IB 150 Lecture Notes - Lecture 17: Preempt, Hamburger University, Multinational Corporation

39 views6 pages
IB 150 – Lecture 17
Strategy of International Business
Corporate Strategic Vision
Companies that make things happen
Companies that watch things happen
Companies that wonder what had happened
Global 500 Companies
Only 23 countries in the world had an economy larger than half a trillion US dollars in 2016.
Only 32 countries had over a third of a trillion (e.g., UAE, Norway, Austria, Thailand) in 2016,
cf.
Nature of Strategic Competition
During the last half of the twentieth century, many barriers to international trade fell and a
wave of firms began pursuing global strategies to gain a competitive advantage.
Understand the industry, competition, consumer
To be successful, managers first must understand the nature of global industries and the
dynamics of global competition.
They should also know the types of strategies to pursue in different settings.
The Purpose of a Firm
Purpose of a Firm is to make a Profit
Firms engage in “Value Creation” Activities
Prices consumers pay = Value of product to consumers
Profit = Price - Cost of producing the product
How do Firms Increase Profits?
Low Cost Strategy
Increase efficiency of production, marketing, materials management, R&D, information
systems, firm infrastructure to reduce costs.
Easiest strategy
Differentiation Strategy
Improve quality, provide service, customize product -> higher prices.
Persuade consumers to believe you have a better product, so you have a
Strategy is about how a firm can best create values (profits).
find more resources at oneclass.com
find more resources at oneclass.com
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 6 pages and 3 million more documents.

Already have an account? Log in
The Firm as a Value Chain
Profiting from International Expansion
Firms that operate internationally are able to:
Transfer Core Competencies
Realize Location Economies
Realize Experience Curve Economies
Expanding Globally allows firms to increase profits in ways that can not be done domestically
Transfer Core Competencies
Skills that make the firm unique
International competitive advantage
Realize additional returns due to utilizing such skills on an international basis
These skills exist in a firm’s value-creation activities, e.g.,
Production, Marketing, R & D
Human Resources, Management
Finance, Material management
McDonald’s Hamburger University
February 24, 1961, Hamburger University's first class of 14 students graduated
Today, more than 5,000 students attend Hamburger University each year
Since 1961, more than 80,000 restaurant managers, mid-managers and owner/operators
have graduated from this facility
The Disney Institute
Disney is probably the most successful theme park operator in the world.
It operates 5 theme parks worldwide.
The next one is to open in Shanghai, China
Realizing Location Economies
Firm must locate where economic, political, cultural conditions and factor costs are most
conducive to performing the firm’s activities
Location Economies-locating a value creation activity in the optimal location for that
activity will lower costs or enable firm to differentiate product
Create a Global Web-locating value creation activities globally lowers cost and/or
differentiates product to allow for a competitive advantage
Experience Curve Economies
find more resources at oneclass.com
find more resources at oneclass.com
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 6 pages and 3 million more documents.

Already have an account? Log in

Get OneClass Notes+

Unlimited access to class notes and textbook notes.

YearlyBest Value
75% OFF
$8 USD/m
Monthly
$30 USD/m
You will be charged $96 USD upfront and auto renewed at the end of each cycle. You may cancel anytime under Payment Settings. For more information, see our Terms and Privacy.
Payments are encrypted using 256-bit SSL. Powered by Stripe.