Six More Weeks of Winter
Globalization
 Are
customers culturally/nationally diverse?
 Large percent of foreign revenue?
 Large percent of foreign assets?
 Are competitors global?
 Are owners, partners, suppliers global?
 How big is globalization?
 Who’s doing it? Why?
 What are companies actually doing? Why?
 Who is successful? Why?
Reasons to Go International
Proactive Reasons
Reactive Reasons
 Exploit factor-cost
 Competitive pressure
differences across
 Overcapacity
countries
 Declining domestic
 Unique product
sales
 Technological advantage
 Saturated home market
 Economies of scale
 Under attack from
 Growing foreign markets
foreign rivals
 Exclusive information
 Attack rivals on home turf
Going Global: Effect on Bottom Line
ROI
% Foreign Sales/
Total Sales
FDI in the U.S.
“The New American Challenge”
 Attractiveness
test?
 Performance test?
 Diagnosis of barriers to competitiveness
– Scale
– Entry mode
– Competitive response
FDI Modes and Choices
Scale Level
[Activity Type]
None
Sales
Distribution
Full Scale
Partner
Type
Ownership
WOS
Majority
Minority
None
None
Other
MNC
Local
Firm
Govt.
Factors/Issues of Globalization
Economic
Political
Cultural
Legal
Challenge to Global Managers
Vision,
Purpose,
& Goals
Strategy &
Intelligence
Cultural
Interpreter
Structure &
Configuration
Learning,
Cross-Pollination,
& Change
Competitive Forces
 First-mover
advantage eroding via local
competition in foreign markets
– Great Lakes’ Juicee and MingLang juice in China
– Wal-Mart/Seiyu stores in Japan
 Market
share dominance in U.S. under
continuous attack by foreign rivals located here
– Toyota, Honda, Nissan, Mercedes, BMW
– Nestles, Grand Metropolitan, Unilever
 “Made
in America…Who’s the Enemy?”