Strategy Implementation : Global Strategy
Materi 9 24 Nop 2024
UNIVERSITAS ISLAM DR KHEZ MUTTAQIEN FAKULTAS EKONOMI DAN BISNIS
Issues Global Business
• International Entry
• International coordination
• Stages of international development
• International employment
• Measurement of performance.
Global Strategy
• Global Strategy is the sum total of the activities
that an organization takes in order to compete in
markets outside its home country
International Entry
• Exporting handle all critical functions itself or it could contract these functions to an export management company
• Licensing under a licensing agreement to produce and/or sell a product, the licensee pays compensation, company does not have sufficient funds to finance its entering the country directly, the technology is unique and not easily replicable
• Frincising open a retail store using the franchiser’s name, the
franchisee pays the franchiser a percentage of its sales as a royalty, the ability of the franchisor to expand rapidly with minimal capital investment McDonald’s
• Joint ventures combine the resources and expertise needed to develop new products or technologies, reduces the risks of expropriation and harassment (perampasan dan pelecehan) by host country officials, enable a firm to enter a country that restricts foreign ownership, fewer assets at stake and lower risk
• Acquisitions purchasing another company already operating in that area, strong complementary product lines and a good distribution network.
International Entry
• Green field development build its own manufacturing plant and distribution system, more freedom in designing the plant, choosing suppliers, and hiring a workforce Nissan, Honda, Toyota, BMW
• Production sharing (outsourcing) process of combining the higher labor skills and technology available in developed countries with the lower-cost labor available in developing countries merupakan sarana untuk mengatasi keterbatasan modal, teknologi, dan sumber daya manusia
• Turnkey operations metode pelaksanaan proyek yang dikerjakan oleh kontraktor secara penuh, mulai dari perancangan, pembangunan, hingga penyelesaian. Setelah proyek selesai, kontraktor akan menyerahkan hasil proyek kepada klien dan siap digunakan
• Built on Transfer (BOT) merupakan salah satu variasi dari turnkey operation yaitu perjanjian kerja sama antara pemegang hak atas tanah dengan pihak swasta untuk mendirikan bangunan dan fasilitas di atas tanah tersebut. Pihak swasta kemudian dapat menggunakan bangunan dan fasilitas tersebut selama jangka waktu tertentu, setelahnya tanah dikembalikan kepada pemilik (negara)
• Management contract proses mengelola kontrak, hasil akhir, tenggat waktu, ketentuan, dan syarat kontrak. Tujuannya adalah untuk memastikan bahwa semua pihak mematuhi kontrak dan hasil pekerjaan terpenuhi sesuai kesepakatan.
International Cordination
• Elements of International Strategic Alliances that lead to success
•
A
multinational corporation (MNC) highly developed international company with a deep involvement throughout the world, a worldwide perspective in its management and decision making.
•
challenge of achieving scale economies through standardization while at the same time responding to local customer differences
•
Strategic alliances may complement or even substitute for an
internal functional activity.
International Strategic Alliance
• Strategic alliances, such as joint ventures and licensing agreements between an MNC and a local partner
• Key success is selection of the local partner
• develop a level of trust, which facilitates openness in sharing knowledge and a reduced fear of opportunistic behavior by the alliance partners
• Key drivers for strategic fit between alliance partners :
a) partners must agree on fundamental values and have a shared vision about the potential for joint value creation.
b) alliance strategy must be derived from business, corporate, and functional strategy
c) alliance must be important to both partners, especially to top management.
d) partners must be mutually dependent for achieving clear and realistic objectives.
e) joint activities must have added value for customers and the partners.
f) the alliance must be accepted by key stakeholders.
g) partners contribute key strengths but protect core competencies
Stages of international development
• Stage 1 (Domestic company) The primarily domestic company exports some of its products through local dealers and distributors in the foreign countries
• Stage 2 (Domestic company with export division) establish its own
sales company with offices in other countries to eliminate the middlemen and to better control marketing
• Stage 3 (Primarily domestic company with international division) establish manufacturing facilities in addition to sales and service offices in key countries, adds an international division with responsibilities for most of the business functions conducted in other countries
• Stage 4 (Multinational corporation with multidomestic emphasis) company increases its investments in other countries, establishes a local operating division or company in the host country, product line is expanded, and local manufacturing capacity is established, managerial functions (product development, finance, marketing, and so on) are organized locally, parent
company acquires other related businesses, broadening the base of the local operating division, develops a strong regional presence, achieves greater autonomy and self-sufficiency
• Stage 5 (MNC with global emphasis) The most successful MNCs move into a fifth stage in which they have worldwide human resources, R&D, and financing strategies
International Employment
• multinational corporations (MNCs) are now putting more emphasis on intercultural training for managers being sent on an assignment to a foreign country
• MNC performs at a higher level when its CEO has international experience
• a set of recommendations to improve the entire expatriation process:
a) Have a compelling reason for sending a current employee to a new country.
b) Choose individuals who are open to the assignment and committed to adapt to the new environment.
c) Assign sponsors/mentors in both the home country and the new country.
d) Develop a means of maintaining very open, frequent communication throughout the assignment.
e) Design a plan for repatriation
f) Craft an approach for sharing the experiences and lessons learned within the company.
• hires and promotes people from the host country into higher-level positions
• use people with an “international” orientation, regardless of their country of origin or host country assignment.
• stealth expatriates product and SBU managers who are based at corporate headquarters are often traveling around the world to work personally with country managers, they are either cross-border commuters, the accidental expatriate who goes on many business trips or temporary assignments due to offshoring and/or international joint ventures
