Foreign Market Entry
Strategy IV
International Business Strategy
301REN
Unit: 8 Knowledgecast: 2
Module Learning Outcomes
• Integrate and apply strategic approaches to
practical situations in various types of
organisations
• Assess current developments in the organisational
environment and alternative responses related to
strategy
• Resolve management problems in the area of
strategic management by evaluating alternative
outcomes
International Strategic Alliance
Types of International Strategic
Alliance between Non Competing Firms.
International Expansion Alliance
For expansion into new geographical location
Vertical Integration Alliance
Between supplier and buyer
Diversification Alliance
Between companies in different line of business.
International Strategic Alliance
Types of International Strategic
Alliance between Competitors.
Complementary Alliance
Contributing various assets and capabilities for joint
endeavour
Shared Supply Alliance
Collaboration to achieve economies of scale
Quasi-concentration Alliance
Contributing similar assets and capabilities to develop
product
Strategies’ Success Criteria (SAFS)
Suitability : does the strategy address
the organisation’s strategic position ?
Acceptability: do the expected
performance outcomes meet
expectations (re ROI or risk)?
Feasibility: will the strategy work in
practice?
Sustainability: is the strategy
ecologically and socially sustainable ?
Suitability of strategic options
Acceptability
• Acceptability focuses on the expected
performance outcomes of a strategy.
• Performance outcomes can be
assessed on the basis of THREE
CRITERIA:
- Return
- Risk
- Stakeholder reactions
Criteria for assessing Acceptability
Feasibility
Feasibility is concerned with whether
an organisation has the resources
and competences to deliver a
strategy.
- Financial Resource
- Human Resource
- Physical Resource
- Intangible Resource
- Competences
Sustainable development
• Sustainable development is
development that “meets the needs of
the present without compromising the
ability of future generations to meet
their own needs”
( Bruntland Commission, UN 1987)
Sustainable Development
Sustainable Development can be broken
down in 3 separate frameworks:
- Environmental sustainability
- Economic sustainability
- Socio-political sustainability
Sustainability
Sustainability of competitive advantage:
- Sustaining low price advantage
- Sustaining differentiation advantage
- Sustaining hybrid advantage
Knowledgecast Summary
• Integrate and apply strategic approaches to practical
situations in various types of organisations
• Assess current developments in the organisational
environment and alternative responses related to strategy
• Resolve management problems in the area of strategic
management by evaluating alternative outcomes
Seminar
Mini case: Autolatina: International Partnership
(closing case Chapter 15 of required text)
1. What were Ford’s motive and objectives Evaluate the extent to
which Ford accomplished these objectives.
2. What type of the collaborative venture did Ford enter with
Volkswagen? What were the advantages and disadvantages
from Ford’s perspective?
3. What strength did Ford and Volkswagen bring to the Autolatina
venture? Did these firms have any weaknesses? Elaborate
4. Did Ford commit any blunders in its Latin America operation?
Specify
5. What can other managers learn from Ford’s experience
regarding international collaborative venture?
Group Activity
Challenges of Licensing and Franchising
Read opening case - Harry Potter: The Magic of
Licensing on page 463 (required text)
Read Global Trend discussion- Internationalization
of Franchising: Emerging Markets on page 473
(required text)
Read closing case – Subway and the challenges of
Franchising in China on page 482 (required text)
Group Activity
Requirement
1. Answer the questions the follow
2. Compare and contrast the challenges and risk
of Franchising and Licensing
3. Recommend either alternatives (franchising
and Licensing) as entry mode for any
Telecommunication organisation or your choice
to any emerging market with clear justification.