What are the drivers of Globalization?
- Converging Consumer Preferences
- Declining Trade and Investment Barriers
- Technological Change
- New Competitors
What is FDI?
Foreign Direct Investment
What are the Dynamics of Global Competition?
- Higher intensity and scope of competition
- Competitors, Customers and Suppliers are global
- Cost pressure and demand to be present in many locations
What do the Dynamics of Value Chain contribute to?
- Globalization of a single value chain activity
- Fragmentation and global dispersion of entire value chain
- Following regional specialization in value adding
What are the Support Activities of the Value Chain Configuration?
- Firm Infrastructure
- Human Resource Management
- Technology Development
- Procurement
What are Primary Activities of Value Chain Configuration?
- Inbound Logistics
- Operations
- Outbound Logistics
- Marketing and Sales
- Service
What does the Global Value Chain Configuration offer?
- comparative cost advantages
- knowledge and learning advantages
- networking advantages
What are the strategic decision fields of global value chain configuration?
- Geographic Dispersion of value chain activities (Geographic Scope)
- Task dispersion (make, ally, or buy) value chain activities (vertical scope)
What is a MNE?
Multinational Enterprise
What factors do you need to consider when looking at concentration vs. dispersion of supply chain activities?
- Demand for goods (geographical location, need for local adaptation)
- Comparative advantages of countries (labor costs, know-how)
- Lot size of production output (Economies of scales, Learning effects)
- Transferability of goods (durability, transportation costs)
- Integration of supply chain activities
What are governmental interventions of MNEs?
- Tariffs and rationing of imports and exports
- Restrictions on transfers of earning and taxes
- Labor market regulation
- Local-content clauses
- Privileges in special economic areas
- Partially state-owned enterprises
What is the management implication of MNEs?
-Concentration of upstream activities (R&D, supply, production
-Dispersion of downstream activities (marketing, slaes)
(SLIDE 38)
What is the Internationalization Matrix cross-examining?
Benefits of Globalization vs Need for Localization
(SLIDE 39)
-High benefit, low need: Global: Integration Strategy
-High benefit, high need: Integrated Network: Interaction strategy
-Low benefit, low need: International: Selection Strategy
-Low benefit, high need: Multinational: Single Market strategy
