5.1 Describe the value chain according to Porter.
A value chain is a set of activities that an organization carries out to create value for its customers. Divided into to activitiy categories, in primary activities and support activities.
Primary activites = Operations, R & D, Production, Sales and Marketing,
Support activities = Management ( Strategy & Planning, Organization, Human Ressources), Accounting & Reporting, Corporate Finance
5.2 Describe the strategy types in international competition
5.3 How does a national export-based strategy work?
Centralised
Value creation through Economies of Scope (lower cost production —> through wider range of products)
Medium relatedness between countries
Transferring skills and knowledge is competitive advantage
moderate need for coordination with few integrating mechanism and moderate need for cultural controls
5.4 How does the multinational/home replication strategy work?
Highly decentralised and locally responsive
Value creation through local responsiveness
Low relatedness between countries
Portfolio management is competitive advantage
Low need for coordination with little/no integrating mechanisms and little need for cultural controls
Advantages
Good adaptability to local markets
Limited coordination needs for
central management/ headquarters
Disadvantages
Redundancies (dev. of local strategy,
org. culture, processes)
Little incentive for collaboration(knowledge sharing)
Limited potential to achieve economies of scale
5.5 How does the global strategy work?
Highly centralised
Focused on efficiency
Value creation through economies of scale
High relatedness between countries
Resource sharing is competitive advantage
High need for coordination with many integrating mechanisms and high need for cultural controls
5.6 How does a transnational strategy work?
Locally responsive
Value creation through scale, scope and responsiveness
no national home
Varying relatedness between countries
Restructuring, sharing, transferring, and cocreation are competitive advantages; focused on efficiency, learning and sharing; balancing relatedness and unrelatedness
Very high need for coordination with very many integrating mechanisms and very high need for cultural controls
5.7 Would you internationally centralize production and why?
Advantage
1) Yes because of EOS
2) use the comparative advantage
3) easier to plan Production plan
protecting the global property
Disadvantage
1) dependent on one country
2) difficult to respond to changes in demand
5.8 Would you internationally centralize sales and why?
Sales is always interactive between people and culture. Focus is on the customer in the special country.
Show the customer one face. Standatasize Sales Representatives —> Speaking the same languages, have the same attitude
5.9 Would you internationally centralize HR and why?
interactive with its happenning at the place and often related to national laws, know labour laws to
5.10 Explain the AAA-triangle and give examples for the 3 dimensions.
Ghemawat so-called AAA framework offers three generic approaches to global value creation.
Adaption —> to adapt the product of a company to local needs and preferences, such as Mc Donalds in India for selling just Burger with chicken multinational Strategy
Aggregation —> Achieving EOC (VW and Toyota produce a lot of cars. (Global Strategy)
Arbitrage —> Reducing costs by using national advantage.
Apple , concentrate their Marketing in US
Production in Asia, Innovation ( Software and Design also in US.)
5.11 What are typical axes of a country portfolio? How can those be measured?
GDP growth and Income per Capita.
GDP growth the average
Income per Capita
=Total income
———————
population number (country)
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