Chapter 6 Strategy Formulation and Implementation - Part 1
Chapter 6 Strategy Formulation and Implementation - Part 1
International
Management:
Culture, Strategy, and
Behavior
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Strategic Management
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Approaches to Formulating and Implementing Strategy
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Economic Imperative
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Economic Imperative
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Political Imperative
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Quality Imperative
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Quality Imperative
• Many MNCs make quality a major part of their overall strategy because
they have learned this is the way to increase market share and profitability.
Consider the game console industry.
In the early 2000s, Sony’s PlayStation 2 left Nintendo fighting for
market share with its less popular GameCube.
A few years later, Nintendo introduced the Wii, leaving Sony scrambling
with its less successful PlayStation 3.
By 2017, Sony successfully launched PlayStation 4, outpacing sales of
both the WiiU and Switch consoles.
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Quality Imperative
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Administrative Coordination
When Walmart expanded into Latin Many large MNCs work to combine the
economic, political, quality, and administrative
America, they faced local tastes approaches to strategic planning.
differed and stiff competition. For example, IBM relies on the economic imperative when
it has strong market power—especially in less developed
• Timely deliveries were difficult. countries.
It relies on political and quality imperatives when the
• Suppliers could not produce market requires a calculated response—such as European
products to Walmart’s countries.
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Global and Regional Strategies
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Figure 8-1: Global Integration vs. National Responsiveness
Source: Bartlett, Christopher A., and Sumantra Ghoshal. Managing Across Borders: The Transnational Solution. Cambridge, MA: Harvard Business
© McGraw-Hill Education School Press, 1998. 12
Figure 8-1: Global Integration vs. National Responsiveness
This four-square matrix compares global integration from low to high on the
vertical axis and national responsiveness from low to high on the horizontal axis,
breaking the space into four quadrants.
Quadrant one is in the upper left corner—high on global integration and low on
national responsiveness. In terms of economies of scale, this situation leads to
global strategy based on price competition.
Quadrant two is in the lower left corner, low on both global integration and
national responsiveness. This mixed approach is often referred to as international
strategy and it combines low demand for integration and responsiveness.
Quadrant three is in the upper right corner, high on both global integration and
national responsiveness. Transnational strategy refers to integrated strategy
emphasizing both global integration and local responsiveness.
Quadrant four is in the lower right corner, low on global integration but high on
national responsiveness. This quadrant is referred to as multi-domestic strategy
which is defined as a differentiated strategy emphasizing local adaptation.
Source: Bartlett, Christopher A., and Sumantra Ghoshal. Managing Across Borders: The Transnational Solution. Cambridge, MA: Harvard Business
© McGraw-Hill Education School Press, 1998. 13