BUS 200 Lecture Notes - Lecture 13: Organizational Culture
Chapter 12 -
The Strategy of International Business
What actions can managers take to compete more effectively in a global economy?
Managers must consider:
• The benefits of expanding into foreign markets
• Which strategies to pursue in foreign markets
• The value of collaboration with global competitors
• The advantages of strategic alliances
Strategy and the Firm
A fir’s strategy can be defined as the actions that managers take to attain the goals of the firm
Typically, strategies focus on profitability and profit growth
Profitability refers to the rate of return the firm makes on its invested capital
Profit growth is the percentage increase in net profits over time
• Managers can increase the profitability of the firm by pursuing strategies that lower costs or by
pursuig strategies that add alue to the fir’s produts, hih eales the fir to raise pries.
• Maagers a irease the rate at hih the fir’s profits gro oer tie y pursuing strategies
to sell more products in existing markets or by pursuing strategies to enter new markets.
• To increase profitability, value must be created
o Value creation is measured by the difference between V (the price that the firm can
charge for that product given competitive pressures) and C (the costs of producing that
product)
• The two basic strategies for creating value are:
o Differentiation
o Low cost
• Value creation activities can be categorized as:
o Primary activities
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