Summary: International Strategy

Read the summary and the most important questions on International strategy

• 1 Introduction strategy

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• What is the purpose of strategy and in what 4 ways can you define these?

  To define and express the purpose of an organisation to stakeholders.
  
  This can be done via:
  
  Mission statement: Why do we exist?
  
  Vision statement: Future image
  
  Statement of corporate values: Guidance
  Statement of objectives: SMART Slide 16

• 2 The environment

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• What are seen as the 4 different layers of a business environment? And with which tools can they be analysed?

  1. The macro-environment: PESTEL
  2. Industry/sector: Porter's 5 forces
  3. Competition/ market: Strategic group analysis & blue oceans
  4. The organisation

• Into which 6 groups does PESTEL categorize the environmental factors?

  1. Political= Governmental policies, trade policies,..
  
  2. Economical= Interest rates, income, inflation,..
  
  3. Social= demographics, Changes in lifestyle,..
  
  4. Technological= New inventions and technological developments (internet)
  
  5. Ecological= Regulations environmental protection, global warming       
  
  6. Legal= Legislation regarding competition, privacy,.. (can be seen as 1 factor with political)

• What is a trend?

  A move in a certain direction for a longer period. They can be analysed on 3 levels: 
  
  Macro: Influence on wider society
  Meso: Influence on industry/market
  Micro: Influence on your company

• What is the difference between an industry and a market?

  An industry is a group of firms producing similar products or services. An industry is usually made up by several markets.

• What does a 5 forces analysis offer?

  It helps to identify the attraxtivenss of an industry in terms of 5 competitive forces. When the 5 forces are high, the industry is not attractive to compete in.

• Explain the threat of entry and its barriers:

  The threat of entry is low when the barriers to entry are high.
  
  5 types of entry barriers:
  -Scale and experience
  - Acces to supply or distribution channels
  - Expected retaliation
  - Legislation or government action (patent, import tariffs,..)
  - Differentiation (customer loyalty )

• Explain the threat of substitutes and why customers would want to shift towards a substitute

  The higher the treat of substitution, the less attractive an industry is likely to be.
  
  Customers will switch when:
  -Price/performance ratio of the substitute is higher
  - Innovation that improves customer satisfaction
  - Extra-industry effects

• Explain the bargaining power of buyers:

  Powerfull buyers can demand cheap prices or service improvements and this reduces profits when:
  
  -Concentrated buyers 
  - Low switching costs ( switch between suppliers)
  - Buyer competition threat

• Explain the bargaining power of suppliers:

  Factors increasing supplier power is opposite to power of buyers.