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What causes industries to globalise?
- Government Drivers
- Cost Drivers
- Market Drivers
- Competitive Drivers
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How can you enter a country?
- Wholly owned Subsidiary
- Black Hole
- Implementer
- Contributor
- Strategic Leader
- Joint Venture - FDI
- Strategic Alliance - Equity and Non Equity
- Franchising
- Licensing
- Exporting
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What can you do to add value in a global landscape?
- Local Adaptation to market diff
- Exploit Global Economies of Scale
- Increase volume, dilute fixed costs from production
- Exploit Global Economies of Scope
- Increase portfolio, dilute other costs (non production)
- Optimal Locations for activities and resources
- Knowledge transfer across locations
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M&A
- 4 Keys for a successful M&A
- Strategic Fit
- Synergies (add value, reduce cost)
- Taxes, goodwill etc
- Cultural Fit
- More cost synergies more conflict
- Consider differences and similarities
- Price
- Multi methods, DCF & Multiples
- Managing the Process
- Be Silent - pre-deal, reduce distraction
- Keep Momentum - action plan and execute
- 100 day plan - be clear and urgent
- Be fair & Transparent - tell truth, execute negatives asap
- New Vision - overcommunicate
- One Org - Restructure with one org
- One Culture - clarity
- Integration team - full time empowered team on integrating
- BAU - Reduce distractions and blame
- Rigor & Human - Balancing both
How To Organise
- Organising Subsidiaries
- Role
- Strategic Importance of Local Environment
- Competence of local organisation
- Tool:Subsidiary Roles Matrix
- High Strat, Low Comp: Black Hole → Fix
- Low Strat, Low Comp: Implementer → Execute and report
- High Strat, High Comp: Strategic Leader → Focus and diffuse
- Low Strat, High Comp: Contributor → Help others
- Ensure HQ-Subsidiary relations have Due Process
- Explanation for Strat Decisions
- HQ familiar with local conditions
- Subsidiary able to challenge decisions
- Two-way communication
- Consistent decisions making practices across subsidiaries
- Overall Organisation Design
- Core
- Functional
- Multidivisional
- Matrix (mix)
- MNEs
- Tool: Integration - Responsiveness Framework
- High integration, low responsive: Global Strategy → Global Product Divisions
- High integration, high responsive: Transnational Strategy → Global Matrix / Frontend-Backend
- Low integration, low responsive: International Strategy → International Division
- Low integration, high responsive: Multinational → Area/Geographic Division
- Local vs Global Strategy or Glocal