国际商务课件 Lecture 5 Strategy Choices
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Dorothy Hawkins June 2014
Porter’s Value Chain
International expansion may allow reconfiguration of the value chain to increase profitability by developing global synergies
Dorothy Hawkins June 2014
This week
We will look at more analysis tools to assist with making decisions on the available strategic choices within an international context.
Question Marks low share of a fast-growing market. Need more cash than they can generate themselves to keep up with the market.
Dorothy Hawkins June 2014
• Technical economies: related to an increase in the size of the plant or production unit.
• Non-technical (enterprise) economies: related to an increase in the size of the enterprise (business unit) as a whole.
GOVERNMENT
CHANCE
Dorothy Hawkins June 2014
Porter’s Diamond of National Advantage
Porter argues that firms are most likely to succeed in industries or industry segments in which the four sources are favourable.
He also argues that the sources in the diamond form a mutually reinforcing system in which the effect of one determinant or source is dependent on the state of the others.
Institutional Strategies
The aim of cross-border mergers and acquisitions is to create synergy (2+2 = 5).
Dorothy Hawkins June 2014
Institutional Strategies
• The organisation’s portfolio of products is subjected to a detailed analysis according to market share, growth rate and cash flow.
Dorothy Hawkins June 2014
Dorothy Hawkins June 2014
Product-Market Strategies - Ansoff
Increasing risk
Increasing risk
Dorothy Hawkins June 2014
Competitive Strategies
Competitive advantage is defined by Porter as the additional added value the more successful firms in an industry are able to generate vis-à-vis the most marginal firm in that industry.
International Business
Module Leader : Sandra Selmanovic Module Lecturer : Dorothy Hawkins
So far . . .
We have taken a broad overview of globalisation (Week 1), looked at open innovation, methods, risks and theories of international trade (Weeks 2 and 3) and some analysis tools for developing international strategy (Week 4).
Porter’s Generic Strategies
Dorothy Hawkins June 2014
Porter’s Generic Strategies
– help position the firm to its best advantage. Overall cost leadership strategy
PRODUCT PORTFOLIO ANALYSIS
Dorothy Hawkins June 2014
PRODUCT PORTFOLIO ANALYSIS
Stars - high market share, high growth, limited cash flow due to substantial investment required to maintain growth. Successful stars go on to become cash cows.
Dorothy Hawkins June 2014
Porter’s Diamond of National Advantage
Strategy, Structure and Rivalry
Factor Endowments
Demand Conditions
Related and Supporting Industries
Cost-based synergies – horizontal acquisitions = economies of scale in production, in R&D and in administrative, logistical and sales functions.
Revenue-based synergies – horizontal or vertical acquisitions enable companies to develop new competencies
Dorothy Hawkins June 2014
Competitive Advantage
Potential factors for creating competitive advantage – Architecture (a more effective set of contractual relationships with suppliers/customers) – Incumbency advantages ( such as reputation, branding, scale economies) – Access to strategic assets (such as raw materials, wavebands, scarce labour inputs) – Innovation ( in product or process, protected by patents, licences) – Operational efficiencies (such as quality circles, just-in-time techniques, re-engineering)
Dorothy Hawkins June 2014
Three categories of strategy
1. Product–market strategies – which determine where the organisation competes and the direction of growth (e.g. Ansoff).
Dorothy Hawkins June 2014
PRODUCT PORTFOLIO ANALYSIS
• The Boston Consulting Group’s portfolio matrix provides a useful framework for examining an organisation’s own competitive position.
Dorothy Hawkins June 2014
WHERE should the firm compete?
Porter identified six key sources of national competitive advantage :
• Demand conditions • Factor conditions • Firm strategies: structures and rivalries • Related and supporting industries • Government policies • Chance.
2. Competitive strategies – which influence the action/reaction patterns an organisation will pursue for competitive advantage (e.g. Porter).
3. Institutional strategies – which involve a variety of formal and informal relationships with other firms usually directed towards the method of growth (e.g. acquisition versus. organic).
Dorothy Hawkins June 2014
Synergies from M&A
Dorothy Hawkins June 2014
Cost-based synergies
• Economies of scale: Increase in global size of firm can provide economies of scale, i.e. a fall in long-run average costs.
– seeks to be the lowest cost provider. Differentiation strategy
– seeks to create something unique Focus strategy
– seeks to identify a particular market segment and to dominate that segment.
Cash cows high market share, slow growth, very positive cash flow that can be used to develop other products.
Dogs low share of a slow-growth market. Can be made profitable at the expense of cash reinvestment, and thus generate little for otng tail . .
Porter’s Value Chain
International expansion may allow reconfiguration of the value chain to increase profitability by developing global synergies
Dorothy Hawkins June 2014
This week
We will look at more analysis tools to assist with making decisions on the available strategic choices within an international context.
Question Marks low share of a fast-growing market. Need more cash than they can generate themselves to keep up with the market.
Dorothy Hawkins June 2014
• Technical economies: related to an increase in the size of the plant or production unit.
• Non-technical (enterprise) economies: related to an increase in the size of the enterprise (business unit) as a whole.
GOVERNMENT
CHANCE
Dorothy Hawkins June 2014
Porter’s Diamond of National Advantage
Porter argues that firms are most likely to succeed in industries or industry segments in which the four sources are favourable.
He also argues that the sources in the diamond form a mutually reinforcing system in which the effect of one determinant or source is dependent on the state of the others.
Institutional Strategies
The aim of cross-border mergers and acquisitions is to create synergy (2+2 = 5).
Dorothy Hawkins June 2014
Institutional Strategies
• The organisation’s portfolio of products is subjected to a detailed analysis according to market share, growth rate and cash flow.
Dorothy Hawkins June 2014
Dorothy Hawkins June 2014
Product-Market Strategies - Ansoff
Increasing risk
Increasing risk
Dorothy Hawkins June 2014
Competitive Strategies
Competitive advantage is defined by Porter as the additional added value the more successful firms in an industry are able to generate vis-à-vis the most marginal firm in that industry.
International Business
Module Leader : Sandra Selmanovic Module Lecturer : Dorothy Hawkins
So far . . .
We have taken a broad overview of globalisation (Week 1), looked at open innovation, methods, risks and theories of international trade (Weeks 2 and 3) and some analysis tools for developing international strategy (Week 4).
Porter’s Generic Strategies
Dorothy Hawkins June 2014
Porter’s Generic Strategies
– help position the firm to its best advantage. Overall cost leadership strategy
PRODUCT PORTFOLIO ANALYSIS
Dorothy Hawkins June 2014
PRODUCT PORTFOLIO ANALYSIS
Stars - high market share, high growth, limited cash flow due to substantial investment required to maintain growth. Successful stars go on to become cash cows.
Dorothy Hawkins June 2014
Porter’s Diamond of National Advantage
Strategy, Structure and Rivalry
Factor Endowments
Demand Conditions
Related and Supporting Industries
Cost-based synergies – horizontal acquisitions = economies of scale in production, in R&D and in administrative, logistical and sales functions.
Revenue-based synergies – horizontal or vertical acquisitions enable companies to develop new competencies
Dorothy Hawkins June 2014
Competitive Advantage
Potential factors for creating competitive advantage – Architecture (a more effective set of contractual relationships with suppliers/customers) – Incumbency advantages ( such as reputation, branding, scale economies) – Access to strategic assets (such as raw materials, wavebands, scarce labour inputs) – Innovation ( in product or process, protected by patents, licences) – Operational efficiencies (such as quality circles, just-in-time techniques, re-engineering)
Dorothy Hawkins June 2014
Three categories of strategy
1. Product–market strategies – which determine where the organisation competes and the direction of growth (e.g. Ansoff).
Dorothy Hawkins June 2014
PRODUCT PORTFOLIO ANALYSIS
• The Boston Consulting Group’s portfolio matrix provides a useful framework for examining an organisation’s own competitive position.
Dorothy Hawkins June 2014
WHERE should the firm compete?
Porter identified six key sources of national competitive advantage :
• Demand conditions • Factor conditions • Firm strategies: structures and rivalries • Related and supporting industries • Government policies • Chance.
2. Competitive strategies – which influence the action/reaction patterns an organisation will pursue for competitive advantage (e.g. Porter).
3. Institutional strategies – which involve a variety of formal and informal relationships with other firms usually directed towards the method of growth (e.g. acquisition versus. organic).
Dorothy Hawkins June 2014
Synergies from M&A
Dorothy Hawkins June 2014
Cost-based synergies
• Economies of scale: Increase in global size of firm can provide economies of scale, i.e. a fall in long-run average costs.
– seeks to be the lowest cost provider. Differentiation strategy
– seeks to create something unique Focus strategy
– seeks to identify a particular market segment and to dominate that segment.
Cash cows high market share, slow growth, very positive cash flow that can be used to develop other products.
Dogs low share of a slow-growth market. Can be made profitable at the expense of cash reinvestment, and thus generate little for otng tail . .