1.

Organizational Structure
- Phân tích hiện tại số lượng khách hàng đang có sự đa dạng hóa về nhu cầu
=> Competition pressure về marketing tăng => Pressure to adapt tăng
=> Cần sự linh hoạt hơn trong mar và distribution trên các thị trường
- International Division Structure đang không phù hợp
2. Staffing Policies
- “Thuê nhân viên” => Không phải Staffing (chỉ dành cho Top Management)
- Mỗi policies có thể dùng được cho nhiều chiến lược
- Không có dữ liệu => Căn cứ vào OS
- Nên sử dụng Staffing gì? (Geocentric/Regional)
- Cần sự tiêu chuẩn hóa vì sản xuất ở một nơi duy nhất => Yêu cầu về bảo
mật, sự linh hoạt của nhân sự tại địa phương, nhân công clc, đáp ứng được
khả năng bán hàng => Geocentric
- Regional: phụ trách nhóm các quốc gia trong khu vực
3. Strategy
- Căn cứ vào 2 áp lực (giảm giá, thích nghi)
- Cách DN đang làm thỏa mãn/không thỏa mãn áp lực nào
- International strategy: “export”, “subsidiaries activities” giống hệt chính
quốc, đầy đủ các phòng ban
- Global strategy: xảy ra khi hoạt động điều hành và bán theo chính sách
chung của công ty, “subsidiaries in the world” không giống hệt ở chính quốc;
trên thực tế không có Global hoàn toàn mà Global theo nhóm thị trường
- Transnational: trong quá trình sản xuất, value creation activities phải được
thực hiện ở nhiều quốc gia => áp lực trong quá trình tạo ra sản phẩm
I. Opportunities - IB1
- Đánh giá tính khả thi của thị trường (kim tự tháp one word, macro, 5 forces)
- Đánh giá khách hàng mục tiêu
- Điểm giao của thị trường có => Nên làm gì (what you are, what do you have,
what the market have)
II. Entry Modes
 - Chọn entry modes cần quan tâm tới: product category, sale volume, life
cycle, resources - gắn liền với DN
- Điều kiện thị trường về mặt cạnh tranh: mức độ cạnh tranh, reputation of the
firm in that market
III. Reasons for international business
- Tình huống: DN ở home country đang gặp khó khăn gì => Chuyển sang thị
trường nước ngoài thì giúp optimize revenue/minimize cost thế nào?
IV. Production management (De hay Cen, Outsource hay Inhouse, tự
sản xuất linh kiện hay mua ngoài linh kiện - SS Apple)
- Phân tích đặc điểm sản phẩm, nguồn lực tạo ra sản phẩm, mức độ cạnh
tranh, nguồn lực của DN
- Cen: sản phẩm có bí quyết CN cao, nguồn lực sản xuất yêu cầu cao, nguồn
linh kiện quý hiếm, điều kiện ngặt nghèo mà chỉ một ông đáp ứng được
=> High level of integration, quản lý chiều dọc tốt, giữa các khâu, bảo vệ CN
=> Gắn với In-House, tránh di chuyển nguồn lực (tránh tăng chi phí)
- De: gắn liền với Outsource, nhiều cơ sở sản xuất trên thế giới, mỗi địa điểm
sản xuất phục vụ 1-2 thị trường nhất định, phải là 1 thằng chi phối toàn bộ thị
trường mới có thể làm như vậy
=> Không phải tự bỏ ra nguồn lực
=> Ảnh hưởng tới CN, tạo ra đối thủ mới, phải đảm bảo quy tắc về chất lượng
và quản lý, không chủ động dự báo được rủi ro khi sản xuất
=> Hạn chế (ví dụ DN sản xuất thuốc lá)
- DN thường áp dụng cả 2 (core - tự sx).
V. Context of International Business
- Globalization
 - Chọn QG ntn để outsource/decentralize, được lợi gì từ globalization

CHAP 13: THE STRATEGY OF INTERNATIONAL BUSINESS

I. STRATEGY OF THE FIRM

- SME - small and medium-sized company (<500 in US, <250 in Europe)
- A firm’s strategy can be defined as the actions that managers take to attain the
goals of the firm (often is to maximize the value of the firm for its owners and
shareholders).
➔ Must pursue strategies increasing the profitability and rate of profit growth overtime.

- A firm has high profits when it creates more value for customers (differentiation) and
does so at a lower cost (low cost strategies).
The Firm as a Value Chain
 R&D
- designs of products and production processes
- service companies also undertake (banks)

Production
- creation of a good/service
- creates value by performing activities efficiently so
lower cost result
Primary Activities
Marketing & Sales
- through brand positioning & advertising (Ford)
- through discovering customer needs and
communicating back to R&D (Pfizer)

Customer Service
- provide after-sale services and support (Caterpillar)

Information System
- the electronic systems for managing inventory,
tracking sales, pricing… => efficiency (Dell)

Logistics
- controls the transmission of physical materials
through the value chain => reduce cost (Dell)
Supporting Activities
HR
(provide inputs for primary
- ensure that company has the right mix of skilled
activities to occur)
people
- take advantage of transnational reach of labor

Infrastructure
- the context within which all the other value creation
activities occur
- organizational structure, control systems, culture of
the firm, top management.

II. GLOBAL EXPANSION, PROFITABILITY AND PROFIT GROWTH

- Expanding globally gives firms opportunities to increase profit and rate of profit
growth in ways not available to purely domestic firms.
● Expand the potential size of the market
+ Take goods/services developed at home and sell them internationally
+ Core competence: the source of a firm’s competitive advantage, skills within the
firms that cannot easily match/imitate
+ Firms transfer the core competence to foreign markets where indigenous
competitors lacked comparable competencies (replicate business model for
service sectors)
● Realize location economies
+ The firm will benefit by basing each value creation activity it performs at a
location where conditions, including relative factor costs, are most conductive to
perform that activity.
+ 2 effects: lower C and/or increase V
 ➔ Creating a Global Web (Lenovo)
➔ Consider transportation costs and political/economic risks of the location
● Realize greater cost economies from experience effects
+ Experience curve: systematic reductions in production costs that have been
observed to occur over the life of a product
To move down experience curve, firms need to:
➢ serve a global market from a single location
➢ price and market aggressively to ↑ demand
➢ build sufficient production capacity
+ Learning effects: cost savings coming from learning by doing (labor)
➢ tend to be more significant when a technologically complex task is repeated
➢ typically disappear after a while
➢ important only during start-up period
+ Economies of scale: the reductions in unit cost achieved by producing a large
volume of a product
➢ source 1: the ability to spread FC over a large volume
➢ source 2: serve global market
➢ source 3: global sales ↑ size of firms => ↑ bargaining power to suppliers
➔ By rapidly building sales volume for a standardized product, international expansion
can assist a firm in moving down the experience curve by realizing learning effects
and economies of scale.
● Earn a greater ROI by leveraging subsidiary skills
+ MNEs can create additional value by identifying valuable skills created within its
foreign subsidiaries and leveraging those within its global network of operations
=> Part of the global value chain.
+ Managers need to:
➢ recognize the skill that can arise anywhere within firm’s global network
➢ establish an incentive system
➢ have a process for identifying when valuable skills have been created
➢ act as facilitators, helping transfer skills

III. COST PRESSURES AND PRESSURE FOR LOCAL RESPONSIVENESS

1. Pressures for cost reductions
- Require firms to try to lower the costs of value creation (mass-produce, outsource..)
- Particularly intense in:
● industries producing commodity-type products
+ steel, sugar, bulk chemicals…
+ price is the main competitive weapon
● industrial and consumer products (semiconductor chips, personal computers)
● industries where:
+ major competitors are based in low-cost locations
+ persistent excess capacity
+ consumers are powerful
2. Pressure for local responsiveness
- Arise from national differences
● Consumer Tastes and Preferences
● Infrastructure and Traditional Practices
 ● Distribution Channels
● Host-Government Demands
- Require firms to differentiate its products and marketing strategy
=> Tend to raise firm’s cost structure
- Rise of Regionalism (EU, North America)
● may suggest that localization at the regional better than the national level
=> greater scale economies => lower costs
● there are still needs of some degree of local customization at national level
- Managers need to look at:
● the product market they are looking at
● the nature of national differences and trends for regional convergence
3. Choosing a Strategy
- International strategy refers to the way firms make choices about acquiring and
using scarce resources in order to achieve their international objectives.
- It involves:
● decisions about which markets to enter with which products, when and how
● all the various functions and activities of the company and how they interact
● ensuring that strategy is consistent across functions, products, and regional units
● a variety of unique demands associated with operating internationally
 Strategy Features
- ↑ profitability and profit
growth by reaping the
cost reductions
- tend to use cost
advantage to support
Global aggressive pricing
Standardization - prevail in industrial
goods serving universal
needs
- inappropriate in
consumer goods
- Intel, Unilever…
- ↑ profitability and profit
growth by customizing
products => provide a
good match to taste &
preferences
- limits the ability to
capture the cost
Localization
reduction of mass
Strategy
producing
- make sense if the value
added supports higher
pricing/leads to greater
local demand
- keep an eye on costs
- Nestle
- simultaneously achieve
low costs through
location economies..;
differentiate their product
Transnational
offering across
Strategy
geographic markets; and
foster a multidirectional
NOT EASY
flow of skills between
different subsidiaries
- places conflicting
demands on company
Pros Cons
(-) ignores cultural
(+) reduces production and
differences and local
marketing costs by
tastes, which may result
producing a standardized
in low demand or
product for all markets.
rejection of the product.
(+) helps in creating a
(-) reduces flexibility in
consistent brand image and
adapting to local market
positioning across all
conditions, which may
markets.
hinder the company's
(+) increases efficiency in
ability to respond to
production, distribution and
changes in consumer
marketing as there are no
needs or market trends.
changes needed in product
(-) may face regulatory
design, packing,
barriers and cultural
promotional campaigns for
resistance in some
each market.
markets.
(-) increases costs due to
the need to design and
produce different
(+) allows companies to cater
products, packaging,
to local tastes and
promotional campaigns
preferences, which can lead
for each market.
to higher demand and
(-) may result in a
customer loyalty.
fragmented brand
(+) enables companies to adapt
image and positioning
to local market conditions
across different
and regulations, which can
markets, which can
result in lower costs and
lead to confusion
increased efficiency.
among consumers.
(+) helps in building strong
(-) may limit economies of
relationships with local
scale and make it
suppliers and partners.
difficult to leverage
global resources and
knowledge.
(-) requires significant
(+) allows companies to
investment in research
customize products to local
and development,
market conditions while
marketing, and
maintaining a global brand
distribution to ensure
image and identity.
local adaptation and
(+) enables companies to take
customization.
advantage of cost
(-) requires a complex
efficiencies and economies
organizational structure
 - Caterpillar
- take products first
produced for their
domestic market and sell
them internationally with
only minimal local
customization
- serve universal needs
but do not face
International
significant competitors
Strategy
- centralize functions like
R&D at home
- establish
manufacturing/marketing
functions in major region
- the head office retains
fairly tight control over
mar & product strategy
CHAP 14: THE STRATEGY OF INTERNATIONAL BUSINESS
I. ORGANIZATIONAL ARCHITECTURE
- Refers to the totality of a firm’s organization.
II. ORGANIZATIONAL STRUCTURE
- 3 dimensions
1. Vertical Differentiation
of scale while adapting to
local market conditions.
(+) encourages innovation and
knowledge sharing across
different markets, regions.
(+) offers companies the
opportunity to expand their
market reach and diversify
their customer base.
(+) requires lower investment
and risk compared to other
strategies.
(+) provides access to new
technologies, resources,
and talent.
that is difficult to
manage, coordinate.
(-) may result in
inconsistencies in brand
image, positioning
across markets.
(-) may face regulatory
barriers and cultural
resistance in some
markets.
(-) may result in lower
profitability due to
higher costs associated
with localization and
customization.
(-) may result in a lack of
consistency in brand
image and positioning
across markets.
 - Refers to the location of decision-making responsibilities within a structure.

Definition Pros Cons

- a form of organizational structure - facilitate

where the decision making coordination and
capability rests with the top integration of
management. operations
- a couple of hand-picked - ensure that - increases the
members are entitled to create decisions are time taken to
strategies, determine the goals consistent with arrive at a
Centralization and objectives based on which organizational decision
an organization will function. objectives - may result in
- top management sets rules and - give top managers biased decision
procedures which are then the means to bring making
communicated to the lower-level about needed
employees, who are expected to major changes
carry out the same without - avoid duplication of
questioning the authority. activities

- gives top
- form of organizational structure
managers time to
that functions by delegating
focus on critical
decision-making capabilities to
issues
multiple teams across - not engaged to
- motivate
Decentralization geographies. main objectives
employees
- most of the planning, strategy - duplication
- greater flexibility
and decision to implement them
- can be more
are taken by the people in the
effective
middle and lower levels.
- increase control
Global Standardization Centralization

Localization Decentralization

Centralized control over core competencies

International Strategy
and decentralized other decisions

Some operating decisions are relatively

Transnational Strategy centralized, others relatively decentralized
*Require a high degree of decentralization
 2. Horizontal Differentiation
- How the firm decides to divide into subunits, normally based on function, type of
business or geographic area.
2.1. Domestic Firms
(1) As firms grow, the organization is split into functions reflecting the firm’s value
creation activities (eg. production, R&D, marketing).
- Decisions making in functional structure tend to be centralized.

(2) As firms diversify products, which takes the firm into different business area
=> Problems of coordinate and control arise
=> Switch to product divisional structure
- Each division is responsible for a distinct product line (business area)
- Responsibility for operating decisions is decentralized.

2.2. International Division

- When firms initially expand abroad, they often group all their international activities
into an international division.
- Regardless of firm’s domestic structure, its international division tends to be
organized on geography
- Has been widely used (Walmart) but brings problems:
● contains inherent potential for conflict and coordination problems between domestic
and foreign operations
● lack of coordination between domestic and foreign operations
➔ Firms abandon and adopt one of the worldwide structures.
2.3. Worldwide Area Structure
- Favored by firms with a low degree of diversification and a domestic structure based
on functions.

- The world is divided into geographic areas, each area tends to be a self-contained,
largely autonomous entity with its own set of value creation activities.
- Operations decisions and strategic decisions relating to each activity are
decentralized, headquarters is responsible for overall strategy and financial control.
➔ Consistent with Localization Strategy, but may make it difficult to realize gains
associated with Global Standardization.
2.4. Worldwide Product Divisional Structure
- Adopted by firms that are reasonably diversified and, accordingly, originally had
domestic structures based on product divisions.
- Each division tends to be self-contained.
- Value creation activities of each product division should be coordinated by that
division worldwide.
(+) Enhances the consolidation of value creation activities at key locations necessary for
realizing location and experience curve economies
(+) Facilitates transfer of core competencies within a division’s worldwide operations and the
simultaneous worldwide introduction of new product
(-) Limited voice of area/country managers => lack of local responsiveness
2.5. Global Matrix Structure
- Horizontal differentiation proceeds along 2 dimensions that are product division and
geographic area.

- Problems in reality:
● lead to slow decision making and inflexible organization
● lead to conflict and perpetual power struggles between 2 dimensions
● “finger-pointing” whenever has mistakes
➔ Firms need to apply a more “flexible” structure (Airbnb, Uber, Lyft…)
 Global Standardization
Worldwide product divisional structure
International Strategy

Localization Worldwide area structure

Transnational Strategy Global matrix but “flexible”

SUMMARY

CHAP 15: BUSINESS ENTRY MODES

A firm that is thinking about expanding in foreign markets must take 3 basic decisions.
1. Which markets to enter?
- The entry choice must be based on an assessment of a market’s long-run profit
potential (or perhaps a large-scale opportunity that has a shorter life-cycle)
- PESTLE
- Based on the purchasing power of consumers, the suitability of products and the
nature of indigenous competition…
- The most attractive foreign market tends to be found in politically stable developed
and developing nations that have free market systems and there is not a dramatic
upsurge in either inflation rates or private-sector debt.
2. Timing to entry
First-mover advantages First-mover disadvantages

- ability to preempt rivals and capture - bear pioneering cost

demand by establishing a strong brand
name and customer satisfaction
- build sale volume & ride down
experience curve ahead rivals, giving
firm early cost advantage
- create switching costs that tie
customers into their products
+ effort, time, expense to “learn the rule”
+ costs of business failure
+ costs of promoting, establishing
product offering
+ costs of educating customers
- bear risks if regulations change in a way
diminishes the value of early entrants
 3. Scale of entry
Pros Cons

- associated with major strategic

- risks and lack of flexibility
commitment (long-term, hard to reserve)
associated with significant
Large - have important influences on nature of
commitment
Scale competition in a market
- not all firms have enough
- limit others’ strategic flexibility
resources to choose
- capture first-mover advantages

- limit firm’s exposure to market

Small - allow firms to learn about market while
- difficult to build market share
Scale - reduce risks associated with large-scale
and capture first mover pros

4. Entry Modes (6)

Features + When Pros Cons

- selling some regular production

overseas
- indirect exporting involves an
organization selling to an
intermediary in its own country.
This intermediary then sells the
goods to the international market
and takes on the responsibilities.
- direct exporting involves an
Exporting
organization selling goods directly
to a customer in an international
market.
- low-level commitment and
involvement
- SMEs (limited resource and
international experience)
- firms with Excess Production
Capacity at home
- inappropriate if
lower-cost locations
- little investment
for manufacturing be
- relatively free of risks
found
- avoid substantial cost
- high supply chain
- help firms achieve
cost
experience curve & location
- tariff barriers
economies
- problems with local
agents

- used to export: technology,

management expertise, capital
equipment
- exporter of a turnkey project may - have no long-term
be a: interest in host
- earn economic returns from
+ contractor that specializes in market
valuable assets
Turnkey designing and erecting plants in - may inadvertently
- can be used to replace FDI,
project an industry create global rivals
less risky than FDI
+ company that wishes to earn - may sell competitive
money from expertise advantage
+ producer of a factory
- after a trial run, the facility is
turned over to the purchaser
- firms in specific industries

- refers to a contractual - do not have to bear the - do not give firms tight
Licensing
arrangement in which one firm development costs and control to realize
 sells access to its intangible risks associated with a experience curve
assets to another firm foreign market and location
- licensee pays fixed sum and sales - attractive because: economies
royalties (2%-5%) + courts have begun - limit ability to
- firms lacking capital to develop upholding patent coordinate moves
operation overseas infringement claims across countries
- firms unwilling to commit large + patent holders have - unable to maintain
financial resources to strange started suing violators control over their
market + foreign governments know-how in a
- firms wishing to join but prohibited have begun enforcement licensing agreement
by barriers of their patent laws
- firms possessing intangible assets
but do not want to develop itself

- a specialized of licensing when

franchisers not only sell intangible
assets but insist that franchisee
agree to abide rules to operate the
business - inhibit ability to take
- franchisee gets a: profits out of 1
- is relieved of many of the
+ well-established name country to support
costs & risks of opening a
Franchising + proven set of procedures another
foreign market on its own
+ carefully controlled marketing - problems of quality
strategy controls
- franchisor retains the right to
enforce processes and strategy
and assists franchisee
=> royalty payment
- often used by service firms

- a joint venture is:

+ a corporate entity formed by
international company and local
- benefits from local partner’s
owners
knowledge of country’s - giving controls of its
+ a corporate entity formed by
conditions technology to
two international companies for
- sharing costs and risks partners
the purpose of doing business
- minority ownership control - do not give firms tight
in a third market
is possible if: control over
+ a corporate entity formed by the
Joint + foreign firm holds 49% of subsidiaries to
international company and a
ventures shares, gives another realize experience
government entity
2% to local law firm or curve/location
+ a cooperative undertaking
trusted national, balance economies
between two or more firms for a
owned by local firm - conflicts of interests
limited-duration project
+ there is a local majority over strategy & goals
- management contract stipulates
partner (sleeping
that global partner controls specific
partner)
key aspects of a joint venture even
though it holds only a minority
position

- company has full equity ownership - reduce the risk of losing - most costly
Wholly
of the foreign entity control over technological - bear full capital costs
owned
- ways: competence and risks
subsidiaries
+ build a new plant (greenfield - give firms tight control over - additional problems
 investment)
+ acquire a going concern
+ purchasing the company that
used to be the local distributor
allows the firm to obtain an
established distribution network
operations in countries related to divergent
- necessary if firms are trying corporate culture
to realize experience curve
and location economies

5. Selecting an Entry Mode

5.1. Core competencies and entry mode
- Often avoid licensing and joint venture for not
losing control over technology
Technological Know-How
- Often use wholly-owned subsidiary
- There is exception for licensing

- Risk of losing control is not that great

- Valuable asset is brand-name
Management Know-How - Firms often use a combination of franchising and
master subsidiaries (joint venture with local partner
works best)

Global Standardization or
- Wholly-owned subsidiaries
Transnational Strategy

5.2. Greenfield or Acquisition?

a. Greenfield Venture
Definition Pros Cons

A type of FDI where a company

establishes operations in a foreign - High level of control
country. over business
eg. In 2015, Toyota Motor operations
Corporation announced plans to - High level of quality - The riskiest form of
establish a new manufacturing facility control over the foreign direct
in Mexico through an investment of manufacturing and investment
about US$1 billion. Slated to open in sale of products - Potentially high
2019, the facility is expected to and/or services market entry cost
produce up to 200,000 units per year - High control over (barriers to entry)
in conjunction with the currently brand image and - Government
established Tijuana plant. staffing regulations that may
The rationale behind Toyota’s - Gives firm ability to hamper FDI
greenfield investment is to improve build the kind of - High fixed costs
competitiveness in North America – subsidiary company involved in
specifically within the United States. that it wants establishing a
The low labor cost and the close - Bypassing trade greenfield location
proximity to US markets offered the restrictions
Japanese automaker an attractive - Creating jobs for the
opportunity to establish an overseas economy
manufacturing facility.
 b. Acquisition
Pros Cons

- Quick to execute - Often produce disappointing result

- Preempt the competitors
- Less risky
+ Overpay the assets of acquired firm
+ There is a clash between culture of
acquiring and acquired firm
+ Integrating 2 firms takes longer than
forecast
+ Inadequate pre-acquisition screening

6. Strategic Alliances
- Strategic alliances involve partnerships between competitors, customers, or suppliers
- Can take various equity or non-equity forms
- The goals of strategic alliances include:
+ Faster market entry and start-up
+ Access to new products, technologies, and markets
+ Cost-savings by sharing costs, resources, and risks
Pros Cons

- Facilitate entry into a foreign market + Firms giving away technological

- Share the costs and risks know-how and market access to its
- Facilitate the transfer of skills partners
- Help firms establish technical standards + Need to select partners carefully0p
- Strategic alliances can be joint ventures:
+ Pooling alliances are driven by similarity and integration
+ Trading alliances are driven by the contribution of dissimilar resources
+ Alternatives to mergers and acquisitions
- Future of Alliances:
+ Many fail or are taken over by a partner
+ Difficult to manage due to diverging, strategies, operating practices, and
organizational cultures
+ Partner may acquire technological or other competencies and become competitor

CHAP 19: GLOBAL HRM

I. Staffing policies
- the selection of employees for particular jobs
- Ethnocentric: chi phí không phải vấn đề, khả năng thích nghi với thị trường thấp, tính
áp đặt cao, ngành có tính quy chuẩn cao (y tế, hàng không)
- Polycentric: đa dạng, thích nghi nhanh, tốn ít chi phí hơn, DN quan tâm tới tình hình
bán hàng tại các chi nhánh nội địa
- Geocentric: tiết kiệm chi phí, DN có rank cao và có tính áp đặt trong ngành
- Regional: transnational, tối ưu chi phí, các quốc gia lân cận có MQH liên kết về
GTVT, văn hóa, trình độ thông tin giúp việc truyền tải thông tin dễ dàng hơn