International Business

Monday 10th of October 2022

INTERNATIONAL BUSINESS DEVELOPMENT: SESSION 5

(Theory 3)

Organization structure

Multinational strategy

1. FSA/CSA framework is related to strategic management

Quadrant 1:

Need to competitive advantage

Quadrant 4:

Focus on your own resources

Quadrant 3:

Need to integrate both things

1. What is strategic planning?

Strategy is what is your goal and how do you get there. The path.

Planning is what steps do I need to do in order to get to the goal.

For example: I’m going from A to B (strategy) and the steps to get there is the planning.

So, strategic planning:

Identifying all the activities you need to do in order to achieve your goals

Strategic orientations

1. Predispositions 

Everyone has 1 of these 4 dispositions

1. Ethnocentric.

Ex: Heineken: my beer, Dutch beer, with a vision of being an international brand, most countries in the whole world. Whatever I do in the Netherlands it is going to be replicated in every country. The position of that beer is the same everywhere in the world.

1. Polycentric:

Exactly the opposite that ethnocentric. Whenever you go, in each country the McDonalds it is going to be different. Adapting to different markets

In between those 2 you have:

1. Regio centric: adapt to a region. Approach is going to be the same in different regions. Focused on regions.

1. Geocentric:

global approach, sell a global product for example. The tendency of a multinational to construct its strategic plan with a global view of operations

How to develop strategy?

You analyze the external environment – to do that: PESTEL (macro environment) ; 5 forces (micro environment)

1. Internal environment: benchmark: value chain: The process or activities by which a company adds value to an article, including production, marketing, and the provision of after-sales service.

Strategic formulation:

The process of evaluating the enterprise’s environment (opportunities and threats) and its external strengths and weaknesses (resources/capabilities)

1. External Environment Assessment:

• Information gathering; information assessment
• Macro (PESTEL), Meso (Market) and Micro-Environment (Industry)

1. Internal Environment Assessment:

• Physical resources and personnel competencies; value chain analysis
• Organization / Business

Place where you exchange product in a location

1. Macro / Meso Assessment

• Asking experts in the industry
• Using historical industry trends to forecast future developments
• Using computers to simulate the industry environment
• Do scenarios describing what they foresee

1. Internal Asseessment – Phycsical resources and personnel competencies

Physical resources are the assets the the MNE will use to carry out its strategic plan

The degree of integration that exists within the operating units of the MNE

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