in foreign lands are


    often overestimated, and strengths are often
    underestimated.
    Disadvantages of
    International Operations
    4. Language, culture, and value systems differ
    among countries, which can create barriers to
    communication and problems managing people.

    5. Gaining an understanding of regional


    organizations is often required in doing business
    internationally.

    6. Dealing with two or more monetary systems can


    complicate international business operations.
    The Global Challenge
    • Homogenization and loss of uniqueness.
    • A world economy and monetary system
    are emerging.

    • Markets are shifting rapidly and in many


    cases converging in tastes, trends, and
    prices.
    Globalization
    • Globalization
     process of doing business worldwide, so
    strategic decisions are made based on global
    profitability of the firm rather than just
    domestic considerations
    Globalization
    • Global strategy
     includes designing, producing, and marketing
    products with global needs in mind, instead
    of considering individual countries alone

     integrates actions against competitors into a


    worldwide plan
    Cultural & Communication
    Differences between Countries
    • To be successful in global markets, managers
    must obtain a better knowledge of historical,
    cultural, and religious forces that motivate and
    drive people in other countries.

    • For multinational firms, knowledge of business


    culture and communication variation across
    countries can be essential for gaining and
    sustaining competitive advantage.
    END

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