Summary –
International Business Strategy
Lectures
By: Shane van Hekken
1
,Chapter 3
2
, Chapter 3
Lecture 1 –
What is international strategy?
With the opportunities and challenges found in cross-border environments
While overcoming the disadvantages of being a foreign company
And/or capitalizing on the advantages of being a foreign company
And/or capitalizing on the advantages of having an international network
Swapfiets
Strategy is to build upon its unique resources and capabilities (business model, service excellence, distinctive
branding, partnerships with suppliers) – “the Netflix of bikes”- ‘bicycles as a service
International strategy relies on
Market outside the Netherlands (focusing on cities)
Started with the cities with the biggest cycling infrastructure and culture
Local adaption
o Cultural differences. In the Netherlands they knew straight after a pitch if the other party was
interested. In the UK they said after the pitch: HMMM interesting. But then afterwards there was
ambiguity.
Challenges:
Paris has a good cycling infrastructure. However, there are not many places to lock your bike.
Apple
Strategy is to build upon its unique resources and capabilities (technology, brand, complementary products)
International strategy relies on:
Global markets for smartphones and electronic products
Global opportunities for sourcing and manufacturing – has a global network, even from the Netherlands
Increasingly taping into foreign knowledge and partnering
Does apple change its products much overseas?
Apple encounters many difficulties in foreign environments
Apple stores around the world are exactly the same. You would not know in which country you are.
Ikea
International strategy relies on:
Global opportunities for design, sourcing and manufacturing – has a global network of suppliers
Global customers
Does IKEA change its products much overseas
o Indian furniture can beat the heat and humidity
o Chinese IKEA showrooms get their very own balconies
o Glass size in the USA. People in the US like bigger glass (for example with vases).
3
, Chapter 3
Elements of International Strategy (Benito, 2015)
The WHY, WHERE, WHAT and HOW of internationalization
WHY WHAT
International Motives: Marketing & Sales
Market seeking Manufacturing
Efficiency seeking Purchasing, extraction
Resource seeking R&D
Strategic asset seeking
HOW
WHERE Export
Location choice: Licensing
Attractiveness of country Franchising
“Distance” to home country JV/Alliance
FDI:
o Brownfield
o Greenfield
Conceptual foundations of international strategy
What are the core conceptual foundations of international business strategy?
What types of multinational enterprise exist?
Foundations of international business strategy
1. Internationally transferable (or non-location bound) firm-specific advantages (FSAs)
2. Non-transferable (or location-bound) FSAs
3. Location advantages
4. Investment in – and value creation through – resource recombination
5. Complementary resources of external actors
6. Bounded rationality
7. Bounded reliability
+ Advantages of foreignness: cultural attraction and arbitraging
1&2 FSAs (Transferable & Non-transferable)
The MNE’s unique resource base
Physical resources Downstream knowledge
Financial resources Administrative knowledge
Human resources Reputational resources
Upstream knowledge
FSAs that are not transferable abroad:
Location-bound FSAs
o Think about FEBO, Swapfiets, Toyota.
“The core competence of the corporation” (Prahalad and Hamel, 1990).
Firms-specific advantages (=core competencies)
Firm is a portfolio of ‘core competencies’: higher-order FSAs, i.e., the firm’s routines and recombination
capabilities
A core competence should:
1. Provide access to a wide variety of markets, and
4
International Business Strategy
Lectures
By: Shane van Hekken
1
,Chapter 3
2
, Chapter 3
Lecture 1 –
What is international strategy?
With the opportunities and challenges found in cross-border environments
While overcoming the disadvantages of being a foreign company
And/or capitalizing on the advantages of being a foreign company
And/or capitalizing on the advantages of having an international network
Swapfiets
Strategy is to build upon its unique resources and capabilities (business model, service excellence, distinctive
branding, partnerships with suppliers) – “the Netflix of bikes”- ‘bicycles as a service
International strategy relies on
Market outside the Netherlands (focusing on cities)
Started with the cities with the biggest cycling infrastructure and culture
Local adaption
o Cultural differences. In the Netherlands they knew straight after a pitch if the other party was
interested. In the UK they said after the pitch: HMMM interesting. But then afterwards there was
ambiguity.
Challenges:
Paris has a good cycling infrastructure. However, there are not many places to lock your bike.
Apple
Strategy is to build upon its unique resources and capabilities (technology, brand, complementary products)
International strategy relies on:
Global markets for smartphones and electronic products
Global opportunities for sourcing and manufacturing – has a global network, even from the Netherlands
Increasingly taping into foreign knowledge and partnering
Does apple change its products much overseas?
Apple encounters many difficulties in foreign environments
Apple stores around the world are exactly the same. You would not know in which country you are.
Ikea
International strategy relies on:
Global opportunities for design, sourcing and manufacturing – has a global network of suppliers
Global customers
Does IKEA change its products much overseas
o Indian furniture can beat the heat and humidity
o Chinese IKEA showrooms get their very own balconies
o Glass size in the USA. People in the US like bigger glass (for example with vases).
3
, Chapter 3
Elements of International Strategy (Benito, 2015)
The WHY, WHERE, WHAT and HOW of internationalization
WHY WHAT
International Motives: Marketing & Sales
Market seeking Manufacturing
Efficiency seeking Purchasing, extraction
Resource seeking R&D
Strategic asset seeking
HOW
WHERE Export
Location choice: Licensing
Attractiveness of country Franchising
“Distance” to home country JV/Alliance
FDI:
o Brownfield
o Greenfield
Conceptual foundations of international strategy
What are the core conceptual foundations of international business strategy?
What types of multinational enterprise exist?
Foundations of international business strategy
1. Internationally transferable (or non-location bound) firm-specific advantages (FSAs)
2. Non-transferable (or location-bound) FSAs
3. Location advantages
4. Investment in – and value creation through – resource recombination
5. Complementary resources of external actors
6. Bounded rationality
7. Bounded reliability
+ Advantages of foreignness: cultural attraction and arbitraging
1&2 FSAs (Transferable & Non-transferable)
The MNE’s unique resource base
Physical resources Downstream knowledge
Financial resources Administrative knowledge
Human resources Reputational resources
Upstream knowledge
FSAs that are not transferable abroad:
Location-bound FSAs
o Think about FEBO, Swapfiets, Toyota.
“The core competence of the corporation” (Prahalad and Hamel, 1990).
Firms-specific advantages (=core competencies)
Firm is a portfolio of ‘core competencies’: higher-order FSAs, i.e., the firm’s routines and recombination
capabilities
A core competence should:
1. Provide access to a wide variety of markets, and
4
