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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
Module 9: International Competitive Strategy
Use this Instructor Guide to incorporate the unique content of this product and facilitate your
Face-to-Face, Online, and Hybrid classes. This guide has been designed to be interactive and
links have been created within each title in the Table of Contents to guide you to each section.
You can also link back to the main page by clicking at the button at the bottom of each page.
Here is the Table of Contents highlighting what you’ll be able to find to support you in teaching
this module:
YOUR CONTENT
Summary
Learning Objectives
Key Terms & Key Terms with Definitions
Content Outline
CONNECT TOOLS FOR CLASS REPARATION
SmartBook
What is SmartBook?
How Does SmartBook Help You/Students?
How to assign SmartBook to ensure students come to class prepared?
ENGAGEMENT & APPLICAT ION (FACE TO FACE & ONLINE & HYBRID)
BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS
IB IN PRACTICE
GLOBAL DEBATE
GET THAT JOB! FROM BACKPACK TO BRIEFCASE
Critical Thinking Questions
Global Edge Research Task
MiniCase
Bonus Activities
Video Suggestions
Team Exercises
Supplemental Lecture
Tools & Tricks
Controversial Issues
Teaching Suggestions
CONNECT TOOLS FOR ASSESSEM ENT OF L EARN ING
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
2 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
Interactive Applications
Assigning Interactives
Time-Saving Hints:
Connect Content Matrix
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
3 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
YOUR CONTENT
SUMMARY
This module provides an overview of strategic considerations that international companies
must take into account when competing within an international business environment. In the
global marketplace, a company must be able to quickly identify and exploit opportunities
wherever they may occur. To do this effectively, managers must fully understand why, how,
and where they intend to do business, now and over time. Managers need to have a clear
understanding of their company’s mission and vision and an understanding of how they plan to
compete with other companies. In order to meet these challenges, managers need to
understand their company’s strengths and weaknesses along with those of their competitors.
They must also be able to identify opportunities and threats. Strategic planning provides
valuable tools for helping managers address these global challenges.
International strategy is concerned with the way firms make fundamental choices about
developing and deploying scarce resources internationally. International strategy involves
decisions that deal with all of the various functions and activities of a company, not merely a
single area such as marketing or production. To be effective, a company’s international strategy
needs to be consistent among the various functions, products, and regional units of the
company as well as with the demands of the international competitive environment. The goal
of international strategy is to achieve and maintain a unique and valuable competitive position,
both in a nation as well as globally, a position that has been termed “competitive advantage.”
This suggests that the international company either must perform different activities than its
competitors, or else perform the same activities but in different ways. In attempting to develop
competitive advantage, a company’s managers are forced to make choices regarding what to
do, and what not to do, now and over time. Different companies make different choices, and
these choices have implications for each company’s ability to meet the needs of customers and
to create a defensible competitive position internationally. Without adequate planning,
managers are more likely to make decisions that do not make good sense competitively, and
the company’s international competitiveness may be harmed. Many global and multinational
companies have instituted formal worldwide strategic planning to identify opportunities and
threats, formulate strategies to handle them, and stipulate the means to finance them. Global
strategic planning provides a formal structure in which managers analyze the firm’s external
environments, analyze the firm’s internal environments, define the company’s business and
mission, set objectives, quantify goals, and formulate strategies and tactics to achieve them.
Operating managers do the planning and with the assistance of their planning staff.
LEARNING OBJECTIVES
LO 9-1 Explain international strategy, competencies, and international competitive
advantage.
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
4 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
LO 9-2 Describe the global strategic planning process and its components.
LO 9-3 Describe the features of a strategic plan.
LO 9-4 Discuss the time horizon, organizational level, and different methods of strategic
planning.
LO 9-5 Outline new directions in strategic planning.
KEY TERMS AND DEFINITIONS
Bottom-up planning (p. 249)
Planning process that begins at the lowest level in the
organization and continues upward.
Budget (p. 246)
An itemized projection of revenues and expenses for a future
time period.
Competitive advantage(p. 234)
The ability of a company to achieve and maintain a unique and
valuable competitive position both within and nation and
globally, generating higher rates of profit than its competitors.
Competitive strategies (p. 240)
Action plans to enable organizations to reach their objectives.
Contingency plans (p. 245)
Plans for the best- or worst-case scenarios or for critical events
that could have a severe impact on the firm.
Explicit knowledge (p. 237)
Knowledge that is easy to communicate to others via words,
pictures, formulas, or other means.
International strategy (p. 233)
A plan that guides the way firms make choices about developing
and deploying scarce resources to achieve their international
objectives.
Iterative planning (p. 249)
Repetition of the bottom-up or top-down planning process until
all differences have been reconciled.
Knowledge management (p.
237)
The practices that organizations and their managers use for
identifying, creating, acquiring, developing, dispersing, and
exploiting competitively valuable knowledge.
Mission statement (p. 238)
A broad statement that defines the organization’s purpose and
scope.
International Business
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Instructor Guide to Module 9
5 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
Policies (p. 246)
Broad guidelines issued by upper management to assist lower-
level managers in handling recurring issues or problems.
Procedures (p. 247)
Guides that specify ways of carrying out a particular task or
activity.
Sales forecast (p. 246)
A prediction of future sales performance.
Scenarios (p. 244)
Multiple, plausible stories about the future.
Strategic planning (p. 234)
The process by which an organization determines where it is
going in the future, how it will get there, and how it will assess
whether and to what extent it has achieved its goals.
Tacit knowledge (p. 237)
Knowledge that an individual has but that is difficult to express
clearly in words, pictures, or formulas and is therefore difficult
to transmit to others.
Top-down planning (p. 249)
Planning process that begins at the highest level in the
organization and continues downward.
Value chain (p. 236)
A set of interlinked activities that add value to the final product
or service.
Value chain analysis (p. 236)
An assessment conducted on the chain of interlinked activities
of an organization or set of interconnected organizations,
intended to determine where and to what extent value is added
to the final product or service.
Values statement (p. 238)
A clear, concise description of the fundamental values, beliefs,
and priorities expected of the organization’s members,
reflecting how they are to behave with each other and with the
company’s customers, suppliers, and other members of the
global community.
Vision statement (p. 238)
A description of the company’s desired future position if it can
acquire the necessary competencies and successfully
implement its strategy.
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
CONTENT OUTLINE
The following section provides the flow of information using the LEARNING OBJECTIVES as a
guide, KEY TERMS learners will need to take away from the course and a notation of when to
use POWERPOINT SLIDES with LECTURE NOTES to drive home teaching points.
LO 9-1
Explain international strategy, competencies, and
international competitive advantage
• Introduction
• What is international strategy, and why is it
necessary?
• Why plan globally?
Key Terms:
• International strategy
• Competitive advantage
• Strategic planning
Lecture Outline and Notes:
I. What is international strategy, and why is it necessary?
A. International strategy is concerned with the way firms make choices about developing and
deploying scarce resources internationally. Strategy must be consistent among the
company’s various functions, products, and regional units (internal consistency) and with
the demands of the international competitive environment (external consistency).
B. The goal of international strategy is to achieve competitive advantage. Competitive
advantage is the ability of a company to achieve and maintain a unique and valuable
competitive position both within a nation and globally, generating higher rates of profit
3. are difficult to imitate or substitute for,
4. allow the firm to be organized to fully exploit the competitive potential of these
competencies.
D. The challenge for international companies is that resources are always scarce, there are
many alternatives for using these scarce resources (for example, which nations to enter?),
and these alternatives are not equally attractive. Managers make choices regarding what
to do, and what not to do, now and over time. Different companies make different choices
with implications for each company’s ability to meet customer’s needs and create a
defensible competitive
II. Why plan globally?
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
7 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
the future, how it will get there, and how it will assess whether and to what extent it has
achieved its goals.
E. Formal global strategic planning provides managers a way to identify opportunities and
threats, formulate strategies to handle them, and stipulate how to finance their
implementation. Plans provide for consistency of action among the managers.
F. Strategic plans help ensure decision makers have a common under- standing of the
business, the strategy, the assumptions behind the strategy, the external business
environment pressures, and their own direction.
G. Strategic plans promote consistency of action among the firm’s managers worldwide and
encourage them to consider the ramifications of their actions in the firm’s other
geographic and functional areas.
H. Strategic planning is also intended to increase the likelihood of strategic innovations,
promoting the development, capture, and application of the new ideas needed to succeed
in a challenging competitive environment.
I. Strategic planning continues to be among the most commonly used management tool
among global executives, and it is the tool with one of the highest reported levels of
satisfaction.
LO 9-2
Describe the global strategic planning process and its
components
• The process of global strategic planning
o Step 1: analyze domestic, international, and
foreign environments
values statements
o Step 4: set corporate objectives
▪ Multidomestic strategy
▪ Global strategy
Key Terms:
• value chain
• value chain analysis
• knowledge
management
• mission statement
• vision statement
• values statement
• contingency plans
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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
8 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
▪ Using scenarios in strategy formulation
▪ Contingency planning as part of strategy formulation
o Step 7: prepare tactical plans
Lecture Outline and Notes:
I. The Process of Global Strategic Planning (Figure 9.1)
The process provides a formal structure for (1) analyzing a firm’s external environments, (2)
analyzing a firm’s internal environments, (3) defining a company’s business and mission (4)
setting corporate objectives, (5) quantifying goals, (6) formulating strategies and (7) making
tactical plans.
Step 1: Analyze domestic, international, and foreign environments
1. Managers must know what the present force values are and where they
appear to be going, and to develop and implement appropriate responses to
any changes in key environmental forces
5. Environmental, social, and business trends are more critical to strategy than in the
past 5 years. However, few companies react to them
Step 2: Analyze corporate controllable variables
1. Includes a situational analysis and a forecast. Various functional areas will
provide input to the planning staff, who will prepare a report for the strategy
planning committee. The committee wants to know where the company is
heading, what are its strengths and weaknesses, etc.
6. Management often conducts a value chain analysis, which considers three key
questions:
a. Who are the company’s target customers?
b. What value does the company want to deliver to these customers?
c. How will this customer value be created?
7. Value chain analysis focuses on the third question. The goal is to enable
management to determine the set of activities that will comprise the company’s
value chain, including which activities the company will do itself and which will be
outsourced.
8. Management must consider where to locate various value chain activities and to
examine linkages among the activities in the value chain. Linkages must be
examined across activities within the company and manage relationships with
external entities (suppliers, distributors, or customers) within and across nations.
9. The desired outcome is identification and establishment of a superior set of well-
integrated value chain activities and linkages. This system will permit the
company to effectively and efficiently develop, produce, market, and sell the
company’s products and services to the target customers and create the basis for
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
9 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
global competitive advantage.
10. A simplified value chain is given in Figure 9.2
Knowledge as a controllable corporate resource
1. In a highly competitive, rapidly changing, knowledge-intensive economy,
companies achieve competitive advantages through leveraging organizational
knowledge across national boundaries.
11. Companies face ongoing challenges of creating mechanisms that will
systematically and routinely identify opportunities for developing and transferring
knowledge throughout international operations, and for ensuring that subsidiaries
are willing and able to both share what they know and to absorb knowledge from
management.
12. Since much valuable knowledge is tacit (known well by the individual but difficult
to express verbally or document), systems are needed to convert tacit knowledge
Step 3: Define the corporate mission, vision, and values statements
1. These broad statements communicate to the firm’s stakeholders what the
d. Vision Statement describes the desired future position, what it hopes to
accomplish if it can acquire needed competencies and successfully
implement its strategy.
e. Values Statement is clear, concise description of the fundamental
values, beliefs, and priorities of the organization’s members.
quantifiable or directional goals
J. Step 6: Formulate the competitive strategies
1. Managers will formulate alternative competitive strategies and corresponding
action plans that seem plausible, taking into consideration the directions of
external forces and the firm’s strengths, weaknesses, opportunities, and
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 9
10 Instructor’s Manual – Module 9 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
threats
13. Companies competing internationally confront two opposing forces: (1) reduction
of costs and (2) adaptation to local markets.
a. To be competitive, firms must do what they can to lower costs per
unit so customers will not perceive their products or services as
being too expensive. This results in pressure for some of the
company’s facilities to be located in places where costs are low, as
well as developing products that are highly standardized.
f. Managers must respond to local pressures to modify products to meet
local market demands where they do business. This pressures the
a. As suggested in Figure 9-3, the strategy that would be most
appropriate for the company, overall and for various activities in the
value chain, depends on the amount of pressure the company faces
to adapt to local markets and achieve cost reductions.
g. Home Replication strategy centralizes product development strategy in
the home country, and after differentiated products are developed in
i. Multidomestic Strategy is used when there is strong pressure to adapt
products or services for local markets. Decision making is decentralized
to allow the company to modify its products and to respond to changes
in local competition and demand. By tailoring products for specific
markets, companies may charge higher prices. Local adaptation
regional markets can be high.
