International International Strategy and Strategy and OrganizationOrganization

Planning and StrategyPlanning and Strategy

Planning Strategy

Identifying and selecting objectives and deciding how to achieve those objectives

Set of planned actions thatmanagers take to help a

company meet its objectives

Strategy-Formulation ProcessStrategy-Formulation Process

Identify Mission and GoalsIdentify Mission and Goals

Mission statements must consider:

Company activities Business objectives Stakeholders Stockholders Customers Residents Environment

and much more…

Identify Core CompetencyIdentify Core CompetencyIdentify Core CompetencyIdentify Core Competency

Special ability of a company thatSpecial ability of a company thatcompetitors find extremely difficultcompetitors find extremely difficult

or impossible to equalor impossible to equal

Special ability of a company thatSpecial ability of a company thatcompetitors find extremely difficultcompetitors find extremely difficult

or impossible to equalor impossible to equal

Coordination of multiple skillsCoordination of multiple skills

Lengthy period to developLengthy period to develop

Difficult to imitateDifficult to imitate

Value-Chain AnalysisValue-Chain Analysis

Each activity isa source of either

strength or weakness

Insights gained are fed into the strategy formulation process

Divide company activities into primary and support activities and identify those

that create value for customers

Value Chain ComponentsValue Chain Components

Primary Activities.Primary Activities.

Inbound Logistics.

Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organisation.

Operations.

This is where goods are manufactured or assembled. Individual operations could include room service in an hotel, packing of books/videos/games by an online retailer, or the final tune for a new car's engine.

Outbound Logistics.

The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer.

Marketing and Sales.

In true customer orientated fashion, at this stage the organisation prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix.

Service.

This includes all areas of service such as installation, after-sales service, complaints handling, training and so on.

Support Activities.Support Activities.

Procurement.

This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. They will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organisations), and ePurchasing (using IT and web-based technologies to achieve procurement aims).

Technology Development.

Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments.

Human Resource Management (HRM).

Employees are an expensive and vital resource. An organisation would manage recruitment and s election, training and development, and rewards and remuneration. The mission and objectives of the organisation would be driving force behind the HRM strategy.

Firm Infrastructure.

This activity includes and is driven by corporate or strategic planning. It includes the Management Information System (MIS), and other mechanisms for planning and control such as the accounting department.

Business EnvironmentBusiness Environment

National differences are inherent in analyzing a

company’s unique abilities

Cultural differences

Political processes

Legal matters

Economic systems

Labor issues

Consumer forces

and much more…

Multinational/Multidomestic Multinational/Multidomestic StrategyStrategy

Adapting products andtheir marketing strategies

in each national marketto suit local preferences

– Difficult to exploit economies of scale

+ Respond quickly to buyer preferences

Multi-Domestic StrategyMulti-Domestic Strategy

Business units in each country are independent Business units in each country are independent of each other of each other

Assumes markets differ by country or regions

Focus on competition in each market

Prominent strategy among European firms due to Prominent strategy among European firms due to broad variety of cultures and markets in Europebroad variety of cultures and markets in Europe

Strategy and operating decisions are decentralized Strategy and operating decisions are decentralized to strategic business units (SBU) in each countryto strategic business units (SBU) in each country

Products and services are tailored to local marketsProducts and services are tailored to local markets

Global StrategyGlobal Strategy

Offering the sameproducts using the same

marketing strategy inall national markets

– May overlook varying buyer preferences

+ Cost savings from standardization

Products are standardized across national marketsProducts are standardized across national markets

Decisions regarding business-level strategies are Decisions regarding business-level strategies are centralized in the home officecentralized in the home office

Strategic business units (SBU) are assumed to be Strategic business units (SBU) are assumed to be interdependentinterdependent

Emphasizes economies of scale

Often lacks responsiveness to local marketsOften lacks responsiveness to local markets

Requires resource sharing and coordination across Requires resource sharing and coordination across borders (which also makes it difficult to manage)borders (which also makes it difficult to manage)

Global StrategyGlobal Strategy

Levels of Company StrategyLevels of Company Strategy

Growth StrategyGrowth Strategy

Internally generated growth

Mergers and acquisitions

Joint ventures

Strategic alliances

Increase the scale (size of activities)or scope (kinds of activities) of operations

Retrenchment StrategyRetrenchment Strategy

Reduce the scale or scopeof a corporation’s businesses

Conditions Actions

Poor economic conditions

Increased competition

Lay off workers

Close inefficient factories

Sell unprofitable businesses

Stability StrategyStability Strategy

Guard against change and avoidgrowth or retrenchment

Guard against change and avoidgrowth or retrenchment

No opportunities or

threats

Strengths fully exploited

Weaknesses fully

protected

Stated objectives are

met

Combination StrategyCombination Strategy

Invest inpromising units

Retrench forless exposure

Stabilizeother units

Mix of growth, retrenchment, and stability strategies across a corporation’s business

units

Business-Level StrategiesBusiness-Level Strategies

Low-Cost StrategyLow-Cost StrategyLow-Cost StrategyLow-Cost Strategy

Exploit economies of scale to have the lowestExploit economies of scale to have the lowestcost structure of any competitor in an industrycost structure of any competitor in an industryExploit economies of scale to have the lowestExploit economies of scale to have the lowestcost structure of any competitor in an industrycost structure of any competitor in an industry

Mantra is cutting costsMantra is cutting costsMantra is cutting costsMantra is cutting costs

Quality remains importantQuality remains importantQuality remains importantQuality remains important

Scale is barrier for new entrantsScale is barrier for new entrantsScale is barrier for new entrantsScale is barrier for new entrants

Perhaps low customer loyaltyPerhaps low customer loyaltyPerhaps low customer loyaltyPerhaps low customer loyalty

Differentiation StrategyDifferentiation Strategy

DifferentiatorsDifferentiatorsDifferentiatorsDifferentiators

Brand imageBrand imageBrand imageBrand image

Product designProduct designProduct designProduct design

QualityQualityQualityQuality

EffectsEffectsEffectsEffects

Customer loyaltyCustomer loyaltyCustomer loyaltyCustomer loyalty

Portion of market onlyPortion of market onlyPortion of market onlyPortion of market only

Price premiumPrice premiumPrice premiumPrice premium

Design products to be perceived as unique

by buyers throughout an industry

Higher production costs Higher production costs Higher production costs Higher production costs

Focus StrategyFocus StrategyFocus StrategyFocus Strategy

Focus on narrowly defined market segment bybeing the low-cost leader, differentiating, or bothFocus on narrowly defined market segment by

being the low-cost leader, differentiating, or both

Many sub-segments todayMany sub-segments todayMany sub-segments todayMany sub-segments today

Need distinctive productNeed distinctive productNeed distinctive productNeed distinctive product

Specific geography, ethnicity, etc.Specific geography, ethnicity, etc.Specific geography, ethnicity, etc.Specific geography, ethnicity, etc.

Organizational StructureOrganizational Structure

Centralizeddecision making

Decentralizeddecision making

+ Coordination is paramount+ Financial control and cost savings

+ Local responsiveness is key+ Fast-changing environment

Arguments for CentralizationArguments for Centralization

easier to coordinate

decisions consistent with organizational objectives

means to push through major changes

avoids duplication of activities

Arguments for DecentralizationArguments for Decentralization

top management overburdened

more motivation at lower levels

more flexibility

better decisions on the spot by people directly involved

more accountability

International Division International Division StructureStructure

International Area StructureInternational Area Structure

Global Product StructureGlobal Product Structure

Global Matrix StructureGlobal Matrix Structure

Self-managedSelf-managedteamteam

Employees from onedepartment take onresponsibilities offormer supervisors

Self-managedSelf-managedteamteam

Employees from onedepartment take onresponsibilities offormer supervisors

Cross-functionalCross-functionalteamteam

Group of employeesfrom similar levels but

different functionaldepartments

Cross-functionalCross-functionalteamteam

Group of employeesfrom similar levels but

different functionaldepartments

GlobalGlobalteamteam

Top managers fromheadquarters andsubsidiaries solvecompany problems

GlobalGlobalteamteam

Top managers fromheadquarters andsubsidiaries solvecompany problems

Work TeamsWork Teams

It is the mission of Malaysia Airlines System Berhad, as a corporation, to provide a transport service that ranks among the best in terms of safety, comfort and punctuality, distinguished and loved for its personal touch and warmth. We aim to set new world standards continually with our enhanced in-flight services, reliable ground support and excellent infrastructure and to respond to consumer demand for worldwide coverage.

Malaysia Airlines

TMTM

Vision "Our vision is to be the Communications Company of choice - focused on

delivering Exceptional Value to our customers and other stakeholders“

MissionTo achieve our vision, we are determined to do the following:

Be the recognised leader in all markets we serve. Be a customer-focused organisation that provides one-stop total solution. Build enduring relationships based on trust with our customers and partners. Generate shareholder value by seizing opportunities in Asia Pacific and other selected regional markets. Be the employer of choice that inspire performance excellence.