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Original Post
The Agile Project Management (APM) framework and the PMBOK framework are approaches to project management. The APM framework focuses more on managing a project, while the PMBOK framework focuses more on project management tools and techniques (Bergmann & Karwowski, 2018). For example, a project characterized by ambiguous and changing user requirements, such as developing a new satellite-guided laser assault weapon system. This is an ideal candidate for the APM framework since it is ideally suited to handle the ambiguity and change involved in such a project. The reason for this is that the APM framework is more focused on the process of managing a project and, thus, is better able to adapt to changing requirements. On the other hand, the PMBOK framework is more suited for a project with well-defined requirements, such as constructing a new office building. This is because the PMBOK framework is more focused on project management tools and techniques and, thus, is better able to execute a project with well-defined requirements.
In general, I feel that the APM framework method is most suited for a project characterized by vague and changing customer needs, such as developing a new satellite-guided laser warfare weapon system (Binci et al., 2022). The APM framework is designed to deal with inherently uncertain projects that need to be able to adapt as new information arises. The PMBOK framework, on the other hand, is more suited to projects where the requirements are well understood and unlikely to change.
The APM framework starts with the idea of envisioning the project, and then theoretical work is done to generate ideas and possible solutions. The next phase is to explore these ideas in more detail and then to adapt the solution as new information arises. The project is then closed out once it is complete. This iterative, flexible approach is well-suited to projects where the requirements are unclear and likely to change (Moradi et al., 2019). The PMBOK framework, on the other hand, starts with the idea of defining the project scope. Next, work is done to create a project schedule and budget. The project is then executed, monitored, and closed out (Moradi et al., 2019). This more linear approach is better suited to projects where the requirements are well understood and unlikely to change.
References
Bergmann, T., & Karwowski, W. (2018). Agile Project Management and Project Success: A Literature Review.
Advances in Intelligent Systems and Computing,
783, 405414. https://doi.org/10.1007/978-3-319-94709-9_39
Binci, D., Cerruti, C., Masili, G., & Paternoster, C. (2022). Ambidexterity and Agile projectmanagement: anempirical framework.
The TQM Journal. https://doi.org/10.1108/tqm-01-2022-0011
Moradi, S., Khknen, K., & Aaltonen, K. (2019). Comparison of research and industry views on project managers competencies.
International Journal of Managing Projects in Business,
ahead-of-print(ahead-of-print). https://doi.org/10.1108/ijmpb-04-2019-0085
Discussion to respond to
Donell
Agile project management (APM), also known as iterative project management, focuses on delivering value often and releasing products incrementally over time by taking customer feedback into account at each integration .Recent developments in project management have led to the emergence of agile project management (APM). APM will replace traditional project management in the twenty-first century, according to some analysts. The agile project management methodology divides huge projects into smaller, more manageable tasks that are carried out and finished over the course of the project cycle in brief iterations, often lasting two weeks (Serrador & Pinto 2015) Teams that use the Agile methodology can adapt to shifting project needs, streamline the workflow, and ultimately finish their job more quickly. Teams in Agile can publish bits and pieces of their work, like deliverables, as they are finished. This makes it easier for teams to show that these deliverables or work segments bring value and that, if any adjustments are necessary, they can be made promptly or any flaws can be corrected (Moradi, Khknen, & Aaltonen, 2019). This is thought to help prevent significant project failures because it is done as part of continuous improvement and does so throughout the project lifecycle.
References
Serrador, P., & Pinto, J. K. (2015). Does Agile work?A quantitative analysis of agile project success. International journal of project management, 33(5), 1040-1051.
Moradi, S., Khknen, K., & Aaltonen, K. (2019). Comparison of research and industry views on project managers’ competencies.
International Journal of Managing Projects in Business,
ahead-of-print(ahead-of-print). https://doi.org/10.1108/ijmpb-04-2019-0085
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Discussion 3 to respond to
Sabrina Omar
yesterday at 2:39 PM
Hi Busayo,
I enjoyed reading your discussion post. The Agile Project Management framework is an iterative and interconnected technique of efficient project management during the whole lifecycle of the project. It successfully integrates the traditional aspects of project management with modern requirements within the scope of the project (Kissflow, para.1, 2021). Rather than concentrating only on the progress of the final product within the given constraints, the APM framework concentrates on bringing both value and quality under the same conditions. APM frameworks offers several advantages to users in both effectiveness and efficiency. In traditional project management theres several methods and integrating changes is hard (Kissflow 2021). Therefore, I agree with you that the APM framework process is most suited for a project categorized by uncertain and modifying user requirements. The greatest benefit it offers to the agile project management is the quick ability to change the direction of the project in order to meet the changing demands of the project (Kissflow, para.4, 2021). Also, the five stages of the APM framework openly correlate with the five phases of project management. As youve stated they are envision, speculate, explore, adapt, and close (Kissflow 2021).
Reference:
Kissflow. (2021). The 5 Phases of the APM Framework.Kissflow.Retrieved from
https://kissflow.com/project/agile/5-phases-of-the-apm-framework/
Discussion 3 to respond to Chynna
I agree with your standing on the APM method because of its greater flexibility, APM increases the likelihood that the project will be completed without significant changes or redos. More and more people are opting for the agile approach when it comes to managing projects. Sprint planning was designed for projects that need to change direction often and quickly. (Alexander & writer, 2017) Agile is a collaborative approach to project management that promotes quick responses to changing circumstances. Processes may be repeated; less risk is taken, feedback can be given in real-time, shorter turnaround time, and reduced complexity. Errors may be minimized by breaking down the job into smaller, more manageable pieces. There is a fundamental issue with the process, which is that it may lead to unachievable expectations since it needs to be properly understood. However, that body of information is the Project Management Body of Knowledge (PMBOK) framework approach. Users of this framework have access to a more extensive framework for controlling scope and other parameters. Alternatively, the Project Management Body of Knowledge (PMBOK) is the benchmark for project management procedures, vocabularies, best practices, and recommendations.
Alexander, M., & writer, C. (2017, February 28).Scrum vs. Lean vs. kanban: Comparing Agile Project Management frameworks. CIO. Retrieved October 26, 2022, from
https://www.cio.com/article/234378/compari
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Strategic Management week 5 Discussion
Global Strategies
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be a minimum of 300 words in length and you should respond to two additional posts from your peers. If you have not done so lately, please review the Rules of Discussion.
Understanding global strategies are critical to survival in a global market.Consider what are some global environmental trends affecting the choice of international strategies, particularly international corporate-level strategies.
chapter 7
Strategies for
Competing Internationally
or Globally
Arthur A. Thompson
The University of Alabama
Copyright 2020 by Arthur A. Thompson and Glo-Bus Software, Inc.
All rights reserved. Not for distribution to non-registrants without permission.
An e-book published and distributed
by McGraw Hill Education
Sixth Edition of Strategy: Core Concepts and Analytical Approaches (2020-2021). Arthur A. Thompson, The University of Alabama. Published and distributed by McGraw Hill Education. Image of globe comprised of puzzle pieces with several pieces dislodged and scattered below the globe. Chapter 5 The Five Generic Competitive Strategy Options: Which One to Employ
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You have no choice but to operate in a world shaped by globalization and the information revolution. There are two options: Adapt or die.
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Andrew S. Grove
former Chairman and CEO,
Intel Corporation
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You do not choose to become global. The market chooses for you; it forces your hand.
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Alain Gomez
former CEO, Thomson, S.A.
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[I]ndustries actually vary a great deal in the pressures they put on a company to sell internationally.
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Niraj Dawar and Tony Frost
Professors, Richard Ivey School of Business
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Learning Objectives
Learn why companies decide to enter foreign markets.
Understand why competing across national borders makes strategy-making more complex.
Learn the difference between multi-country competition and global competition.
Gain command of the strategic options for establishing a competitive presence in foreign markets.
Become familiar with the three main strategic approaches to competing internationally.
Learn how multinational competitors can use their international operations to improve their competitiveness.
Learn about profit sanctuaries and global strategic offensives.
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Chapter 7 Roadmap
Why Companies Decide to Enter Foreign Markets
Why Competing across National Borders Makes Strategy-Making More Complex
The Concepts of Multicountry Competition and Global Competition
Strategy Options for Entering and Competing in International and Global Markets
The Quest for Competitive Advantage in Global Markets
Profit Sanctuaries and Global Strategic Offensives
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Whether to customize the firms offerings in different country markets to match local buyer preferences or offer mostly standardized products worldwide
Whether to employ the same basic competitive strategy in all countries or to modify the strategy country by country to better match local market and competitive conditions
Where to locate facilities, distribution centers, and service operations to realize the greatest locational advantages
When and how to efficiently transfer some of a firms competitively powerful resources and capabilities from its operations in some countries to its operations in one or more other countries in order to better spearhead the companys strategic offensives to enter new country markets and to more effectively battle local rivals for sales and market share
Strategic Issues Unique to Competing across National Borders
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Competing Across National Borders
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Strategic Issues Unique To Competing Across National Borders
Whether to customize the firms offerings in each country market or to offer a mostly standardized product worldwide
Whether to employ the same basic competitive strategy in all countries or modify the strategy
country by country
Where to locate the firms operations
to realize the greatest location-related advantages.
When and how to transfer some of a firms competitively powerful resources and capabilities from its operations in some countries to its operations in one or more other countries in order to compete more effectively against local rivals
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A firm that competes in relatively few foreign countries is an international or multinational competitor
A global competitor has operations on several continents, is actively marketing its products or services in many different parts of the world, and is pursuing a strategy of expanding into additional countries
Typically, a firm will start to compete internationally by entering one or two foreign markets and then expand gradually or perhaps rapidly into the markets of other countries over time.
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International Competitors versus Global CompetitorsWhats the Difference?
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Why Companies Decide to Enter Foreign Markets
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To gain access to
new customers
To achieve lower costs and thereby become more cost competitiveness
To further exploit competitively valuable resources and capabilities
To spread business risk across a wider market base
To meet their customers needs abroad and retain their position as a key supply chain partner.
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The presence of important cross-country differences in buyer tastes, market sizes, and growth potential
The existence of sizable cross-country differences in wages, worker productivity, inflation rates, energy costs, taxes, and other factors that impact a firms costs and profit prospects
Differing cross-country governmental policies and regulations that make the business climate more favorable in some countries than others
The need to consider ways to mitigate the risks of adverse shifts in currency exchange rates
Why Competing Across National Borders Causes Strategy Making to Be More Complex
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Cross-Country Differences in Buyer Tastes, Market Sizes, and Growth Potential
Many cross-country factors affect an international or global competitors strategic decisions:
Country-to-country differences in population sizes, income levels, and other demographic factors that help drive market size and rates of growth in market demand
Country-to-country differences in buyer tastes
Country-to-country differences in distribution channels, competitive conditions, and other market-related factors
Perhaps the biggest market-related issue:
Whether and how much to customize offerings to match local buyers tastes and preferences in each different country market OR
Whether to pursue a strategy of offering a mostly standardized product worldwide
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Core Concept
The tension between the market pressures to localize a firms product offerings country by country and the competitive pressures to lower costs by offering mostly standardized products in all countries where it competes is one of the big strategic issues that firms operating in few or many country markets must address.
The managerial challenge in operating internationally or globally is tailoring a firms strategy to take a variety of country-to-country differences into account.
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Cross-Country Differences in
Operating Costs and Profitability
Country-to-country differences are often so large that a firms operating costs and profitability are significantly impacted by local factors such as:
Wage rates Worker productivity
Inflation rates Energy costs
Tax rates Government regulations
Cost advantages are gained by locating operations in countries with:
Low wage rates Less costly government regulations
Low taxes Low energy costs
Cheaper access to natural resources
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The Impact of Host Government Policies
on the Local Business Climate
Host government policies and attitudes of toward business create a favorable or unfavorable business climate for local firms and foreign firms.
Pro-business governments
Provide incentives for expansion-minded firms (lower tax rates, site location and site development assistance, government-sponsored worker training, seek the advice and counsel of business leaders)
Make the transition to more costly and stringent regulations business-friendly rather than adversarial
Anti-business governments
Tend to enact costly regulations and procedures, institute burdensome taxes, impose tariffs and/or quotas on imports, create uneven playing field that favors domestic companies, and pursue various other policies that make the local business climate less attractive to foreign firms
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Political Risks
Instability of weak governments
Civil unrest and revolt
Passage of anti-business legislation or regulations
Systemic corruption in governmental and business operations
Suspicion of foreign firms operating within their borders
Loss of assets to nationalization by socialist politicians
Economic Risks
Instability of the national economy and monetary systeminflation rates, deficit-spending, and economic distress
Threat of piracy
Lack of intellectual property protection
The Impact of Host Government Policies
on the Local Business Climate (continued)
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The Risks of Adverse
Exchange-Rate Shifts
Sizable shifts in currency exchange rates pose significant risks for two reasons:
They are very hard to predict because of the variety of factors involved and the uncertainties surrounding when and by how much these factors will change
Shifting exchange rates affect which countrieseither temporarily or long termrepresent the low-cost manufacturing location and which rivals have a temporary or longer-term cost-based competitive advantage because of the countries where their production operations are located
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Core Concept
Firms that export goods to foreign countries always gain in competitiveness when the currency of the producing country grows weaker relative to the currencies of countries to which the goods are exported.
A firm is competitively disadvantaged when the currency of country where its products are produced grows stronger relative to the currencies of countries to which its goods are exported and marketed.
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Consider the case of a firm with manufacturing facilities in Brazil (where the currency is realspronounced ray-alls) that exports its Brazilian-made goods to European Union markets (where the currency is euros).
Assume that the current exchange rate is 4 Brazilian reals for 1 euro and that the product made in Brazil has a manufacturing cost of 4 Brazilian reals (or 1 euro).
Now suppose that the exchange rate shifts from 4 reals per euro to 5 reals per euro (meaning that the real has declined in value and that the euro is stronger).
The Brazilian-made product is now more cost-competitive because a Brazilian-made good costing 4 reals has fallen to only 0.8 euros at the new exchange rate (4 reals divided by 5 reals per euro = 0.8 euros). The producer of the Brazilian-made good is better positioned to compete against European makers of the same good.
On the other hand, if the value of the real grows stronger in relation to the euroresulting in an exchange rate of 3 reals to 1 eurothe same Brazilian-made good formerly costing 4 reals (or 1 euro) now has a cost of 1.33 euros (4 reals divided by 3 reals per euro = 1.33), This puts a producer of the Brazilian-made good in a weaker competitive position versus European producers of the same good.
Clearly, manufacturing in Brazil to sell in Europe is more attractive when the euro is strong (a rate of 1 euro for 5 reals) than when weak and 1 euro exchanges for 3 reals.
Example: Who Gains and Who Loses
When Currency Exchange Rates Shift?
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When the exchange rate changes from 4 reals per euro to 5 reals per euro:
The Brazilian-made good that formerly cost 1 euro and now costs only 0.8 euros can be sold to European Union consumers for a lower euro price than before.
In other words, the combination of a stronger euro and a weaker real acts to lower the price of Brazilian-made goods in the European Union. This spurs sales of Brazilian goods and boost exports of Brazilian goods to Europe
Conversely, an exchange rate shift from 4 reals to 3 reals per euro makes a Brazilian manufacturer less cost competitive with European manufacturers of the same itemthe Brazilian-made good that formerly cost 1 euro and now costs 1.33 euros will sell for a higher price in euros than before, weakens European consumer demand for Brazilian-made goods and reduces Brazilian exports to Europe.
Brazilian exporters experience (1) rising demand for their goods in Europe whenever the Brazilian real grows weaker relative to the euro and (2) falling demand for their goods in Europe whenever the Brazilian real grows stronger relative to the euro.
Example: Who Gains and Loses When
Currency Exchange Rates Shift? (continued)
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The Impact of Exchange Rates on Domestic Competitors Competing with Foreign Rivals
Weaker dollar policies best serve U.S. manufacturers affected by low-cost foreign imports by:
Raising the dollar-costs of foreign goods produced in countries whose currencies have grown stronger relative to the dollar
Making foreign goods more expensive to U.S. consumerscurtailing demand for those goods and stimulating demand for
U.S. goods
Allowing U.S. goods to be sold at lower prices to consumers in countries with strong currenciesthereby stimulating exports to meet foreign demand for U.S. goods and creating U.S.-based jobs
Increasing the dollar value of profits a firm earns in foreign markets where local currencies are now stronger relative to the dollar
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Core Concept
Domestic companies facing competitive pressure from lower-cost foreign rivals benefit when their countrys currency grows weaker in relation to currencies of countries where lower-cost foreign rivals have their manufacturing plants.
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Questions for Company Co-Managers
When your simulation company is facing an unfavorable exchange rate change that negatively affects profitability in one or more geographic regions, should you and your co-managers:
Consider raising price or adjusting marketing efforts to reduce/eliminate the negative impact on earnings?
Consider temporarily curtailing sales and marketing efforts in the negatively affected regions and boosting sales efforts in regions where profits are favorably impacted by the exchange rate shifts?
Do nothing, absorb whatever adverse financial impact occurs, and suffer the consequences of lower earnings?
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When your simulation firm experiences a favorable exchange rate change that positively affects profitability in one or more geographic regions, should you and your co-managers:
Consider lowering price or boosting marketing efforts to increase sales and further exploit the positive impact on earnings in those regions where the exchange rate shifts are favorable?
Consider temporarily boosting sales efforts in regions where profits are favorably impacted by the exchange rate shifts and curtailing sales and marketing efforts in regions with unfavorable exchange rate impacts?
Do nothing and enjoy the benefits of whatever temporary boost to earnings occurs?
Questions for Company Co-Managers (continued)
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Global
competition
There Are Two Importantly Different Patterns of Competition in World Markets
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Multi-country
competition
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Core Concepts
Multicountry competition exists when competition in one national market is not closely connected to competition in any other national market. There is no global or world market, only a collection of self-contained country markets.
Global competition exists when competitive conditions across national markets are linked strongly enough to form a true international market and when leading competitors compete head-to-head in many different countries.
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Traits of Multicountry Competition
The countrys market is localized to that country and not closely connected to the market contest in other countries
Buyers in different countries are attracted to different product attributes
The numbers and identities of rival sellers vary from country to country
Industry conditions and competitive forces in each national market differ in important respects
Rival firms battle for national championships
and winning in one country does not necessarily signal the ability to fare well in other countries!
Copyright 2020 by Arthur A. Thompson and Glo-Bus Software, Inc.
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Traits of Global Competition
Prices and competitive conditions across country markets are strongly linked
Leading competitors compete head-to-head
in many of the same country markets
A firms competitive position in one country both affects and is affected by its position in other countries
A true global or world market exists
Competitive advantage is based on a firms world-wide operations and global standing
Rival firms in globally competitive industries
vie for global leadership (world championships)!
Copyright 2020 by Arthur A. Thompson and Glo-Bus Software, Inc.
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Maintain a national (one-country) production base and export goods to foreign markets
License foreign firms to use the firms technology or to produce and distribute the firms products in foreign markets
Employ a franchising strategy in foreign markets
Rely upon acquisitions or internal startup ventures to gain entry into foreign markets
Rely on strategic alliances or joint ventures with foreign firms as the primary vehicle for entering foreign country markets
Strategy Options for Establishing
a Competitive Presence in Foreign Markets
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Export Strategies
Using domestic plant capacity to produce goods for export to foreign markets is a good initial strategy to pursue international sales
Advantages
Is a conservative way to test the risks of international markets
Increases the utilization of existing capital investment in production facilities
Minimizes direct investments in foreign countries
An export strategy is vulnerable when:
Home country manufacturing costs are higher than the manufacturing costs that rivals incur in the countries where they have plants
Product shipping costs to distant markets are high
Adverse shifts can occur quickly in currency exchange rates
Importing countries impose tariffs or erect other trade barriers to protect local firms against competition from foreign-made goods
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Licensing Strategies
Licensing makes sense when a firm
Has valuable technical know-how or a unique patented product but lacks the organizational capability or resources to enter foreign markets
Desires to avoid risks of committing resources to markets that are unfamiliar, politically volatile, and/or economically unstable.
Can earn considerable royalties from licensees who are trustworthy and reputable
Disadvantage
Licensing firm risks providing valuable technical know-how to foreign firms and losing control over its usemonitoring the actions of foreign licensees and safeguarding the companys proprietary know-how is not always as easy as it might seem
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Franchising Strategies
Well suited to the global expansion efforts of service and retailing enterprises
Advantages
Franchisee bears in-country costs and risks of establishing foreign locations
Franchisor has to expend only the resources to attract, recruit, train, support, and monitor franchisees
Disadvantage
Maintaining quality control when franchisees in certain locations are not strongly committed to consistency and standardization
Issue: To allow localization or not
Should franchisees be allowed to make modifications in the franchisors product offering to better satisfy the tastes and expectations of local buyers?
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Acquisition Strategies
Acquiring a local business to compete internationally or globally:
Is quicker than creating a new subsidiary and having to build a new operating organization from the ground up
Is the least risky and most cost-efficient means of hurdling such entry barriers as gaining access to local distribution channels, building supplier relationships, and establishing relationships with government officials and other constituencies
Allows acquirer to move directly to the tasks of transferring resources and personnel, integrating and redirecting the acquired firm into its own operations, putting its own strategy in place, and building a stronger market position
The big issue an acquisition-minded firm must consider is
whether to pay a premium price to buy a successful local firm
or to buy a struggling competitor at a bargain price
(and then spend monies to boost its competitiveness).
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Internal Startup Strategies
Creating an internal startup (greenfield venture) to build a new business subsidiary from scratch makes sense when a firm:
Has foreign market operating experience in rapidly getting new foreign subsidiaries up and running and overseeing their operations
Can create the subsidiary for less cost than making an acquisition.
Can add the subsidiarys production capacity to the local market without adversely impacting the supplydemand balance in that market.
Can provide the subsidiary with the resources and capabilities needed to achieve the cost structure and competitive strength to battle local rivals head to head.
Can create a subsidiary with the resources and capability to gain good distribution access (in part, perhaps, because of the firms recognized brand name).
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Collaborative StrategiesAlliances and
Joint Ventures with Foreign Partners
Advantages of a Collaborative Strategy:
Enables a firm to benefit from a foreign partners familiarity with local government regulations, knowledge of the buying habits and product preferences of local consumers, distribution channel relationships, etc.
Facilitates capture of economies of scale in production and/or marketingcost reduction can be the difference that allows a firm to be cost-competitive
Enables joint sharing of distribution facilities and dealer networks which mutually strengthen each partners access to buyers
Facilitates learning and competence-building from performing joint research, sharing know-how, studying partners manufacturing methods, and understanding how to tailor sales and marketing approaches to fit local cultures and traditions
Directs partners competitive energies more toward mutual rivals and less toward one another; working together collaboratively both close the gap on leading companies
Encourages partners in reaching agreement on important technical standards
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Strategic Insight
Collaborative strategies involving alliances and/or joint ventures with foreign partners are a popular way for companies to gain entry into the markets of foreign countries (and, once it establishes a strong enough market foothold, to discontinue its participation in the alliance/joint venture and operate on its own).
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Strategic Insight
Cross-border alliances enable a growth-minded company to widen its geographic coverage and strengthen its competitiveness in foreign markets, while at the same time offering flexibility and giving a company some leeway in pursuing its own strategy and retaining some degree of operating control.
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Strategic Benefits of Cross-Border
Alliances and Partnerships
Alliances and partnerships allow a company:
To preserve its independence (which is not the case with a merger)
To retain veto power over how the alliance operates
To avoid using scarce financial resources to fund acquisitions
To retain the flexibility to readily disengage once the purpose of the alliance or partnership has been served or if its benefits prove elusive and avoid the cost of an acquisitions divestiture
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Knowledge and expertise of local partners may prove less valuable than expected
Communication, trust-building, and coordination costs are high in terms of managerial time
The potential for discord to emerge among cross-border allies
Language and cultural barriers
Diverse or conflicting operating practices
Conflicting objectives and strategies, differences of opinion about how to proceed, and/or differences in corporate values and ethical standards
Trouble working together or reaching mutually agreeable ways to proceed
It is risky to become overly dependent on another firm for essential expertise and competitive abilities over the long-term
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The Risks of a Collaborative Strategy
Strategic Issue:
Whether to vary a firms strategy and competitive approach to fit specific market conditions and buyer preferences in each host country OR
Whether to employ essentially the same strategy in all countries where the firm competes
Employ any one of three competitive strategy approaches to resolve this issue:
A localized multi-country strategya think local, act local approach
A global strategya think global, act global approach
A hybrid strategya think global, act local approach
Competing in Foreign Markets: The Three Competitive Strategy Approaches
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Core Concept
Multicountry or localized strategies involve tailoring a companys product offering and competitive approach to match differing buyer preferences, market conditions, and competitive circumstances in each country where it choses to compete.
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Strategic Insight
The bigger the competitive strategy variations from country to country, the more an international competitors overall strategy becomes a collection of localized country strategies.
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FIGURE 7.1 The Three Strategic Options for Competing Internationally: Option 1–Multicountry Strategies
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FIGURE 7.1 The Three Strategic Options for Competing Internationally: Option 2–Global Strategies (Continued)
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FIGURE 7.1 The Three Strategic Options for Competing Internationally: Option 3–Hybrid Strategies (Continued)
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Multicountry Strategies
A Think Local, Act Local Approach
A Think Local, Act Local approach is well-suited to situations where:
There are significant country-to-country differences in
Customer preferences, buying habits, and the product features required to be relevant and appealing to local buyers
Competitive circumstances (what it takes to compete effectively against rivals)
Distribution channels and marketing methods
Host governments enact regulations requiring products sold locally must be manufactured locally, meet strict manufacturing specifications or performance standards
Trade restrictions of host governments are so diverse and complicated they preclude a uniform, coordinated worldwide market approach
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The Pros and Cons of a Think-Local, Act-Local Approach to Strategy-Making
Advantages
Accommodates the differing tastes and expectations of buyers in each country to gain the most attractive market positions vis–vis local rivals
Grows global sales and market share by making product offerings more relevant and appealing to local buyers
Disadvantages
May raise production and distribution costs due to the greater variety of designs and components, shorter production runs, and the costs and complications of added inventory handling and distribution logistics
Is not conducive to building a single worldwide competitive advantage
Handicaps a firm in using its resources, competencies, and capabilities to speed entry into additional country markets because the assets required in one country may differ from those needed in another country
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Core Concept
A global strategy is one where a company
employs the same basic competitive approach
in all countries where it operates, sells much the
same products everywhere, strives to build global
brands, and coordinates its actions worldwide with
strong headquarters control.
It represents a think-global, act-global approach.
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Global Strategies
A Think-Global, Act-Global Approach
Best suited for globally competitive industries where the firms competitive approach can be fundamentally the same in all countries; such a high degree of similarity in cross-border strategy:
Promotes building a global brand name, since a firm can sell its brand name products everywhere (with minor local adaptations when necessary)
Facilitates building and strengthening a collection of competitively valuable resources and capabilities to underpin its global strategy
Facilitates quick, smooth cross-border transfer of ideas, new products, and competitively valuable resources and capabilities
Allows it to compete using the same capabilities, marketing, and distribution channels approaches worldwide
Grows the numbers of personnel with experience and know-how in implementing the strategy and conducting operations in foreign markets
Enables tightly integrating and coordinating strategic moves worldwide.
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Reasons to Use a Global Strategy
When Market Conditions Permit
A globally standardized product offering:
Enables capture of scale economies in manufacturing
Allows a company to focus on establishing a global brand image and reputation linked to the same product attributes in all countries
Facilitates concentrated effort on building a competitively powerful collection of resources and capabilities to secure a sustainable low-cost or differentiation-based competitive advantage over both local and global rivals
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FIGURE 7.2 How a Multicountry or Localized Strategy Differs from a Global Strategy
Access the alternate text for slide image.
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