Global Strategy: Dr. Mohammad Hamsal
Global Strategy: Dr. Mohammad Hamsal
Global Strategy: Dr. Mohammad Hamsal
Strategy
4. Intensity of Rivalry
Different nations characterized by different management ideologies
Strong association between vigorous domestic rivalry and the
creation and persistence of competitive advantage in an industry
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Location economies
Economic benefits from performing a value creation activity in the
optimal location
Leveraging the skills of global subsidiaries
Applying these skills to other operations within firms global network
Companies typically
choose among the
four main global
strategic postures
when competing
internationally.
The appropriateness
of each strategy
varies with the extent
of pressures for cost
reduction versus
local responsiveness.
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Localization Strategy
International Strategy
As competition intensifies,
companies need to orientate
toward either a Standard
Globalization or a Transnational
strategy.
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2. Licensing
A foreign licensee buys the rights to produce a companys product
for a negotiated fee; licensee puts up most of the overseas capital.
3. Franchising
Franchising is a specialized form of licensing. The franchiser not
only sells intangible property, but also insists that franchisee agrees
to follow strict rules as to how it does business.
4. Joint Ventures
Typically a 50/50 venture a favored mode for entering a new market
5. Wholly-Owned Subsidiaries
Parent company owns 100% of subsidiarys stock setup or acquire
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Technological know-how
Wholly-owned subsidiary is preferred over licensing and joint
ventures to minimize risk of losing control.
Management know-how
Franchising, joint ventures, or subsidiaries are preferred as risk
is low of losing management know-how.