文档介绍：International Business
Lecture 7
Strategy of International Business
Opening Case
Wal-Mart moved into other countries for three reasons
Growth opportunities at home were ing constrained
It thought it could create value by transferring its business model to foreign markets
It wished to preempt other retailers that were also starting to expand globally
Wal-Mart initially treated foreign markets much like the US; it did discover that this was not the correct approach
Prices 20% higher; difficult to sell ice skates, riding lawn mowers, leaf blowers, and fishing tackle.
Opening Case
To eed abroad, Wal-Mart has had to customize its offering to local conditions while keeping its core strategies and operations the same in every market
Going global has yielded additional benefits as well
Enhanced bargaining power with suppliers
The ability to transfer valuable ideas from one country to another
Strategy and the Firm
Strategy can be defined as the actions that managers must take to attain the goals of the firm
For most firms, the preeminent goal is to maximize the value of the firm for its owners
Profitability can be defined as the rate of return that the firm makes on its invested capital (ROIC), which is calculated by dividing profits of the firm by total invested capital
Profit growth is measured by the percentage increase profits over time
Strategy and the Firm
Value Creation
The way to increase the profitability of a firm is to create more value
The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products
Michael Porter states that there are two basic strategies for creating value and attaining petitive advantage in an industry
Low-cost strategy suggests that a firm has high profits when it creates more value for its customers and does so at a lower cost
Differentiation strategy focuses primarily on increasing the attractiveness of a product
Value Creation
Strategic Posi