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Global Strategic Management

MGMT 688

Purdue University

Professor Fabrice Lumineau

Class 1

Outline for today

Introduction: getting to know each other

Overview of the course

Why is it a good choice to follow this course?

Fundamental issues in strategy around the globe

Overview of the syllabus

Requirements and grading

Professional conduct

Organization of the course

Case studies

General introduction

Professor Fabrice LumineauKrannert Building Office 530

lumineau@purdue.edu

Meetings by appointment

Academic background PhD in Strategic Management

MA in Business

MSc in Economics

Main industry experience Project manager in investment banking

(Societe Generale Investment Banking)

Project manager in insurance industry (AXA Corporate Solutions)

Manager of a wine sales outlet (Nicolas)

Academic experience Have worked at 4 schools in the top 60 MBA

programs worldwide

Have taught undergrad, MBA, PhD, and executive education courses in strategy and global strategy

Have published in the top reviews in strategy (AMJ, OS, OSt, SMJ, SO, JOM, etc.)

Research interests Partnerships between organizations

Role of the contract and trust in collaborative strategies

Dispute negotiation dynamics

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Some (possibly) interesting things

about me

French background

I have lived in

France

The US (Ohio and Indiana)

Germany

Canada

Switzerland

Australia

I have visited 25+ countries on 4 continents

I studied English, German, Italian... and Ancient Greek

My thoughts on teaching this class

Pass on the dynamism of international strategy

Guide you to see how assumptions change in an

international context

Be more aware of certain companies and regions

Get students involved

See how different pieces of global strategy fit together

Provide academic and managerial skills you can use

outside the classroom

Challenge each other to do our best

Have fun!

Introducing yourself

Name Major/Concentration Previous International business courses

Home country Countries/regions visited

Work Experience Career Interests

Questions you want answered during course

Something unique or interesting about you

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What is YOUR definition

of globalization?

Globalization is

Professor Roland RobertsonSociologist and theorist of globalizationUniversity of Aberdeen

What is globalization?

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The International Monetary Fund identifies 4 key

aspects of globalization:

Trade and transactions

Capital and investment movements

Migration of people

The dissemination of knowledge

Is the world flat?

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What is globalization?

A new phenomenon since the late 20th century? Transportation and communication revolutions

Breakdown of artificial barriers in trade and investment

A part of long-run human history?

Assyrian, Phoenician, and Roman empires

In red: silk road

In blue: spice trade routes

Challenges of global strategy

Personal view vs professional view

Conflicting information

Focusing on the past rather than the future

Mix of business and political agendas

Fast pace of change

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What is global strategy?

Global is a dangerous word!!!

Wal-Mart went to Mexico in 1991: Did it go global?

Everything becomes global when you read the newspaper

Traditional global strategyTreating different countries as one worldwide or global market

Mattels introduction of new toys

Development of new products with global appeal

Introduction of Barbie Rapunzel in 59 countries simultaneously

Ad campaign broadcast around the world

But that strategy has backfired repeatedly

There is no world car, no world drink, no world MTV

Toyota Camry: Best-selling car in the US, but not even top-5 best-selling car in Japan

Need a more balanced viewcovering global and local aspects

Global strategy = Strategies of firms around the globe Both international and non-international (domestic)

Both developed and emerging economies

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No one-size-fits-all strategy!

Coke Classic: the so-called world drink tastes different around the world

Varying sugar content

Country-specific advertisements

Very few standardized products and services

on a worldwide basis

Why study global strategy?

Try to identify 3 reasons why it might be helpful to you

to study global strategy

Industry-based

Competition

Firm-specific

Resources &

capabilities

Institutional

Conditions

Strategic

DecisionsImplementation/

Performance

What determines

the international success of failure of firms?

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Syllabus Overview

General learning objectives

To understand what determines the international success and failure of companies

To understand business strategies in developed economies and emerging economies

Gain an understanding of strategies of local firms

To learn about trends in international business and strategy that impact firms

Texts

Required: Course pack (including the case studies): available at the Boiler Copymaker Center, Room 157 in

Purdue Memorial Union)

Optional: Textbook: Global Strategy, 2nd edition, South Western Cengage Learning

Case studies

Case Country Industry

Wal-Mart in Europe Germany Retail

Kent Chemical US Chemicals

Levendary Caf China Restaurant

Eli Lilly India Pharmacy

Scotts Miracle-Gro China Garden products

P&G Japan Japan Personal care products

Development of a multinational personnel development system

Hong Kong Industrial products

Celtel Nigeria Nigeria Telecommunications

Carlson Company Costa Rica Travel and tourism

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Syllabus Overview

Requirements & Grading

Discussion Participation 40%

Team Project 40%

Country Presentation 20%

The course relies heavily on the case method

Put yourself in the role of the decision maker Develop an understanding of real business issues

What are good comments? Integrate concepts from course readings into class

discussions

Are supported with well-developed arguments

Contribute pertinent and thoughtful insights

Raise questions that constructively challenge others; and/or

Add to our knowledge by sharing personal experiences relevant to the course

The case method does not provide a correct answer You must be ready to discuss ALL cases

Discussion Participation

Participation

Simply attending class is not enough to get more than a C

You must be ready to discuss ALL cases

You need to be actively engaged in class discussions

Bring your name tag to every class

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Team Project

Group-based exercise:

To write your own case study (from your own data)

And your own case analysis

Total: 10 pages + appendix

Your case should be written around by 1 guiding question in global strategy

15-minute presentation in Class 12 or 13

See the syllabus for details

Country Presentation

Individual or group project (by country of origin)

15-minute presentation

What should we know to do business in this country?

Focus on practical recommendations like if you had to brief a colleague going for the 1st time to this country

Examples:

The Grandes Ecoles system in France and its influence on business relationships The business etiquette in New Zealand The role of Islamic law as dominant legal system in Saudi Arabia The business consequences of ageing population in Italy

Presentations

What should we know to do business in this country?

15-minute presentation

What do we learn?

Engage your audience! Be creative

Focus on international dimensions

Focus on practical recommendations

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Assigning final grades

Krannert Guidelines:

A/A-: 40-50%

B+/B: 40-55%

B-: 0-10%

C+ or lower: 0-5%

Krannert Guidelines: Mean no higher than 3.42

Arriving on time

Minimize disruptions: phones turned off

or make prior arrangement

Being prepared for class

Contributing to class discussion

Academic integrity: Purdue University and the Krannert School of Management expect the highest standards of academic honesty

Your learning experience is what YOU make out of it!

Syllabus Overview

Professional conduct

In the 90 we had this American sense of Manifest Destiny. We thought

we could just take our existing products and ship them to other parts

of the world and they would be naturally hungered for, somewhat like

Coca-Cola or Pepsi Cola.

Well, the difference is that in every culture you go into, soup is one of the first foods that was discovered by that culture. You cant just say Well, we

like chicken noodle here so theyll like it in China!

Half the worlds soup consumption is in Russia and China and it all

happens to be homemade.So what we had to do was put teams on the ground in Russia and China for

3 years, just living with the consumers and studying how they eat soup and trying to uncover a way for

us to participate in that soup occasion.

We discovered they werent prepared to accept ready-to-serve

products.

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What are the main decisions Campbell had to make?

The changing shape

of the global economy

Relative decline of the US

By 2020, the Chinese economy could be larger than that of the US and the economy of India will

approach that of Germany

Todays developing nations may account for more

than 60% of world economic activity by 2020 (source: World Bank)

The changing nature of the MNC

The Global 500 is increasingly global

The US still dominates the list (133 firms vs 185 in 2001)

China: 61 firms (vs 12 in 2001)

Emerging giants from China (Huwei Technologies, Lenovo Group, Baosteel), India (Infosys Technologies,

Tata Group, Bharti Airtel), Brazil (Embraer, Votorantim

Group), Mexico (Group Bimbo), Russia (Gazprom),

Indonesia (Bumi Resources)

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Wrap-up and set-up for next class

Concepts of global strategy and globalization

I will post teams and schedule on Katalyst

Each student has to be in 2 teams:

A team for writing your own case study

A team for country presentation

Please let me know ASAP if you do not have 2 teams