rise and fall of berlin wall

Topics: Leadership, Strategic management, Core competency Pages: 20 (3938 words) Published: April 21, 2014
Lecture 9 notes:

What is internationalization and what is the outcome – slide 9 – lecture 9

Internationalization is not a new phenomenon, occurring for centuries – (Sparrow, Brewster & Harris 2004)

Reasons for internationalization – pressure for growth to satisfy investor pressure and/ or management ambition

Vertical scope (what range of vertically linked activities should the firm encompass/ Horizontal scope (how specialized already in terms of product range)

NB – Diversifying is a risky strategy – this leads to market development, by selling existing products to new markets (Ansoffs Matrix)

Tesco generally encompasses market development, whereby selling existing products on new markets

Grant 2010 p 370 – quotes about internationalization benefits (expanding opportunity for both consumer and business) – competitive and efficient

Bartlett states that international management is now a common practice, seize opportunity and gain wider market exposure

We can these the push/pull factors – (Read an article on these factors)

Bartlett et al (1995) – traditional vs. emerging motivations

Ghosahal and Barlett – main readings

We need evaluate whether the growth is sustainable and are the effects either positive or negative

Internationalization not always successful, in Taiwan but in America suffered loss making from ‘Fresh & Easy chain’

Different industries have different patterns of industry internationalization Grant (2010) – from chart Tesco and the ‘packaged groceries industry ‘ has high foreign direct investment but experiences a lower level of international trade

Services are now also going international (consulting and universities e.g.)

Supply chain management is key for internationalization, define it and discuss for Tesco (find an article) – products are sourced globally, i.e. different plane parts are sourced globally

Internationalization is not a new phenomenon, occurring for centuries – (Sparrow, Brewster & Harris 2004)

However been increased and speeded up due to several factors – reduced transport costs/ more sophisticated supply chain management/liberalization of trade barriers/greater legal harmonization

Evidence that countries are losing out from globalization/internationalization such as China and India

Watch Friedman, T. L. YouTube videos - argues that the world is a level playing field “the world is flat” – as a result of shared technology, similar access, such as outsourcing, Google, Smartphone etc.

Levitt, T. The Globalization of Markets. Slide 22 – The worldwide success of a growing list of products that have become household names is evidence that consumers the world over are becoming more similar despite cultural differences

Product experiences standardization and customization – particularly Tesco products, products sold in Taiwan by Tesco might be customized, i.e. local spice or delicacy in that country repackaged and sold by Tesco but might not be sold by Tesco somewhere else

Analyzing the costs and benefits of internationalization – were Tesco’s international strategy beneficial or costly slide 27-28

Results –

Using Porter’s five forces, can determine if Tesco has been profitable, does Tesco have a larger bargaining power and dominate the market, or weak and threat of more localized substitutes

In terms of Tesco’s profitability, analyze whether they are now making as much internationally as domestically in terms of figures – revenue/profit margins

Slide 30 – increased industry rivalry/ increased intensity of competition/ Profitability; internationalization tends to reduce an industry’s margins and rate of return on capital - analyze each factor of Porters 5 forces for Tesco

Slide 31 – Industrialization not always deemed successful as graph shows – Ghemawat 2003 – domestic businesses tend to have higher operating margins

Wal-Mart – didn’t understand the German market, or have sufficient economies of...
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