MGMT 6041 Competing Globally

y What is the impact of agriculture Poverty has a different face now connected to obesity Ce bil have access to phone only U S bit toilet Shows how emerging markets are progressing differently now Also More connectedness Ex Mobile banking India and China skipped many steps are more savvy disruptive innovation takes us by surprise Largest consumer markets purchasing power LOTS yrs India and China will take over Dictatorships are better for international business there are more failed States hard to do business there because it is hard to tell who is making the decisions Which way is Globalization going Trade wars pushing to protectionism push for globalization from emerging markets 21st Century I Age of Asia China I destination for foreign direct investments International Business Always about more than one perspective In Europe lots of need to adapt lot's of borders In India also a need to adapt between States as well as international borders

Ex Difference Ford sourced different parts from places that had the best cheapest highest quality parts this can be different on a managerial basis So Globalization is integration and interdependence International strategy Global us localized multi domestic strategies Hi gfocus on similarities culture free products pair IIIIItimanas Drivers of Global Strategies focus on differences Regulation institutional differences cultural difference Arbitage a 4 of Benefits of local Strategies Fast food industry Example Roar thin margins need to t 7 y standardization y Economies of o Operations scale Supply chain Prominant visible brand more growth É selling food different tastes regulations presentation need to cater to local taste And maintain strong brand

The difference can have to do with different industries Different functions drive different strategies advertising adaptation thffirdmost ROD aggregation y when does a Labor arbitage AAA Triangle Adaptation Aggregation Rob to sales i dian Scores above the median priority Scones above 40M percentile shouldn't be ignored 100 Arbitage labor to sales

Empty Aggregation and Arbitage TCS Global network delivery model Three types of centers 1 Global centers large customers breadth depth of skill high scale India 0 China 2 Regional centers medium scale select capabilities language 6 culture competencies Uruguay Brazil Hungary 3 Near shore centers small scale customer comfort through proximity Arbitage and Adaptation cognizant Chameleon seems either Indian or 3 Pronged Strategy vs based Staffing Relatively stringent recruiting process More MBAs and consultants More non Indians Training programs in India for acculturation Delivery two global leads Ust India each proj All proposals done jointly More proximity to customers On site kick off teams intensive travel use of tech Marketing Joint positioning US nationals in key marketing positions very senior relation ship managers focus on selling to small number of large Customers

Firms also differ in their strategies Ex Auto Industry BMW Global standardisation o Artbibage Risks Niche luxury buyers is too narrow in hard economic times this can be trouble GM localized Strategy Adaptation Risks Quality can suffer brand can suffer Toyota In the middle transnational Has largely been successful Activity also varies in strategy Design Global Marketing 7 Both Preserve brand consistency o resonate with local tastes Sales and services localized Global Concentration Trends Carr o Collins CRY four companies combine to own 40 of the global market Certain industries become more concentrated some less over time Better than CRY strong competative position Ecolab has 12 of global market Context scenarios o Global Oligopolies Tools innovation scale or consolidation target pay off stogie

if you decide you should ignore a market for now keep in mind the reasons because they will help you compete when the context changes ie a competitor enters Phased entry can still benefit from a phased entry knowledge development etc Rapid Entry Joint ventures Opportunistic Entry Why not Nothing to lose lots of capital makes this possible Hassle Factor Decision makers decide it's too hard so don't enter a market Not strategic Don't fall into this trap Evaluate all the options Going Global Mode of Entry High low JV or an iPod to integrate w Global Ops Hightown wanting Even field Fquisition a ÉÉ I Ej E part low alliance Aquisition other dimensions effecting eetffortocatkowuse

strategic flexibility cont 3 Move beyond one shot deals focus on long term relationship 4 Be open to continual learning Emergence of Emerging Market MNCs Strategy Home country based advantage Example Local Optimizer Optimize products Tata motors for home market Lindia use local talent to wipro low cost partner engage in labor cost arbitage Global strong position in home leno Heier Consolidator market resulting in cemex strong cash flows Natural resource privileged access Petrobras vertical integrator to resources and large home market Chinalco

B Module 4 To do Read Bouquet HQ knows best if Lundbeck Korea case I watch Videos I session 4 key take away I finalize choice of company market for project F H Q knows Best Decentralize extreme two HQs ludeto ex problems unrealistic demands micromanagement misguided advice Lack of receptiveness to subsidiary ideas causes Inadequate to attention to emerging regions wrong quantity of support too much too little Limited upward influence for distant subsidiaries a insufficient Exchange among subsidiaries Don't talk to each other without orchestration by HQ Weak links with key stakeholders How to develop a more global view 1 A dust anatomy set up herbs with global mandates 2 A dust the physiology of the Organization use technology to connect organize forums other opportunities for people to come together

We need more strategies Developing two headquarters split top management team Equal distribution of inconvenience Call times that worked better for most In person meetings divided so travel was equal Shaving of knowledge cross regional working teams sharing opportunities The Results increased top management attention Greater subsidiary contributions Rich lateral exchanges Tighter local connections Results continue to shift need to continue adapting no strategies last forever Rly take aways Openness to changing structure commitment to fairness Affray willingness to operate virtually Module 4 Videos 3 tools for organizing globally or I Structure Anatomy org charts activity architecture Skeleton É É I systems processes Physiology information systems incentives t management development integration processes formal and Its informal

s al 8 É interpersonal communication athist II Culture Psychology Developer right mindset at HQ and subsidiaries Cools How do you know theses elements aren't working you are not getting information you need to get the job done These tools are the how The international Division CEO Pharma stages Dyes International T stage 2 Pharma Dyes Agro Company company chemicals tranes France 07 IT national Engine d access between has direct line international subsidiaries t m business to CEO F How wit d information be shaved across pordersth

my might take time for international division to earn legitimacy especially in late internationalizers when sales are 20 40 The Global Product Divisi CEO Pharma Agrochemicals Group Group Biotech Formulations Genetics Ba sic Belgium CUSA Research Chemicals Italy Belgium what assumptions are being made about knowledge in this firm There is no communications between business at the next level Departmentalization at the business level needs to be combined with cross fertilization between subsidiaries you don't want to find out from your customers Especially could get in the way of economies of scale

Global Functional Organization Ro D CEO production I Production Production Europe Marketing Marketing North North Europe America America In all this diagrams we cannot tell which box is more important Prof Entions are only Realbusinessexampystalkingtoooh From BU Business unit focused organisation Befts limited I BuPresident visibility to geography specific needs Geo lacked direct line mangenesL managers of sight to CEO na BUStrategic LGedFasedD

After International focused org structure Befetroved visibility to geography specific needs Established direct line of sight to CEO To SVP International BU FAI Accountable Functional Vice Presidents for total BU international performance Presidents Geo based finance Ét Ensures aligny with total Bo HR strategy geography μ leverage functional total company resources capitalize on cross business ties send message that international is important intentionally improve attention to geographic specific needs Eventually went back to old ways but the message was internalized and cultural expectations refocused BU managers supported geo specific needs

supp geo pec A simple matrix Business 0 Geography CEO Ra_VYMtmy TqD having Process need to align for this to work Front end Back end organization Backend functional focus Business front end Geographic sales and service

Korea Case I Anatomy should remain the same Good connection between countries keeping BA knowledge aligned II processes and culture should change Strategic priority initially wanted Korea to be standalone market know that these are important market Differentiated Centers of Exel lance Korea focused on high level clients other markets need different strategies Rajan can still function as a unifier bringing together ideas and facilitated knowledge transfers operational decisions could be given to subsidiaries Asymmetry is inevitable compromise focus more on cultural learning More direct communication between key markets and CEO He dotted line