Expert answer:Strategy and Technology, and chapter eight, Strate

  

Solved by verified expert:Chapter 7 Questions Describe standardization, format wars, and how standardization can lead to a format war. Once standardization occurs, how does the industry benefit? During a format war, describe how competition occurs and how a price war can take shape. Define first and second movers. How do these two entities interact within and industry, and who learns what as the industry takes shape? Chapter 8 Questions Why do companies go global? Once a company has decided to go global what entry modes could the company leverage to break into the global market? What additional benefits from economies of scale does a company receive from going global? Describe the main strategies available to an organization going global. Describe why each strategy may be chosen. What are the advantages and disadvantages of the different entry modes a company can use to break into the global market? Instructions: Please separate the questions and chapters and address the all questions with more details and discussions. And answer all the questions in your own words using API format.I am
discussion_on_chapter_7.pptx

discussion_on_chapter_8.pptx

Don't use plagiarized sources. Get Your Custom Essay on
Expert answer:Strategy and Technology, and chapter eight, Strate
Just from $10/Page
Order Essay

Unformatted Attachment Preview

CHAPTER 7
STRATEGY AND TECHNOLOGY
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
LEARNING OBJECTIVES
▪ Understand the tendency toward standardization
in many high-technology markets.
▪ Describe the strategies that firms can use to
establish their technology as the standard in a
market.
▪ Explain the cost structure of many hightechnology firms, and articulate the strategic
implications of this structure.
▪ Explain the nature of technological paradigm
shifts and their implications for enterprise
strategy.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2
LEARNING OBJECTIVES
▪ Explain the cost structure of many hightechnology firms, and articulate the strategic
implications of this structure.
▪ Explain the nature of technological paradigm
shifts and their implications for enterprise
strategy.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3
TECHNICAL STANDARDS AND FORMAT
WARS
Technical standards
• Set of technical specifications that producers adhere
to when making the product, or a component of it.
Format wars
• Battles to control the source of differentiation, and the
value that such differentiation can create for the
customer.
Dominant design
• Common set of features or design characteristics.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5
BENEFITS OF STANDARDS
▪ Guarantees compatibility between products and
their complements.
▪ Reduces confusion in the minds of consumers.
▪ Reduces production costs and risks associated
with supplying complementary products.
▪ Leads to low-cost and differentiation advantages
for individual companies.
▪ Helps raise the level of industry profitability.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
ESTABLISHMENT OF STANDARDS
▪ Standards emerge in an industry when the
benefits of establishing are recognized.
▪ Technical standards are set by cooperation
among businesses, through the medium of an
industry association.
▪ When the government sets standards they fall
into the public domain.
▪ Public domain: Any company can freely incorporate the
knowledge and technology upon which the standard is
based into its products.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7
NETWORK EFFECTS, POSITIVE
FEEDBACK, AND LOCKOUT
▪ Network effects: Network of complementary
products as a primary determinant of the
demand for an industry’s product.
▪ Positive feedback loops – Increase in demand for
a technology that triggers an increase in demand
for products that support it.
▪ Alternative standards get locked out as
consumers are unwilling to bear the switching
costs.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
8
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
9
STRATEGIES FOR WINNING A FORMAT
WAR
▪ Make network effects work in one’s favor and
against competitors.
▪ Build the installed base for the standard as
rapidly as possible.
▪ Ensure a supply of complements.
▪ Leverage killer applications.
▪ Killer applications: Applications or uses of a new
technology or product so compelling that customers
adopt them in droves, killing competing formats.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
10
STRATEGIES FOR WINNING A FORMAT
WAR
▪ Pursue aggressive pricing and marketing.
▪ Razor and blade strategy: Pricing the product low to
stimulate demand, and pricing complements high.
▪ Cooperate with competitors.
▪ License the format.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
11
COSTS IN HIGH-TECHNOLOGY
INDUSTRIES
▪ Similar cost economics.
▪ Very high fixed costs and very low marginal costs.
▪ Law of diminishing returns – Marginal costs rise
as a company tries to expand output.
▪ Profitability increases when a company shifts
from a cost structure with increasing marginal
costs to higher fixed costs with lower marginal
costs.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13
FIRST MOVER
▪ Firm that pioneers a particular product category
or feature by being first to offer it to the market.
▪ Creation of a revolutionary product results in a
monopoly position.
▪ First-mover advantage – Pioneering new
technologies and products that lead to slowing
the rate of imitation.
First-mover disadvantages: Competitive
disadvantages associated with being first.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
14
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
15
STRATEGIC IMPLICATIONS: CROSSING
THE CHASM
Advantages
• Opportunity to exploit
network effects and positive
feedback loops.
• Ability to establish brand
loyalty and increase sales
volume ahead of rivals.
• Ability to create switching
costs for customers and
accumulate knowledge.
Disadvantages
• Bear significant pioneering
costs.
• More prone to making
mistakes.
• Risk of building the wrong
resources and capabilities.
• Risk of investing in inferior or
obsolete technology
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
16
STRATEGIES FOR EXPLOITING FIRSTMOVER ADVANTAGES
▪ Develop and market the innovation.
▪ Develop and market the innovation jointly with
other companies.
▪ Through a strategic alliance or joint venture.
▪ License the innovation to others and allow them
to develop the market.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
17
FACTORS TO CONSIDER WHEN
SELECTING A STRATEGY
▪ Complementary assets
▪ Required to exploit a new innovation and gain a
competitive advantage.
▪ Help build brand loyalty and achieve rapid market
penetration.
▪ Height of barriers to imitation
▪ Higher the barriers, longer it takes for rivals to imitate.
▪ Give the innovator more time to build an enduring
competitive advantage.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
18
FACTORS TO CONSIDER WHEN
SELECTING A STRATEGY
▪ Capable competitors
▪ Companies that can move quickly to imitate the
pioneering company.
▪ Competitors’ capability depends on their research and
development skills and access to complementary
assets.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
19
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
20
TECHNOLOGICAL PARADIGM SHIFT
▪ Shifts in new technologies that:
▪ revolutionize the structure of the industry.
▪ dramatically alter the nature of competition.
▪ require companies to adopt new strategies for survival.
▪ Occur in an industry when:
▪ established technology is approaching or is at its natural
limit.
▪ new disruptive technology has entered the marketplace
and is invading the main market.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
21
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
22
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
23
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
24
STRATEGIC IMPLICATIONS FOR
ESTABLISHED COMPANIES
▪ Being aware of how disruptive technologies can
revolutionize markets is a valuable strategic
asset.
▪ Investing in new technologies that may become
disruptive technologies.
▪ Creating an autonomous operating division
solely for the disruptive technology.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
25
STRATEGIC IMPLICATIONS FOR NEW
ENTRANTS
▪ Do not face pressures to continue the existing
out-of-date business model.
▪ Do not have to worry about established:
▪ customer base.
▪ relationships with suppliers and distributors.
▪ Can focus their energies on the opportunities
offered by the new disruptive technology.
▪ Must decide whether to partner with an
established company or go solo.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
26
CHAPTER 8
STRATEGY IN THE GLOBAL ENVIRONMENT
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
LEARNING OBJECTIVES
▪ Understand the process of globalization and how
it impacts a company’s strategy.
▪ Discuss the motives for expanding
internationally.
▪ Review the different strategies that companies
use to compete in the global market place.
▪ Explain the pros and cons of different modes for
entering foreign markets.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2
GLOBALIZATION OF PRODUCTION AND
MARKETS
▪ Globalization of production and markets
▪ Increased as companies took advantage of lower
barriers to international trade and investment
▪ National markets started merging into one global
marketplace
▪ Implications
▪ Companies finding home markets inundated by foreign
competitors
▪ Critical to maximize efficiency, quality, customer
responsiveness, and innovative ability
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4
ATTRIBUTES THAT DETERMINE THE NATIONAL
COMPETITIVE ADVANTAGE IN A GLOBAL MARKET
Factor endowments
• Nation’s position in factors of production necessary to compete in an
industry
Local demand conditions
• Nature of home demand for the industry’s product or service
Related and supporting industries
• Presence or absence in the nation of supplier and related industries that
are internationally competitive
Firm strategy, structure, and rivalry
• Conditions in the nation governing:
• How companies are created, organized, and managed
• Nature of domestic rivalry
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5
EXPANDING THE MARKET:
LEVERAGING PRODUCTS
▪ A company can sell goods, developed at home,
internationally to increase its growth rate.
▪ Multinational company is one that does
business in two or more national markets.
▪ Success depends on the distinctive competencies
that underlie its production and marketing
process.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
REALIZING COST ECONOMIES FROM
GLOBAL VOLUME
▪ A company can realize cost savings from
economies of scale by:
▪ spreading the fixed costs and setting up production
facilities over its global sales volume.
▪ serving a global market, a company utilizes its
production facilities more intensively.
▪ bargaining down the cost of key inputs with suppliers.
▪ increasing its sales volume more rapidly.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7
LOCATION ECONOMIES
▪ Economic benefits that arise from performing a
value creation activity in an optimal location.
▪ Help a company:
▪ achieve a low-cost position.
▪ to differentiate its product offering.
▪ to gain competitive advantage over rivals who base all
their value creation activities at a single location.
▪ Transportation costs and trade barriers
complicate the process of realizing location
economies.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
8
LEVERAGING THE SKILLS OF GLOBAL
SUBSIDIARIES
▪ Managers must:
▪ realize that valuable skills can arise anywhere within a
firm’s global network.
▪ establish an incentive system that encourages local
employees to acquire new competencies.
▪ have a process for identifying valuable new skills
created in a subsidiary.
▪ help transfer valuable skills within the firm.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
9
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
10
PRESSURES FOR COST REDUCTIONS
▪ To respond to them, a firm must try to lower the
costs of value creation.
▪ Pressures are intense:
▪ in industries producing commodity-type products.
▪ for products that serve universal needs.
▪ when major competitors are based in low-cost
locations, there is excess capacity, and consumers face
low switching costs.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
11
PRESSURES FOR LOCAL
RESPONSIVENESS
▪ To respond to them, a firm must differentiate its
products and marketing strategy from country to
country.
▪ Raises a company’s cost structure
▪ Occurs as a result of:
▪ differences in customer tastes and preferences.
▪ differences in distribution channels.
▪ host government demands.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13
GLOBAL STANDARDIZATION STRATEGY
▪ Business model based on pursuing a low-cost
strategy on a global scale.
▪ Companies market a standardized product
worldwide to reap maximum benefit from
economies of scale.
▪ Most appropriate when:
▪ pressures for cost reductions are strong.
▪ demand for local responsiveness is minimal.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
14
LOCALIZATION STRATEGY
▪ Focuses on increasing profitability by customizing
a company’s goods.
▪ Most appropriate when:
▪ consumer tastes and preferences differ across nations.
▪ cost pressures are not very strong.
▪ Benefit – Product value raises in the local market
▪ Limitation – Cost reduction by mass-producing a
standardized product is not possible
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
15
TRANSNATIONAL STRATEGY
▪ Simultaneously:
▪ achieves low costs.
▪ differentiates the product offering across geographic
markets.
▪ fosters a flow of skills between global subsidiaries.
▪ Difficult to pursue because it places conflicting
demands on a company
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
16
INTERNATIONAL STRATEGY
▪ Occurs when:
▪ companies establish manufacturing and marketing
functions in each major country they do business in.
▪ local customization of product offering and marketing
strategy is limited in scope.
▪ Most appropriate when:
▪ product serves universal needs.
▪ companies are not confronted with cost pressures.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
17
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
18
THE CHOICE OF ENTRY MODE
Exporting
• Manufacturing the product in a centralized location and then exporting it to
other national markets
Licensing
• Licensees purchase the rights to produce a company’s product in their
country for a negotiated fee
Franchising
• Specialized form of licensing in which the franchiser expects the franchisee
to abide by rules governing how it does business
Joint venture
• Most typical form is a 50/50 venture
Wholly owned subsidiary
• Parent company owns one hundred percent of the subsidiary’s stock
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
19
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
20
DISTINCTIVE COMPETENCIES AND
ENTRY MODE
▪ If a company’s distinctive competency is its
technological expertise:
▪ licensing and joint-ventures should be avoided.
wholly owned subsidiary should be given preference.
▪ Combination of franchising and subsidiaries for
service companies whose distinctive competency
is management proficiency.
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
21
PRESSURES FOR COST REDUCTION AND
ENTRY MODE
▪ Companies pursuing global or transnational
strategies prefer establishing a wholly owned
subsidiary because:
▪ it gives them tight control over marketing to coordinate
a globally dispersed value chain.
▪ it gives them tight control over a local operation.
▪ enables use of profits generated in one market to
improve competitive position in another.
©2017 Cengage Learning. All Rights Reserved. May not be …
Purchase answer to see full
attachment

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 30% with the discount code ESSAYSHELP