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Restricted National Restricted National Market ScopeMarket Scope (b) (b)
- - national market development over time
- sustainability of national strategies - sustainability of national strategies
- measuring competitive advantage- measuring competitive advantage
- inter-market comparison- inter-market comparison
- benchmarking*- benchmarking*
Károly Barakonyi - 5 2
Sustainability of Sustainability of national strategiesnational strategies
• move beyond the present positionmove beyond the present position
• consider underlying dynamic of the consider underlying dynamic of the marketmarket
• existence of forces toward localization existence of forces toward localization or globalizationor globalization
• market convergence or divergence: market convergence or divergence: pendelum (Fig.5.5)pendelum (Fig.5.5)
Károly Barakonyi - 5 3
Industry drivers
GlobalisationGlobalisation LocalisationLocalisation
Industry drivers
Figure 5.5. The pendulum of change: convergence versus divergence
External dynamics make reliance on
national strategies
more difficult
External dynamics
assist
continuation of national strategies
Károly Barakonyi - 5 4
Industry driversIndustry drivers need to revisited: need to revisited:– customerscustomers– costcost– countrycountry– competitorscompetitors
Evaluate the extent of Evaluate the extent of each factorseach factors
Making an Making an overall assessmentoverall assessment; grouping:; grouping:– Product-market demandProduct-market demand: variety of customer demand across : variety of customer demand across
markets markets increasing or decreasing?increasing or decreasing?– Competitive interdependenceCompetitive interdependence: are there significant cost/benefit : are there significant cost/benefit
from supplying from supplying more than one market?more than one market?– Use Use of flexible manufacturing systems or strategic alliance brings of flexible manufacturing systems or strategic alliance brings
benefits becoming benefits becoming pan-nationalpan-national producer? producer?
Evaluate past and future industry trendsEvaluate past and future industry trends
Importance of internal forces!Importance of internal forces!
Károly Barakonyi - 5 5
GlobalisationGlobalisation LocalisationLocalisation
High Med Low Industry driversIndustry drivers Low Med High
Customer driversCustomer driversCustomer requirements
DistributionMarketing
Cost driversCost driversNew product development
Scale economiesTransport costsCountry driversCountry driversTrade policies
Technical standardsCultural/regulatory barriers
Competitive driversCompetitive driversCompetitive interdependence
Entry of new competitors
OverallOverall
Figure 5.6. The framework for indentifying and assessing external industry drivers
Károly Barakonyi - 5 6
GenerallyGenerally: once one competitor has moved
in international strategy direction, then others will follow!
If local / global forces finaly If local / global forces finaly balanced:balanced:
• range of companies using mix of strategies
• remain as long as underlying dynamics pushing in one direction
Károly Barakonyi - 5 17
Benchmarking:Benchmarking:
Continuous search for and application of significantly better practices that lead to superior business performance.
Key elements:•identificationidentification of world class performance - quantify performance gap•assessment of the processesprocesses which generated this performance - deeper understanding (how it is done)•seeking to applyapply such processes to our organization
Related to BSC: identify direct driversRelated to BSC: identify direct drivers
Means of continuous learning about process improvements
Károly Barakonyi - 5 18
2Develop measurement formats for key management processes
3 Select benchmark
candidates4A
Measure performance of best in class firm
4B
Measure own company performance
5 Specify action plans to
’meet and surpass'
Implement and monitor results
Continue process by returning to Box 1
Figure 5.7: The benchmarking process
6
7
Data Data analysisanalysis
1Determining which processes, practices, methods to measure