Im2019.2.4
- 1. Theory
- 3. Uppsala internationalization model Johanson and Wiedersheim-Paul, 1975 No regular export (sporadic) Independent representatives (export modes) Foreign sales subsidiary Foreign production and sales subsidiary Market A Market B - Market N Increasing market commitment Increasinggeographic diversification
- 4. Companies
- 5. The transaction costs analysis model Coase, 1937, Williamson, 1985) Organization of international activities and the choice of international market entry mode 1 „If the transaction costs through externalization (e.g. through and importer or agent) are higher than the control cost through an internal hierarchical system, then the firm should seek internalization (hierarchies) of activities, i.e. implementing the global market strategy in wholly –owned subsidiaries. Or… if the friction between buyer and seller is too high then the firm should rather internalize, in the form of its own suubsidiaries.“(Hollensen, S., 2007) 2
- 9. Born Global
- 11. OLI
- 12. OLI
- 13. OLI
- 14. LLL
- 25. National Competitiveness “policy clusters” External Competitiveness •Openness to international trade Regulatory Competitiveness •Attractiveness of the domestic business environment •Regulation supportive of efficient markets Public sector Competitiveness Investment in infrastructure Security Education Dangers: ideological bias (“liberalisation”) lack of economic analysis Source: Weymouth and Feinberg
- 26. Theory Red Ocean Blue Ocean
- 29. Five Step Process 1. Find competitors 2. Find areas of competition 3. Chart red ocean 4. ERRC 5. Chart blue ocean
- 31. 2. Competition Lo price Speed Number of ingredients Cleanliness
- 32. 3. Create Red Ocean Strategic Canvas
- 33. 4. ERRC
- 34. 5. Create Blue Ocean Strategic Canvas
- 35. Theory Red Ocean Blue Ocean
- 37. Red Ocean • Intro band • Festivals
- 38. ERRC • Eliminate: Intro Band • Reduce: • Raise: Video, Meeting Band • Create: Snake Pit, local content
- 39. Blue Ocean • E: Intro Band • R: Video, Meeting Band • C: Snake Pit, local content
- 41. Theory Red Ocean Blue Ocean
- 44. 44 Porter’s five forces model 4- 44 Market Competitors Intensity of rivalry New entrants Suppliers Buyers Substitutes Market level Industry level
- 45. Factor conditions in Porter’s diamond Climate Physical infrastructure Natural resources Educational system Human resources Technological infrastructure Capital
- 46. Demand conditions in Porter’s Diamond Nature of home demand Size of home demand Economies of scale Transportation costs Buyer sophistication
- 47. A Sixth Force Complementors: Example: •Faster CPU chips fuel sales of personal computers. 2- 47
- 48. Complementor A player is a complementor if customers value your product more when they have the other player’s product than when they have your product alone. A player is your complementor if it’s more attractive for a supplier to provide resources to you when it’s also supplying the other player than when it’s supplying you alone.
- 49. Competitor A player is your competitor (substitutor) if customers value your product less when they have the other player’s product than when they have your product alone. A player is your competitor if it’s less attractive for a supplier to provide resources to you when it’s also supplying the other player than when it’s supplying you alone.
- 51. Collaborative Advantage – Burton’s 5 sources 2- 51 Industry collaborators Horizontal strategic alliances Suppliers Buyers Previously unrelated industries Substitutes and complements Prospective diversification alliances Related diversification alliances Relational contracting, quasi-integration Partnering w/ channels., buyers
- 52. Collaborative Strategy 2- 52 Industry environment Five sources model The firm Distinctive competencies vis-à-vis collaborators Strategic Choice Maximize collaborative advantage
- 53. Five forces of competition Five sources of collaboration Firm’s distinctive competencies Sustainable competitive advantage Sustainable collaborative advantage Composite strategy Maximize overall sustainable advantage PORTER BURTON
- 54. Slide 4.16 Figure 4.2 Illustration of customer value (perceived value) Source: adapted from Anderson et al. (2007, 2008); McGrath and Keil (2007); Smith and Nagle (2005)
- 56. The roots of performance and competitive advantage Resources Core competences competences Competitive advantage Performance Intangible Assets Tangible Assets
- 57. 4-57 Illustration of the core competence P 111
- 58. Game Theory & Strategy Game theory is a tool for understanding how decisions/actions by players in the value net affect each other. • - Play out all the actions/reactions into the future and then reason backward to determine appropriate actions today (assumes rational behavior). 1 The main practical use of game theory is to help a firm decide when to compete and when to co-operate. 2
- 59. The Value Net
- 60. Value Neg
- 61. Changing PARTS of the “Game” to Add/Capture Value • Players: customers, suppliers, substitutors (competitors), complementors, you (e.g., HSC asking for pmt to play) • Added Values: what each player brings to the game— raise your value added (e.g., TWA Comfort Class) • Rules: give structure to the game. Laws, customs, practicality, contracts. Using and revising rules to enhance the game. (e.g., MCC clauses) • Tactics: moves used to shape the way players perceive the game and hence how they play. (e.g., IB fee structure) • Scope: the boundaries of the game. It is possible to expand or shrink the those boundaries. (e.g., multi- market competition)
- 62. The Value Net Customers Competitors Complementors Suppliers Company Vertical Alliances Horizontal Alliances
- 63. Slide 4.27 Competitive Benchmarking profile Figure 4.1 Development of a firm’s international competitiveness (Continued)