GLOBAL STRATEGY DESIGN

Chapter 5: Design global strategy

SIGNPOST FOR TODAY

Strategy and global strategy?

Global strategy and its components
Why strategy?
- Roots in Greek - strategos.
- Related to military - Asia - Tôn Tử
“Know yourself, know your opponents; encounter a
hundred battles, win a hundred victories”
- Growing recognition since 1960s
STRATEGY
STRATEGY
 Strategy is pathway that
Business choose to sustainably
compete with their rivals
HIERARCHY OF STRATEGY

CORPOR
ATE

SBUs

FUNCTIONAL AREAS
THINKING
Corporate Strategy describes a company’s overall direction in terms of its general
attitude toward growth and the management of its various businesses and product
lines to achieve a balanced portfolio of products and services.

Business Strategy, sometimes called competitive strategy, is developed at divisional

level and emphasises improvement of the competitive position of a corporation’s
products or services in the specific industry or market segment served by that
division.

Functional Strategy is concerned with maximising resources productivity. Within the

constraints of the corporate and business strategies around them, functional
departments, such as marketing, finance, R&D and production, develop strategies to
pull together their various activities and competencies to improve performance.
The three levels of strategy form a hierarchy of strategy development within any large
corporation.
 Objectives Strategies Key words
Growth Focused Penetration Increase market
development share
Market Development Geo - expansion
Product development Increase sale =
improve present
product/new P
Đa dạng hóa Add new but related
Related Diversification products

Unrelated Diversification Add unrelated P/S

Integration Forward Seller
Backward Supplier
Horizontal Competitor
1. Forward Intergration

Gaining ownership or increased control over distributors or

retailers
2. Backward Integration

Backward integration is a strategy of seeking ownership or

increased control of a firm’s suppliers.
appropriate when a firm’s current suppliers are unreliable, too
costly, or cannot meet the firm’s needs.
3. Horizontal Integration

Seeking ownership of or control over a firm’s competitors,

horizontal integration is arguably the most common growth
strategy.
HOW? mergers, acquisitions, and takeovers
7. Diversification

Two types: related vs. unrelated (đa dạng hoá liên quan và đa
dạng hoá không liên quan)

Create new
Related to value chain//
activities in no relation
current value with current
chain value chain
Unrelated Diversification
MAR PETCARE
Vietnam’s largest ecosystem connecting people and businesses at the intersection
of technology and humanity
8. Defensive Strategy –

1. Retrenchment – CHIẾN LƯỢC CẮT GIẢM: occurs when an

organization regroups through cost and asset reduction to reverse
declining sales and profits
2. Divestiture – Thoái vốn – bán tài sản: Selling a division or part of
an organization is called divestiture
3. Liquidation - Selling all of a company’s assets, in parts, for their
tangible worth is called liquidation (đóng cửa toàn bộ, bán toàn
bộ)
TASK

In groups, find relevant example for some types

of strategies mentioned in previous slides
SBU(S)
- COST: PRICE
- DIFFERENTIATION: VALUE
- FOCUS: 1 GROUP OF CUSTOMER
Differentiation Cost leadership Innovative Time-based Blue ocean
(Khác biệt hoá) (cạnh tranh về advantage advantage (lợi Strategy
giá) (lợi thế về CN, thế về thời (Chiến lược
sáng tạo) gian) đại dương
xanh)
Different and Low cost Lead in Khả năng xây
valuable value innovation and dựng một đoạn
technology thị trường mới
để cung cấp
giá trị khác biệt
tới khách hàng.

- Technology - Raw - Tìm kiếm thị - Shorten time: - Loại bỏ những

- Quality materials trường mới R&D, logistic, yếu tố k cần
- Design - HR - Giải pháp reaction thiết và thêm
- Personalization - Tech mới yếu tố phù hợp
- Brand value - Economic of - Radical với đoạn thị
- …. scale… change trường mới
- Đổi mới
Sáng tạo
LET’S LOOK AT SOME
NEWSCLIPS BELOW
SELF-READING
GLOBAL STRATEGY
• Strategies of firms around the globe
• Both international and non-international (domestic)
• Both developed and emerging economies
(Chiến lược sử dụng cho doanh nghiệp với quy mô toàn cầu)
STRATEGY VS. GLOBAL
STRATEGY
Strategy:
- Long term objectives (3-5)
-Value proposition
-System design -> value creation
-Organisational functions: structure, process, system
STRATEGY VS. GLOBAL
STRATEGY
Global Strategy: sustain in world market
-Corporate level: overall direction for multi-business worldwide
-Integrate various global business strategy
-Market: whole homogenous market
-Positioning: worldwide
-System and organisation: worldwide
DIFFERENT LEVELS IN GLOBAL
STRATEGY
DIFFERENT STRATEGIC LEVELS
IN GLOBAL FIRMS
GLOBAL STRATEGIC
FRAMEWORK
 GLOBAL AMBITION
Role of organization in global marketplace
Why?
Rationale for globalization
Global presence
3 MOTIVES OF GLOBAL
AMBITION
1. Market- seeking objective
-Gain access to new markets/ opportunities
-Secure market share and sale growth in foreign market
-Follow key customers
How to achieve?
=> Export or subsidiary
3 MOTIVES OF GLOBAL AMBITION
2. Resources-seeking motives
-Access raw material
-Gain access to knowledge or other assets
-Access technological and managerial know-how available in key
market
How to achieve?
Contractual sourcing, direct exploitation
3 MOTIVES OF GLOBAL
AMBITION
3. Capability-seeking
-Integrate and capture innovative skills
-Sustainable competitive advantages
How to achieve?
R&D alliances, R&D center, intelligent office
WHAT KIND OF GLOBAL PLAYER?
SCOPE OF GLOBAL PRESENCE
WHAT KIND OF GLOBAL
PLAYER?
1. Global sources
-Sources -> outside
-Sale (finished-good) -> domestic
2. Global exporter (nhà XK toàn cầu)
-Mainly operate in home country, focus expansion by exporting
-Might establish manufacturer outside but only for exporting
WHAT KIND OF GLOBAL
PLAYER?
3. Regional player (Nhà KD khu vực)
- Play, operate and growth in 1 region
WHAT KIND OF GLOBAL
PLAYER?
4. Global players (Nhà KD toàn cầu)
-Sustainable competitive advantage in world market
2. GLOBAL POSITIONING –
CHOICE OF COUNTRY
-Key countries: provide critical resources for company’s long-term
competitiveness (quốc gia trọng yếu)
-Emerging countries: recall to lecture 2 – attractive in the near future
(Quốc gia mới nổi)
-Platform countries: “Hub” setting – regional center (Quốc gia nền
tảng)
-Marketing countries: attractive without being strategically critical
-Sourcing countries: resources-based
(Quốc gia nguồn lực)
COUNTRIES PORTFOLIO –
WHAT SHOULD WE DO?
WE ARE DIFFERENT!
SO ARE THEY!
GLOBAL POSITIONING – VALUE
PROPOSITION
Recall: What is positioning? – định vị thị trường
 Positioning
- Positioning product/brand is differentiating it from competitors and in the mind
of customer
- Choose a unique and value position to offer the meaningful benefits
- Tailored frame for whole business operation and marketing activities in next
stage of marketing process.

©2012 Pearson Education

GLOBAL POSITIONING – VALUE
PROPOSITION
Simple
Essential
Mix and match
 GLOBAL POSITIONING – VALUE
PROPOSITION
“ultra-premium luxury”: create a significant
Desire among ultra rich customer
RICH HERITAGE
EXQUISITE CRAFTMANSHIPDETAIL OF
QUALITY AND PROFESSIONALISM
GLOBAL POSITIONING – VALUE
PROPOSITION

NO BRAND INDENTITY
FOCUS ON FUNCTIONS
THIẾT KẾ TỐI GIẢN - MINIMALISM
HOUSEHOLDS
 WHY DID MUJI FILL FOR
BANKRUPTCY IN THE US?
(AFTER COVID-19)
 BUT… WHEN COMPARE WITH
IKEA
IKEA: functionality, good organisation,
style at affordable price

OVERLAP ??
GLOBAL VALUE PROPOSITION

AVOID RAPID CHANGING

Do not last forever
WHEN?
New entrants
New competitors
Blur proposition
FEW MORE EXAMPLES
GLOBAL STRATEGIC
FRAMEWORK

sustain Competitive among

countries
GLOBAL BUSINESS SYSTEM –
VALUE CHAIN
-Business system: all activities that a firm carries out
in order to capture and deliver value
-Three major generic components of a value chain:
Innovative activities
Productive activities
Customer relationship activities
(1) (2) (3)
 GLOBAL BUSINESS SYSTEM –
COMPETITIVE ADVANTAGES
SUSTAINABILITY
Value competitive = long-lasting = sustainability

Customer loyalty
Network and experience

Preemption resources Imitation barriers

KNOW-HOW INTELLIGENT IN
GLOBAL FIRM
It’s all about strategic choice
-Transfer: capabilities can be easily transferred internationally
without any changes
-Adapt: capabilities can be transferred internationally with some
modifications
-Create: Create when entering new countries
TRANSFERABLE
ADAPTABLE
CREATE
GLOBAL STRATEGIC
FRAMEWORK
 GLOBAL ORGANIZATION
EVOLUTION
Three levels of IB

Toàn cầu
Đa quốc gia Global
Multinationals

Xuất khẩu
Export
GLOBAL ORGANIZATION
Strategic choice (structure, process, culture) is dependent on the
phase of global development
-Early export
-Large export/Early multinational
-Full multinational
-Global
-Global-multi
MCQ
SUMMARY