Category: Academic Theory
A signpost to useful information on the academic theories and frameworks used in the international business and global strategy literature.
The Marketing Plan
Market Segments -a Five-Step Process
What is Strategy?
Strategy involves the action plan of a company for building competitive advantage and increasing its triple bottom line over the long-term. The action plan relates to achieving the economic, social, and environmental performance objectives; in essence, it helps bridge the gap between the long-term vision and short-term decisions.
Strategic Management
Strategic management is the process of building capabilities that allow a firm to create value for customers, shareholders, and society while operating in competitive markets (Nag, Hambrick & Chen 2006). It entails the analysis of internal and external environments of firms to maximize the use of resources in relation to objectives (Bracker 1980). Strategic management can depend upon the size of an organization and the proclivity to change the organization’s business environment.
The process of strategic management entails:
Specifying the organization’s mission, vision, and objectives
Developing policies and plans that are designed to achieve these objectives
Allocating resources to implement these policies and plans
As an example, let’s take a company that wants to expand its current operations to producing widgets. The company’s strategy may involve analyzing the widget industry along with other businesses producing widgets. Through this analysis, the company can develop a goal for how to enter the market while differentiating from competitors’ products. It could then establish a plan to determine if the approach is successful.
Keeping Score
A balanced scorecard is a tool sometimes used to evaluate a business’s overall performance. From the executive level, the primary starting point will be stakeholder needs and expectations (i.e., financiers, customers, owners, etc.). Following this, inputs such as objectives, operations, and internal processes will be developed to achieve these expectations.
Another way to keep score of a strategy is to visualize it using a strategy map. Strategy maps help to illustrate how various goals are linked and provide trajectories for achieving these goals.
Common Approaches to Strategy
Richard Rumelt
In 2011, Professor Richard P. Rumelt described strategy as a type of problem solving. He outlined a perspective on the components of strategy, which include:
Diagnosis: What is the problem being addressed? How do the mission and objectives imply action?
Guiding Policy: What framework will be used to approach the operations? (This, in many ways, should be the decision of a given competitive advantage relative to the competition.)
Action Plans: What will the operations look like (in detail)? How will the processes be enacted to align with the guiding policy and address the issue in the diagnosis?
Michael Porter
In 1980, Michael Porter wrote that formulation of competitive strategy includes the consideration of four key elements:
- Company strengths and weaknesses
- Personal values of the key implementers (i.e., management or the board)
- Industry opportunities and threats
- Broader societal expectations
Henry Mintzberg
Henry Mintzberg stated that there are prescriptive approaches (what should be) and descriptive approaches (what is) to strategic management. Prescriptive schools are “one size fits all” approaches that designate best practices, while descriptive schools describe how strategy is implemented in specific contexts. No single strategic managerial method dominates, and the choice between managerial styles remains a subjective and context-dependent process. As a result, Mintzberg hypothesized five strategic types:
Strategy as plan: a directed course of action to achieve an intended set of goals; similar to the strategic planning concept
Strategy as pattern: a consistent pattern of past behavior with a strategy realized over time rather than planned or intended (where the realized pattern was different from the intent, Mintzberg referred to the strategy as emergent)
Strategy as position: locating brands, products, or companies within the market based on the conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors outside the firm
Strategy as ploy: a specific maneuver intended to outwit a competitor
Strategy as perspective: executing strategy based on a “theory of the business” or a natural extension of the mindset or ideological perspective of the organization
Source: Boundless. “What is Strategy?.” Boundless Management. Boundless, 08 Dec. 2014. Retrieved 26 Feb. 2015 from https://www.boundless.com/management/textbooks/boundless-management-textbook/strategic-management-12/strategic-management-86/what-is-strategy-415-1550/
Best global brands
Interbrand’s Best Global Brands is the definitive list of the world’s most valuable brands. Find out the world’s top 100 brands and the leadership strategies here.
What Is International Economics?
International economics is a field of study that assesses the implications of international trade, international investment, and international borrowing and lending. There are two broad subfields within the discipline: international trade and international finance.
International trade is a field in economics that applies microeconomic models to help understand the international economy. Its content includes basic supply-and-demand analysis of international markets; firm and consumer behavior; perfectly competitive, oligopolistic, and monopolistic market structures; and the effects of market distortions.
Source:
International Economics: Theory and Policy
Available on http://www.saylor.org/site/textbooks/International%20Economics%20-%20Theory%20and%20Policy.pdf
International Economics: Theory and Policy
International Business
The overarching logic of the book is intuitive—organized around answers to the what, where, why, and how of international business.
Sustainability, Innovation, and Entrepreneurship
This book offers students and instructors the opportunity to analyze businesses whose products and strategies are designed to offer innovative solutions to some of the twenty-first century’s most difficult societal challenges. A new generation of profitable businesses is actively engaged in cleantech, renewable energy, and financially successful product system design and supply chain strategies that attempt to meet our economic development aspirations while addressing our social and ecological challenges. This textbook offers background educational materials for instructors and students, business cases illustrating sustainability innovation, and teaching notes that enable instructors to work effectively and accelerate student learning.
Global Business Strategy: A Systems Approach by Asterios Kefalas
Future historians of business will undoubtedly describe the 1990s as the dawn of globalization. Gradually but steadily, goods, services, money, and people are coming to be exchanged in a market that has virtually no national borders. This market is not simply an extension of the domestic markets that grew up after the end of World War II. Rather, the global market is a new phenomenon brought about by a convergence of the social, political, and economic systems of the peoples of the earth.
At the center of this globalization process is the interplay between the multinational corporation (MNC) and the nation-state, or country. The nation state, responding to the political and economic cooperation among the great powers, has found that it must adopt a more cooperative attitude toward the MNC. Similarly, the MNC, faced with some new managerial challenges, has discovered that it needs the support of the nation-state. These challenges stem from changes in technology (primarily information technology), market forces, and people’s attitudes toward work. Even among MNCs, conventional “go-it alone” strategies, prevalent in the 1970s and early 1980s, are giving way to “cooperate-to-compete” strategies. Indeed, strategic alliances among some of the largest MNCs seem to be the norm rather than the exception.
Institutions of higher education, cognizant of this shift toward globalization, are developing curricula that aim at preventing American students, the business leaders of the future, from falling prey to “the backyard view.” When one sees no light in any of the other windows in the neighborhood, it is all too easy to assume that everyone in the world is asleep-to forget that there is more to the world than one’s own backyard. The business leader of the future must understand that from now on, business opportunities and challenges will be global ones; no single country will ever again have a monopoly on business or technological expertise.