Hanoi, Vietnam

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INTERNATIONAL BUSINESS - GLOBAL STRATEGY

Hanoi, Vietnam

+Definition

Defined as an organization's strategic guide to globalization.

Appropriate in industries which faced with strong cost reduction pressures but weak local responsiveness pressures .

Require to coordinate product and pricing strategies tightly in internationalmarkets & locations.

Hanoi, Vietnam

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Answer these questions:

What must be the extent of a market presence in the international markets?

How to build a necessaryglobal presence?

Definition

Hanoi, Vietnam

+Advantages Cost-effective

Enables a company to focus on improving sales

BrandingAllows companies to maintain a consistent image in each country.

Molding successful strategies- Replicates a strategy that has worked for it in one market- The success rate will usually be higher.

Efficiency- Enables a company to leverage economies of scale.- Save a company money in labor, packaging and marketing material costs.

Hanoi, Vietnam

+Advantages Life Cycle

- Introducing older products into newer markets.- Saving the launch of a product's most recent version for well-developed markets.

Improved product and service effectiveness The more you learn, the more effective you become at rolling out new and improved product &service offerings.

Stronger competitive advantageAdapt quickly wherever needed and largely based on customer demands or trends in the global marketplace.

Heightened customer awarenessCustomers can track the progress or lack thereof of a product all over the world with the Internet.

Hanoi, Vietnam

+Disadvantages

Cultural differencesThe cause of failed global strategies.

Legal differences- Pose a serious challenge to global businesses- Certain strategies that are effective in some markets are not allowed in other markets

Economic differencesA major challenge to global business strategies.

Hanoi, Vietnam

+Disadvantages Political differences

Various political regimes around the world have different attitudes and policies toward businesses.

Macroeconomic risk- Some markets have particular tastes or are more sensitive to pricing.- If a company estimates incorrectly, the mistake could cost it a fortune.

Operational riskIf employment laws or corporation laws change in the country where a company manufactures its global product, then that could ruin everything.

Hanoi, Vietnam

+CASE STUDY:

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Hanoi, Vietnam

Brief History The biggest chain of

retailer and consumer, provides large number of quality products.

Include: grocery clothing, pharmacy, toys, hardware and various CDs, DVD Musical instruments, consumer electronics, books etc.

Every Wal-Mart possesses McDonalds

Contains a photo shop so people can do shopping while their photos get ready

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Hanoi, Vietnam

Brief History An innovative creation of Sam

Walton

Publicly traded under the New York stock exchange and recognize by the symbol WMT.

1962: Sam Walton opened his first Wal-Mart in Rogers, Arkansas.

1980:  Wal-Mart had over 300 stores and had accumulated over 1 billion dollars in sales.

2006:  Wal-Mart the world’s largest retailer in 2006.

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Hanoi, Vietnam

Business Model

Operates under 9 different retail formats through 3 retailing subsidiaries:(1)Wal-Mart Stores Division U.S.,(2)Sam’s Club, and(3) Wal-Mart International.

Adopted a strategy somewhere between “Focused Low-Cost” positioning and “Cost Leadership”.

Hanoi, Vietnam

+ Strengths and Weaknesses( The SWOT analysis )

Hanoi, Vietnam

+Financial data from 2002-

2006

Hanoi, Vietnam

+Global Strategies

Related Diversification

Wal-Mart’s move into the grocery business has also positioned it against major grocery chains

Subsection of some stores known as “Pennies-n-Cents” in response to the dollar store retailers.

Venturing into web-based retailing through http://www.walmartstores.com

Cost and Quality Emphasis

Private Brand Labels which enjoy the average US consumer’s mind share

Focus on popular brands i.e. fast moving goods

Hanoi, Vietnam

+Global Strategies

“Everyday Low Prices” strategy

High labor productivity and low labor costs

Superiors bargaining power vis-à-vis suppliers

Recognizing Complementary Competitors

Understanding that manufacturer / supplier is an economic partner

Power brands like P&G working closely with Wal-Mart and reduce costs in its supply chain

Hanoi, Vietnam

+Wal-Mart International: 2718 Units

Hanoi, Vietnam

+ Challenges in International Strategy:Late entry into foreign markets thus losing first

mover advantage

Flawed entry strategies in mature European markets like unsuitable store formats

Rashly made acquisitions without judgment

Poor understanding of foreign customer psyche

Anti-union stance leading to union battles and workers’ lawsuits

Poor relations with the local community mention citizens’ groups

Imposition of previously relevant ways in US on new consumers

Hanoi, Vietnam

+ Sustainability Strategies of Wal-Mart

Hanoi, Vietnam

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Thank you