Foreign Market Entry Strategy IV International Business Strategy 301REN Unit: 8 Knowledgecast: 2 Module Learning Outcomes • Integrate and apply strategic approaches to practical situations in various types of organisations • Assess current developments in the organisational environment and alternative responses related to strategy • Resolve management problems in the area of strategic management by evaluating alternative outcomes International Strategic Alliance Types of International Strategic Alliance between Non Competing Firms. International Expansion Alliance For expansion into new geographical location Vertical Integration Alliance Between supplier and buyer Diversification Alliance Between companies in different line of business. International Strategic Alliance Types of International Strategic Alliance between Competitors. Complementary Alliance Contributing various assets and capabilities for joint endeavour Shared Supply Alliance Collaboration to achieve economies of scale Quasi-concentration Alliance Contributing similar assets and capabilities to develop product Strategies’ Success Criteria (SAFS) Suitability : does the strategy address the organisation’s strategic position ? Acceptability: do the expected performance outcomes meet expectations (re ROI or risk)? Feasibility: will the strategy work in practice? Sustainability: is the strategy ecologically and socially sustainable ? Suitability of strategic options Acceptability • Acceptability focuses on the expected performance outcomes of a strategy. • Performance outcomes can be assessed on the basis of THREE CRITERIA: - Return - Risk - Stakeholder reactions Criteria for assessing Acceptability Feasibility Feasibility is concerned with whether an organisation has the resources and competences to deliver a strategy. - Financial Resource - Human Resource - Physical Resource - Intangible Resource - Competences Sustainable development • Sustainable development is development that “meets the needs of the present without compromising the ability of future generations to meet their own needs” ( Bruntland Commission, UN 1987) Sustainable Development Sustainable Development can be broken down in 3 separate frameworks: - Environmental sustainability - Economic sustainability - Socio-political sustainability Sustainability Sustainability of competitive advantage: - Sustaining low price advantage - Sustaining differentiation advantage - Sustaining hybrid advantage Knowledgecast Summary • Integrate and apply strategic approaches to practical situations in various types of organisations • Assess current developments in the organisational environment and alternative responses related to strategy • Resolve management problems in the area of strategic management by evaluating alternative outcomes Seminar Mini case: Autolatina: International Partnership (closing case Chapter 15 of required text) 1. What were Ford’s motive and objectives Evaluate the extent to which Ford accomplished these objectives. 2. What type of the collaborative venture did Ford enter with Volkswagen? What were the advantages and disadvantages from Ford’s perspective? 3. What strength did Ford and Volkswagen bring to the Autolatina venture? Did these firms have any weaknesses? Elaborate 4. Did Ford commit any blunders in its Latin America operation? Specify 5. What can other managers learn from Ford’s experience regarding international collaborative venture? Group Activity Challenges of Licensing and Franchising Read opening case - Harry Potter: The Magic of Licensing on page 463 (required text) Read Global Trend discussion- Internationalization of Franchising: Emerging Markets on page 473 (required text) Read closing case – Subway and the challenges of Franchising in China on page 482 (required text) Group Activity Requirement 1. Answer the questions the follow 2. Compare and contrast the challenges and risk of Franchising and Licensing 3. Recommend either alternatives (franchising and Licensing) as entry mode for any Telecommunication organisation or your choice to any emerging market with clear justification.