Global Corporate Strategy

Lecture - 1
Why Study Global Corporate
Strategy?
Three main reasons

1. Consultancy
2. Working for a firm or self employed
3. Working for a foreign - owned enterprise
What is Strategy?
Three main school of thought
Global Corporate Strategy

Lecture - 2
Fundamental questions in strategy
 Why do firms differ?
 Anglo-American and Continental European Capitalism have
little differences (e.g., shorter and long-term investment
horizons respectively)
 Striking differences between European and Japanese firms
(Western firms make expensive acquisitions whereas Japanese
develop network form of supplier management)
 Keiretsu (interfirm network)
 Guanxi (interpersonal networks and relationships)
 Chaebol (Large business groups)
 Blat (relationships)
How do firms behave?

Three leading perspectives

 What determines the scope the
firms?
Firm growth – motivation to grow (expansion and
contraction)
1. Product Scope:
 Conglomeration strategy – unrelated product
 Popular during the 1960s – 19170 in developed economies
 Discredited in the 1980s-1990s
2. Geographical Scope:
 Triade markets – three primary regions of developed
economies (North America, Europe, and Japan)
 Emerging markets – BRICS
But not wise that all firms can, or should “go
global”.
What determines failure and success
of firms around the globe?
This is about the performance
1. Industry-based view:
 Degree of industry competitiveness
2. Resource-based view
 Firms’ resources and capabilities
3. Institution-based view
 Institutional forces
 What is global Strategy?
Strategy of a firm around the globe to compete successfully.
 International strategy: the organization's objectives relate
primarily to the home market. However, we have some
objectives with regard to overseas activity and therefore need
an international strategy. Importantly, the competitive
advantage – important in strategy development – is
developed mainly for the home market.
 Multinational strategy: the organization is involved in a
number of markets beyond its home country. But it needs
distinctive strategies for each of these markets because
customer demand and, perhaps competition, are different in
each country. Importantly, competitive advantage is
determined separately for each country.
 Global strategy: the organization treats the world as largely
one market and one source of supply with little local
variation. Importantly, competitive advantage is developed
largely on a global basis