Reflection
Ghan566
week_8_formulating_global_strategy.pptxFormulating Global Strategy
Why Go Global?
What reasons can you think of for a company to choose to move outside of its home region and go into the international realm?
Many Reasons
Domestic competitors entered foreign markets
Foreign competitors entered domestic markets
Economies of scale
Growth opportunities
Alliances, investors
Lower risk, less regulation, incentives
Steps for Global Strategies
Step 2: Assess External Environment
Environmental Assessment includes
Environmental Scanning
Continuous Monitoring
Environmental Scanning Levels
Global
Regional
National
Scanning Risks
Global Risks
Political
Wars
Economy
Financial
Shifts in consumption
Energy availability
Scanning Risks
Regional Risks
Political Instability
Economic Policies
National Risks
Legal
Trade Restrictions
Repatriation
Natural Disasters
Step 3: Internal & Competitive Analysis
Use models to assess
SWOT analysis: Internal relative to external
Strengths, Weaknesses, Opportunities, Threats
Key Success Factors: e.g. technological, distribution, promotion
Porter’s 5 Forces: competitive environment
Ease of entry, existing competitors, suppliers, buyers, availability of substitutions
Step 4: Global Strategic Alternatives
Global Strategy: one centralized strategy for global operations
Least expensive, least responsive to local needs
Transnational Strategy: strategic alliances localize some functions, e.g. sales, marketing, & service
Multi-Domestic Strategy: decentralized
Most expensive, most responsive to local needs
Step 5: Entry Strategy
Best strategy to enter foreign market?
High risk vs. low risk
Degree of control
Cost
Entry Evaluation
