Globalization F2014 PDF

Strategic Management
WEEK 8
Please stow all laptops and electronic devices

Today’s Agenda…


Globalization rationale



Global market entry tactics



Degrees of international coordination/centralization



Some global market and infrastructure challenges



Putting it all together



Grolsch Case Preps



MT#1 Results

Why Go Global?
Many Reasons Are Similar To
Diversification Rationale…
But There Are Some Differences
In How Things Play Out
For Businesses Across The Globe…

Globalization Rationale
 To

Hedge Risk…

– Boom/recession cycles of varied economies must be accounted for …
Also need some flexibility to maneuver around tariffs (or political instability)
(Good Resources For Forecasts and Warnings: State Dept. briefings, www.stratfor.com.)

– Currency markets move in different ways... Current race to the bottom?
 The Challenge: BMW brings less Euros home when Euro is strong …
 Tactics: Continuous currency hedging, shifting center-of-gravity toward other markets.

USD
REF: http://www.xe.com/

CNY

Globalization Rationale
 To



Using profits in one market to compete vigorously in another.

 Build presence, launch ads and promos…  Aggressive pricing  Antidumping backlash

 To


Cross-Subsidize…
Save $$$...

if Scale Economies or Location-Based Savings can be attained

Globalization Rationale
Ex1: BMW Is Serious About Learning
& Recruiting The Best Minds

To Learn...

BMW

CU ICAR Information:

See: http://www.greenvillehd.com/video/greenville-sctechnology/clemson-univerisity-cuicar/ (4:00-4:59)

Globalization Rationale

Ex2: Organizations Can Learn Via “Reverse Innovation”
Wireless Banking – Kenya
Telemedicine and Low Cost
No minimum balance, low transaction Medical Devices – China and India costs, no brick-and-mortar, no ATMs
Car and Ride Sharing – Zimbabwe

P&G single-serve sachets
(coffee, toothpaste, shampoo) –
Bottom of pyramid  Recessionplagued Greece, Spain, US

Prepaid Phone Plans – India

Microlending – India  Citigroup

See