Friday, December 09, 2005

International Business Chapter 11 - international strategy - summary

Stages of identification and analysis

Process of identifying in selecting organizations objectives in deciding how the organization will achieve those objectives is called planning. In turn, strategy is the set of plant actions taken by managers to help a company meet its objectives.

As part of the strategy formulation process, managers must undertake to important steps -- identification and analysis. First, they identify the company's mission and goals. A mission statement is a written statement of why a company exists and what it plans to accomplish. Second, they identify the company's core competency in value creating activities. A core competency is a special ability of a company that competitors find extremely difficult or impossible to equal.

Managers can analyze and identify their company's unique abilities that create value for customers by conducting a value chain analysis -- a procedure that divides a company's activities into primary activities in support activities that are central to creating value for customers. Primary activities include inbound and outbound logistics, manufacturing or operations, marketing and sales, and customer service. Support activities include for infrastructure, human resource Management, technology development, and procurement. Finally, managers must analyze the cultural, political, legal, and economic environments.

International strategies, and the corporate level strategies companies use

some companies choose to follow a multinational strategy -- and adapting products and their marketing strategies in each national market to suit local preferences. Other companies decide that what suits their operations is a global strategy -- offering the same products using the same marketing strategy. In all national markets.

Companies involved in more than one line of businesses must formulate a corporate level strategy that encompasses all of the company's different business units. A growth strategy is designed to increase the scale or scope of the Corporation's operations. The exact opposite of a growth strategy is a retrenchment strategy, which is designed to reduce the scale or scope of corporations businesses. A stability strategy is designed to guard against change and is often used by corporations that are trying to avoid either prove or retrenchment. The purpose of a combination strategy is to mix growth, retrenchment, and stability strategies across a corporation's business units.

Business level strategies of companies and the role department level strategies.

Managers formulate separate business level strategies for each business unit. Most companies use one of the three generic business level strategies for competing in an industry. A strategy in which a company exploits economies of scale to have the lowest cost structure of any competitor in its industry is called a low-cost leadership strategy. Eight differentiation strategy is one in which a company designs its products to be perceived as unique by buyers throughout its industry. A focus strategy is one in which a company focuses on serving the needs of a narrowly defined market segment by being a low-cost leader, but differ aiding its product, or both. Achieving corporate and business level objectives, depends on effective department level strategies that focus on the specific activities that transform resources into products. Each department is instrumental in creating customer by you through lower costs or differentiated products. This is true of departments that conduct either primary activities or support activities.

Important issues influence the choice of organizational structure.

Organizational structure is the way in which a company divides its activities among separate units and coordinates activities between his units. Important to organizational structure is the degree to which decision-making in organization will be centralized

were decentralized. Centralized decisionmaking helps to coordinate the operations of international subsidiaries. The centralized decision-making is beneficial in fast-changing national business environments put a premium on local responsiveness.

When designing organizational structure, managers must consider the issues of coordination and flexibility. Every international company must design an organizational structure that clearly defined areas of responsibility and chains of command -- the lines of authority that run from top management to individual employees and specify internal reporting relationships.

International organizational structure.

An international division structure separates domestic from international business activities. I creating a separate division with its a manager. An international area structure organizes a company's entire global operations into countries or geographic regions, whereby each geographic division operates as a self-contained unit. A global product structure divides worldwide operations into product divisions, which are then divided into domestic and international units. A global matrix structure splits the chain of command between products and area divisions. Each product in employee reports to two bosses -- the general manager of the product division and the general manager of the geographic area.

Work teams are assigned the task of coordinating their efforts to arrive at solutions and implement corrective action. A self managed team is one in which the employees from a single department take on the responsibilities of the former supervisors. A cross functional team is composed of employees who work at similar levels in different functional departments. A global team is composed of top managers from both headquarters in international subsidiaries who meet to develop solutions to companywide problems.