Ib2_s1(2008) Derick Foo
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International Business Seminar 1 Tutor: Derek Foo
Tutorial – Readings and Cases Individual Presentation of Readings Duration: 10 minutes Use the suggested framework to prepare your analysis and presentation 4. A soft copy of the PowerPoint Presentation to be submitted (this may be posted for the benefits of the other students). This may be submitted to the University upon request 1. 2. 3.
Journal Analysis Framework Full bibliographical references (ie Author, date, title, journal etc) What is the subject/theme of this article? Is the article about organisational structure, marketing plans, international management, international teams etc? What business and/or management and/or marketing and/or other aspects does this article address?
Journal Analysis Framework What is the argument made by the author? That is, what are the points that the author makes (in your on words)?
How do this author’s views compare with what others have said on the same or similar topics? Have you read other articles on similar topics? Explain whether other authors agree or disagree with the ideas expressed in this article.
Journal Analysis Framework What are your own thoughts on the subject? What have you learned from this article? What issues has this article clarified for you?
Conclusion Do you agree or disagree with the writer? Are there any other points you feel the writer could have made? How does this article fit in with what you know about the subject being discussed?
Additional Readings/Cases Cases covered: Walmart’s Global Expansion, 12: 407 A Decade of Organisational Change at Unilever, 13: 440 Tesco Goes Global, 14: 479 FCX System, 15: 534 Microsoft: Outsourcing Xbox Production, 16: 555 Kodak in Russia, 17: 583
Case to be covered: Opening case Chap 18
Management focus articles: The Changing Strategy of General Motors, 428-429 International Expansion at ING Group, 482-3 Export Strategy at 3M, 539 The Jollibee Phenomenon: A Philippine Multinational, 486
Attendance 1) students are not allowed to sign attendance register on behalf of their classmates. *2) students are not allowed to attend half hour then leave class or leave class after tea break unless with reasons and inform SIM via email and lecturer accordingly *3) inform students to be punctual for class - if late only half hour allowed…latest in class by 7.30pm. 4) need to have 80% attendance - students to refer to handbook. *Reason will be considered on a case by case basis. Students are require to submit special circumstances form (this form can be found in student portal) with supporting documents. Reason not valid will be considered as absent.
Title: How Companies Win Out Name of Presenter: Derek Foo Group: A/B Date: 26 March 2008
How Global Companies Win Out Characteristics of Global Companies Significant benefits derived from worldwide volume Reduced unit costs Superior reputation or service
Economies of Scale achieved thru’ Larger production plants Longer production runs More efficient logistics networks Higher volume distribution network
How Global Companies Win Out Higher volume also means higher level of investment in R&D e.g. pharmaceutical, aircraft, semi-conductor industries Transportation cost dependent on product e.g. optical goods or chips vs steel bars or tractors
How Global Companies Win Out Factors against Global companies Economies of scale too modest – R&D spending too tied to particular market High product differentiation in country Emphasis on distribution, installation & local activities e.g. Automobile vs Auto Servicing. Short lead time e.g. fashion oriented, printing, food and perishables
How Global Companies Win Out Factors against Global companies (2) High transportation cost Government barriers Distribution – fragmented & hard to penetrate Low technology assembly companies Heavy raw-material processing industries Wholesaling & service business
How Global Companies Win Out Going Global? Consider: What kind of strategic innovation might trigger global competition? Is firm in best position among all competitors to establish & defend the advantages of global strategy? What kind of resources, and over how long a period, will be required to established the leading position? Can the firm be number one or number two?
How Global Companies Win Out Caterpillar: Obstacles Specs vary from country to country Expensive to transport Expensive to field distribution – financing, spare parts, repairs
Barriers against competitions Built by Navy Seal during WWII Dealer network that’s self-sustaining Worldwide production Scale in using components Assembly in major market
How Global Companies Win Out Caterpillar (2): Defending position Global strategy – lower cost & distribution Willingness to invest in manufacturing Willingness to commit to financial resources (3X komatsu) Alliance in Japan (20% of WW sales but yields 80% of Komatsu WW cashflow) to block Komatsu
How Global Companies Win Out L.M. Ericsson Strength/strategy in exploiting a technological niche Barriers to globalisation Telephone system unique in each country Low economies of scale High wages High R&D costs Large fixed cost too expensive for smaller telephone system Opportunity Change from hardware to software (60%) Modular system resulting in cost reduction and scalability of system
How Global Companies Win Out Honda Marketing 2 markets – Asia (small bikes), Europe & US (big bikes) Competition – BMW, Harley, Triumph Cash flow generated from growth Willingness to invest longer term (7 full years in Europe before profitable) What worked for Honda
How Global Companies Win Out Honda Marketing (2) What worked for Honda Marketing – bikes are reliable, inexpensive, easy to use Distribution network – 2000 dealership Brand loyalty Up sell Exploit EOS – centralised manufacturing and logistics Lower production cost + marketing/distribution =>higher volume => Profits
How Global Companies Win Out Conclusion: No one-size fit all strategy Economies of scale achieved differently Caterpillar – commonality of design, local assembly Ericcson – modular technology, software development Honda – worldwide marketing to homogenise worldwide demand
How Global Companies Win Out Conclusion (2): Competitive strategy Caterpillar – locates in Asia to track Komatsu Ericcson – ITT & Siemen Honda – flanking strategy (not going head-on) Yamaha, Kawasaki Other strategic considerations Pre-empting the leading positions in NIC Establish position with largest customer to block competition e.g. private label Japanese with Sears & Roebuck Differentiate prices among countries Manage independence Subsidiary as a single system rather than a portfolio Cashflow needs to be generated to block competitor
Tutorial – Readings and Cases Individual Presentation of Readings Duration: 10 minutes Use the suggested framework to prepare your analysis and presentation 4. A soft copy of the PowerPoint Presentation to be submitted (this may be posted for the benefits of the other students). This may be submitted to the University upon request 1. 2. 3.
Journal Analysis Framework Full bibliographical references (ie Author, date, title, journal etc) What is the subject/theme of this article? Is the article about organisational structure, marketing plans, international management, international teams etc? What business and/or management and/or marketing and/or other aspects does this article address?
Journal Analysis Framework What is the argument made by the author? That is, what are the points that the author makes (in your on words)?
How do this author’s views compare with what others have said on the same or similar topics? Have you read other articles on similar topics? Explain whether other authors agree or disagree with the ideas expressed in this article.
Journal Analysis Framework What are your own thoughts on the subject? What have you learned from this article? What issues has this article clarified for you?
Conclusion Do you agree or disagree with the writer? Are there any other points you feel the writer could have made? How does this article fit in with what you know about the subject being discussed?
Additional Readings/Cases Cases covered: Walmart’s Global Expansion, 12: 407 A Decade of Organisational Change at Unilever, 13: 440 Tesco Goes Global, 14: 479 FCX System, 15: 534 Microsoft: Outsourcing Xbox Production, 16: 555 Kodak in Russia, 17: 583
Case to be covered: Opening case Chap 18
Management focus articles: The Changing Strategy of General Motors, 428-429 International Expansion at ING Group, 482-3 Export Strategy at 3M, 539 The Jollibee Phenomenon: A Philippine Multinational, 486
Attendance 1) students are not allowed to sign attendance register on behalf of their classmates. *2) students are not allowed to attend half hour then leave class or leave class after tea break unless with reasons and inform SIM via email and lecturer accordingly *3) inform students to be punctual for class - if late only half hour allowed…latest in class by 7.30pm. 4) need to have 80% attendance - students to refer to handbook. *Reason will be considered on a case by case basis. Students are require to submit special circumstances form (this form can be found in student portal) with supporting documents. Reason not valid will be considered as absent.
Title: How Companies Win Out Name of Presenter: Derek Foo Group: A/B Date: 26 March 2008
How Global Companies Win Out Characteristics of Global Companies Significant benefits derived from worldwide volume Reduced unit costs Superior reputation or service
Economies of Scale achieved thru’ Larger production plants Longer production runs More efficient logistics networks Higher volume distribution network
How Global Companies Win Out Higher volume also means higher level of investment in R&D e.g. pharmaceutical, aircraft, semi-conductor industries Transportation cost dependent on product e.g. optical goods or chips vs steel bars or tractors
How Global Companies Win Out Factors against Global companies Economies of scale too modest – R&D spending too tied to particular market High product differentiation in country Emphasis on distribution, installation & local activities e.g. Automobile vs Auto Servicing. Short lead time e.g. fashion oriented, printing, food and perishables
How Global Companies Win Out Factors against Global companies (2) High transportation cost Government barriers Distribution – fragmented & hard to penetrate Low technology assembly companies Heavy raw-material processing industries Wholesaling & service business
How Global Companies Win Out Going Global? Consider: What kind of strategic innovation might trigger global competition? Is firm in best position among all competitors to establish & defend the advantages of global strategy? What kind of resources, and over how long a period, will be required to established the leading position? Can the firm be number one or number two?
How Global Companies Win Out Caterpillar: Obstacles Specs vary from country to country Expensive to transport Expensive to field distribution – financing, spare parts, repairs
Barriers against competitions Built by Navy Seal during WWII Dealer network that’s self-sustaining Worldwide production Scale in using components Assembly in major market
How Global Companies Win Out Caterpillar (2): Defending position Global strategy – lower cost & distribution Willingness to invest in manufacturing Willingness to commit to financial resources (3X komatsu) Alliance in Japan (20% of WW sales but yields 80% of Komatsu WW cashflow) to block Komatsu
How Global Companies Win Out L.M. Ericsson Strength/strategy in exploiting a technological niche Barriers to globalisation Telephone system unique in each country Low economies of scale High wages High R&D costs Large fixed cost too expensive for smaller telephone system Opportunity Change from hardware to software (60%) Modular system resulting in cost reduction and scalability of system
How Global Companies Win Out Honda Marketing 2 markets – Asia (small bikes), Europe & US (big bikes) Competition – BMW, Harley, Triumph Cash flow generated from growth Willingness to invest longer term (7 full years in Europe before profitable) What worked for Honda
How Global Companies Win Out Honda Marketing (2) What worked for Honda Marketing – bikes are reliable, inexpensive, easy to use Distribution network – 2000 dealership Brand loyalty Up sell Exploit EOS – centralised manufacturing and logistics Lower production cost + marketing/distribution =>higher volume => Profits
How Global Companies Win Out Conclusion: No one-size fit all strategy Economies of scale achieved differently Caterpillar – commonality of design, local assembly Ericcson – modular technology, software development Honda – worldwide marketing to homogenise worldwide demand
How Global Companies Win Out Conclusion (2): Competitive strategy Caterpillar – locates in Asia to track Komatsu Ericcson – ITT & Siemen Honda – flanking strategy (not going head-on) Yamaha, Kawasaki Other strategic considerations Pre-empting the leading positions in NIC Establish position with largest customer to block competition e.g. private label Japanese with Sears & Roebuck Differentiate prices among countries Manage independence Subsidiary as a single system rather than a portfolio Cashflow needs to be generated to block competitor
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