Welcome to Week 13!
Entrepreneurship: Chapter 7 - 8
Ashton Converse
Restructuring and International Strategy
Objectives and Schedule
 Welcome – Share about weekend
 Great thanksgiving, orphanage, and more
 Review
 Collect Homework
 Finish Chapter 7 and Discovering Restructuring
 Start Chapter 8 and International Strategies
 Use understandings to complete team tasks
and further our business plans
Welcome
 Thanksgiving!
 Orphanage Trip!
 Watched Thor with Grace!
 The Ohio State Football Team is
Undefeated
 Relaxed a little…but stayed busy
 Started to LISTEN TO CHRISTMAS MUSIC!
Review
 What is Thanksgiving about?
 Why do most U.S. Americans celebrate
Thanksgiving?
 What TV show did we watch last week?
 2 weeks ago we talked about diversification,
what is diversification?
 What is a merger?
 What is a takeover?
 What is an acquisition?
Collect Homework
 Please pass your Business Plan homework for the
Amazing Race show, forward.
 I will collect all of them.
 Did you enjoy the Amazing Race?
 Is this a good activity to do in class?
 Any improvements?
Discover Restructuring
Cost of New Product Development
 Developing new products successfully requires
large investments within a firm’s resources
 Time
 Money
 Equipment
 Resources
 This makes it difficult to make a quick profit
 Meaning, new product development takes time
to earn profit
Restructuring and More
Acquisition May Be the Better Answer
 Another way a firm can gain profit
 Gain access to new products without developing
the production process
 Quick access to new product markets
 Possible path to enter international markets
 Lower risk and increased diversification
 Helps define the companies competitive scope
 Gives company new abilities and opportunities
Problems in Successful Acquisition
 Integrating to companies together can create
many conflicts
 Can create a broader target and ruin the
companies successful focus
 May increase or create company debt
 Synergy may not be present (working together)
 Too much diversification…no direct goal
 Too large of company can open more costs
 More time and energy needed from managers
Restructuring
Strategy through which a firm changes its set of
businesses or its financial structure
 Restructuring comes from many possible events
 Company Growth or Decrease in Size
 Opportunities for possible higher profits
 Need to survive and stay in business
 Changing products for success
 Bored or have too much money
 Desiring more power…and more
Restructuring Continued
Downsizing
 Now seen as a restructuring strategy instead of a
business failure
 Downsizing is a decrease (reduction) in the number
of firm’s employees and sometimes its operating
units
Downscoping
 Set of actions that causes a firm to refocus on its
core businesses
 Maybe they will ignore or get rid of (eliminate)
other businesses
Restructuring Via Shareholders
 What is a shareholder?
 Someone who invested in the company
 They purchased stock
Leveraged Buyouts
 Restructuring strategy that corrects managers
mistakes or self-centered decisions
 Caused by not looking at shareholders interests
 Used to help expand the company
Welcome to Chapter 8
Read “Shanghai Automotive Industry Corporation:
Reaching for Global Markets” on page 174-175
 When you have read through the article, discuss
with 2 to 4 other people about what you read:
 Your Thoughts about the Article
 Maybe what you learned
 What you thought to be good
 Etc…
Thinking Internationally
International Strategy:
 Strategy through which the firm sells is goods
or services outside its domestic market
Discuss with 2 to 4 people the following topics:
 Why would companies want to sell
internationally?
 Think of at least 3 advantages to selling
internationally. Write them down.
 Think of at least 3 disadvantages to selling
internationally. Write them down.
Business Plan Application
Take time now to work on your business plans and
talk with your team
 Make sure to discuss the following areas:
 Contact information: address, cell #, QQ, email,
and more
 Times when the team can meet outside of class
 Use a log sheet to document when you meet
 Letter to City of proposal plan
Welcome to Day 2 of Week 13!
Objectives/Schedule:
 Welcome
 Review
 International Strategy Skills and Concepts
 Business Plan Practice
 Application and Challenge Assignment
Review
 What did we discuss yesterday?
 Downsizing
 Downscoping
 International Strategy
 Advantages and Disadvantages of international
strategy
 Shareholders
 Leveraged Buyouts
 Develop New Products
Business Plan Application
Take time now to work on your business plans and
talk with your team (15 minutes)
 Make sure to discuss the following areas:
 Contact information: address, cell #, QQ, email,
and more
 Times when the team can meet outside of class
 Use a log sheet to document when you meet
 Letter to City of proposal plan
International Strategy Continued
Four Benefits of International Strategy
1. Increased Market Size
 How is a larger market size good for a company?
2. Return on Investment
 What type of investments do we mean?
3. Economies of Scale and Learning
 Global economies of scale allow for companies to
do what?
4. Location Advantages
 How can a different location be an advantage?
Choosing an International Strategy
Companies get to decide to use one or both basic types
of international strategies. Can you guess what they are?
1. International Business-Level Strategy
 The resources and capabilities established in the home
country usually allow the company to use the strategy
into markets outside their country.
2. International Corporate-Level Strategy
 Focus on the scope of a company’s operations through
both product and geographic diversification
 Required when the company operates in multiple
industries and multiple countries or regions
 Multidomestic, global, and transnational (3 types)
International Corporate-Level
Strategies
Multidomestic Strategy:
 International strategy which decisions are centered
to the strategic business in each country
 Helps them form the products to the local market
 Example: McDonalds, KFC, and more!
Global Strategy:
 International strategy where firm offers standardized
products across the different country markets.
Transnational Strategy:
 International strategy which the firm seeks to achieve
both global effeciency and local responsiveness
Choices of International Entry Modes
1. Exporting
1. High cost, low control
2. Licensing
1. Low cost, low risk, little control, low returns
3. Strategic Alliances
1. Shared costs, shared resources, shared risks, problems of
integration
4. Acquisition
1. Quick access to new market, high cost, complex
negotiations, problems of merging with domestic
operations
5. New Wholly Owned Subsidiary
1. Complex, often costly, time consuming, high risk, maximum
control, potential above-average returns
Converse about Concepts
International Diversification
 Strategy which a firm expands its sales of its goods or
services across the borders of global regions and
countries into different geographic location or markets
1. Provides potential for firm to achieve greater returns
on their innovations
2. Reduce some risks of investments
3. Provides desire to innovate
4. Boost performance and resources use
Difficult, Limited, and Risky
What are some Problems that managers may have when trying
to manage multinational companies?
1. Become to complex
2. Too large to watch over
3. Cost becomes too high, higher than benefits
4. Too many cultures to keep up with
5. Competition is too fierce (difficult)
6. Instable currencies (always changing)
7. Change in laws and rules
8. Political Risks
9. Economic Risks
Business Plan
What Your Team Should Already Have Completed:
 Company Name
 Mission Statement
 Vision Statement
 Competitive Advantage
 Location
 Investors
 Contact Information
 Time to Meet Up…start keeping a log
Presentation Work: Investors
Plan a Presentation for The Investors and Community
involved in your Company! Include the following: (make
in PowerPoint…about 10 minutes total)
 Company Name and Introduction
 Importance of Company (Why?)
 What the Company Does (reason)
 How it will help the community/city
 Business Goals for the First 5 Years
 How you are different than other companies
(competitive advantage)
 Who will fund you (the investors)
 What do the investors get in return?