Global Issues in Strategic Management

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Global Issues in Strategic Management
Determinants of Org. Performance

Global Issues Prof. Dr Majed ElFarra 2009

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The key drivers to globalization
Drivers:
Global market Convergence
Similar customer needs, Global customers, Transferable marketing

Trade policies, Technical GovernmentStandards, host government, Global Influence policies Strategies

Scale economies, Sourcing efficiencies Cost Countries costs, Advantages High product development costs

Interdependence, Competitors global High exports/imports, Global Competition

Global Issues Prof. Dr Majed ElFarra 2009

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Advantages & Disadvantages of International Operations
1. 2. 3. 4. 5. Advantages: Foreign operations can absorb excess production capacity, the benefits: Allows firms to establish low-cost production facilities. May be less competition Reduce tariffs Enables firms to learn technology and other cultures Global Issues Prof. Dr Majed ElFarra 2009 ٣

Advantages & Disadvantages of International Operations
Disadvantages: 1. Firms confront with different cultures, sometime they cannot understand the rules of game. 2. Dealing with different monetary systems can complicate international bus.

Global Issues Prof. Dr Majed ElFarra 2009

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Global challenge
1. How to gain and maintain exports to other international markets. 2. How to defend domestic markets against imported goods.

Global Issues Prof. Dr Majed ElFarra 2009

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Guidelines for Success as a Global Competitor
Robert Allio mentioned guidelines for customer loyalty and market share: 1. Get to know global markets first. 2. Counterattack at home for parent firms (attack them at their homes). 3. Invest in new technology. 4. Consider alternative sources, e.g., establish in low labor cost. Global Issues Prof. Dr Majed ElFarra 2009 ٦

Guidelines for Success as a Global Competitor (continue)
5. Install the right management at host countries. 6. Sacrifice short-term profit for longterm profit. 7. Join...
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