International Business Strategy
Dr. Wu Zan
**What is International Business ?
- Business : Intergration of different functional areas (HR, Accounting, Finance, Strategy…) - International Business : business activities conducted across cultural and national boundaries. - Real life examples :
We are living the age of international business and globalization. Ex : Australia = its government is negociating a free trade agreement with China, its biggest international partner in business. In the past 50 years, Australia’s mining industry has been growing thanks to international business. This has been declining also because of international business in the past few years. But today, growth of international service industry : growth of travel, hotels, restaurants, finance, real estate, international students. - Scenario 1 : Ford (US) establishes manufacturing facilities in China. => FDI = Foreign direct investment.
- Scenario 2 : Australian BHP exports iron ore to China. => international trade (= Import/Export). -Scenario 3 : Motorola out-sources its after-sale services from India. India has a comparative advantage in IT,service-centers,… => international outsourcing. (=outsource service/resource from another country). Many companies are outsourcing R&D to other countries, ex : Apple has 5 R&D innovation and design buildings, only 1 is in the US. - Scenario 4 : Toshiba and Phillips establish alliance in R&D : international partnership in strategic R&D design and innovation.
**Why study International business ?
expertise in global strategy is highly sought after, and needed in every functional expertise in a business. International assignments in multinational corporations => we need preparation to go internationnally **HC Online : Do aussie managers think globally enough ?
Lack of innovation and incomplete global strategies.
**ATKearney : in top 10 of consulting companies
Their global Business policy Council has IB strategy expertise : to build international strategy strategies for companies.
** What is Strategy ?
We won’t discuss functional level strategies (marketing strategy…). Strategic management questions :
Why do some firms succeed while others fail ? (ex : Apple VS Nokia) Why some firms enjoy sustainable competitive advantage wile others don’t (ex : P&G) Formulation of strategy : what direction shall we take ? And then Make it happen : how to implement a strategy ? ** What determines the International Success or Failure of firms ? Fundamental question we’ll be able to answer after this course. ** Purpose of the Unit :
Develop understanding of the components of IB strategy.
** Semester Program :
Module 1 : Globalization and IB
Module 2 : Strategy and Global Strategy
Module 3 : IB Strategy
3 cases from ATKearney :
A leading European household goods manufacturer
A multinational packaged food company
For an integrated international apparel retailer
entry in market, recommendations for sales…
Tutorial participation (5%) & contribution (10%) : 15%
Final exam : 55%
Group consulting project : 30%
Consulting project :
* Attractiveness of the country’s market
* Competitors analysis
* Evaluate competitiveness of company
* Value proposition of the product
* Options of entry mode
* Select a location in the target country
* Key operational issues
=> Check Group project Guidelines under « Assessment » !
Module 1 : Globalization, International Business and MNCs
1. Globalization and implication
2. International business & motives
3. Multinational Corporations (MNCs)
4. Success triangle
5. Video Case study
**Value of world exports (=international export = X-M) tripled between 1980 ad 2000. FDI (foreign direct investment) grow more than twenty-fold. 51 of top 100 economic entities (countries or companies) are MNCs. Firms without international goals may find their domestic markets under threat from foreign competition....
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