1. Strategies
– 3 types of strategies
• Corporate
–They lay down the framework in which
business in which business strategies
operate.
– They decide whether the organization
should Stabilize, Expand, Retrench or any
combination of these
• Business (SBU level)
• Functional ( finance, mtkg, mis , it)

2. Corporate Strategies
• They include making decisions related to
allocating resources among the different
businesses of an organization.
• Transferring resources from one set of
businesses to others and
• Managing a nurturing a portfolio of businesses
• Shift resources from cash rich to another
business which have good potential

3. Business Strategies
• Made at the business level
• Get directions from the corporate level
strategies.

4. Corporate Strategies- EXPANSION
• Expansion
Concentration, Integration, Diversification,
Cooperation, Internationalization, Digitalization
• Stability
• Retrenchment
• Combination

5. Internationalization
International Strategies
require organizations to
market their products/
services beyond the
domestic product.

6. Why firms go International?-active
reasons
• Additional resources
• Lowered Costs
• Incentives
• New expanded markets
• Synergy
• Economies of scale
• Power and Prestige

7. Why firms globalize?-reactive reasons
• Trade barriers
• International customers
• International Competition
• Regulations

8. HOW CAN COMPANIES KNOW WHICH
COUNTRY TO ENTER ?????
• PORTER MODEL OF COMPETITIVE ADVANTAGE
OF NATIONS…
• ALSO KNOWN AS PORTER DIAMOND MODEL

10. PORTER DIAMOND MODEL
• Factor conditions
• -The special factors or inputs of production
such as natural resources, raw materials,
labour etc, that a nation is blessed with
• Demand Conditions
• -The nature and size of Buyer’s needs in the
domestic market.

11. PORTER DIAMOND MODEL
• Related and Supporting Industries
• -The existence of related and support
industries
• Firm Strategy, Structure and Rivalry
• -The conditions in the nation determining how
the firms are created, organized and managed
AND the nature of the domestic competition

12. PORTER DIAMOND MODEL
• Chance or Serendipity
• -Just by chance a country may be having blessed
with very high industrial concentration.
• Government
• -It can influence each of the above four
determinants of competitiveness. Clearly
government can influence the supply conditions
of key production factors, demand conditions in
the home market, and competition between
firms. Government interventions can occur at
local, regional, national or supranational level.

14. • ANY FIRM WHO GO INTERNATIONAL FACES 2
CHALLENGES:
• Pressure of COST reduction
• Pressure of LOCALIZATION
International Pressures

15. International Strategy Options
Export Country Centred
Offices
Country Centred
manufacturing
One World One
Strategy

16. 4 Types of Int Strategies
• Int Str : Create Value by transferring Products %
Services to foreign Mkts. Std products & Services
with no Diffrentiation
• Multidomestic : Achieves high level of local
responsiveness. This leads to high cost structure
as R & D and Production & Mkting functions have
to be duplicated
• Global Str : Intensively focus on low cost structure
by leveraging their expertise in providing certain
limited products & services

17. 4 types cont
• Transnational : Combination of low cost and high
local responsiveness . Dealing with these two
contradictory things is a difficult propositon
• Acc to Bartlett & Ghoshal this is the best strategy
in the world to follow
• Indian firms find it challenging to adopt any four
• Only Int Industry we have is software cost is low
& responsiveness is not a problem

18. Mode of Operations

19. International Entry Modes
• Export Entry Modes : Direct & Indirect . Direct
does not involves home country
Intermediaries
• Indirect Involves home Countries
Intermediaries

20. Contractual Entry Modes
• Franchising-
– Use trademark of parent (KFC, SUBWAY, Mc
Donald) . Fee based upon the SALES is paid by the
franchisee to the firm.
• Foreign Branching
– It is an extension of the company in its foreign
market. Just fulfills the duties of corporate office
– Sales, Customer Service and Distribution.

21. Mode..
• Licensing
– For some fee is an Arrangement where the
International company transfers knowledge ,
technology , patent etc for a limited period of time

22. Mode
• Private Equity investment
• Money from private sources that is invested
by a venture capital OR private equity
company in start-ups and other risky- but
potentially very profitable-small and medium-
size enterprises

23. Mode
• Private Equity investment
• Money from private sources that is invested
by a venture capital OR private equity
company in start-ups and other risky- but
potentially very profitable-small and medium-
size enterprises
• Wholly owned Subsidary.
• Hyundai India is the Fully owned Subsidiary of
Hyudai Korea

24. ADVANTAGES OF
INTERNATIONALIZATION
• Realizing Economies of Scale
• Realizing Economies of Scope
• Expansion of Markets
• Access to resources overseas
• Realizing location economies

25. DISADVANTAGES OF
INTERNATIONALIZATION
• Higher Risks (PESTEL)
• Difficulty in monitoring cultural diversity
• Trade barriers
• Higher distribution costs

26. Expansion-Cooperation
• Involvement of two different firms required
• WIN-WIN SITUATION FOR BOTH THE FIRMS
• Cooperation can be in 3 ways-Mergers,
Acquisitions, Alliances

27. MERGER and ACQUISITION
• MERGER
• When two firms agree to go forward as a single
new company rather than remain separately
• Both companies' stocks are surrendered and new
company stock is issued in its place.
• For example, in the 1999 merger of Glaxo
Wellcome and SmithKline Beecham, both firms
ceased to exist when they merged, and a new
company, GLAXOSMITHKLIME was created.

28. MERGER and ACQUISITION
• ACQUISITION
• When one company takes over another and
clearly establishes itself as the new owner,
the purchase is called an "acquisition".
• The target company still exists as an
independent legal entity, which is controlled
by the acquirer.
• (Daichi acquired Ranbaxy)

29. Types of MERGER and ACQUISITION
• Horizontal
• Vertical
• Concentric
• Conglomerate

30. Reasons of MERGER and ACQUISITION
• Reduce competition
• For Synergy
• Increase the growth rate
• Increase the Value of Stock
• Acquire the needed resources quickly

31. Issues in Mergers and Acquisitions
• Strategic issues
• Financial Issues
– Valuation/ Sources of Financing/Taxation matters
after the m&a
• Managerial issues
– Sometimes no synergy
• Legal Issues

32. Alliances
• Partnership between firms whereby their
resources, capabilities and core competencies are
Combined
• It is done to pursue mutual Interest to develop,
manufacture, or distribute goods and services.

33. Examples Alliances
1st Company 2nd Company FOR WHAT?
ISA Blue Star Sale and Service of
ISA ACs
Hilton hotels East India hotel Manage, operate
and Marketing of
its Hotels
BOGEN NPIL Marketing of
Avonex Drug
Indore bank Bajaj Tempo Special terms for
Tempo under
Indore Bank-Bajaj
tempo KRISHI
VIKAS SCHEME

34. Reasons for Alliances
• Entering new market
• Developing and Diffusing Technology
• Reducing Manufacturing Costs

35. RISKS in ALLIANCES
• Lack of Trust
• Misunderstandings
• Conflicting goals and interests
• Controlling Vs managing

36. Expansion-Digitalization
• Computerization of everything
• E portal
• E reading
• Internet
• E business

37. Expansion-Digitalization
• E commerce
• E banking
• E tailing
• E trading
• E-healthcare

38. Expansion-Digitalization
• Digitalization is good ? Why
• It helps firms to Store, Retrieve, and ANALYZE
data
• What about Digitalization of VALUE CHAIN? Is
this bad or Good?

39. CORPORATE STRATEGY CHART
• Expansion
Concentration, Integration, Diversification, Cooperation,
Internationalization, Digitalization
• Stability
– No change
– Profit
– PAUSE / proceed with caution
• Retrenchment
• Combination

40. Thanks