HD EDUCATION Page | 1 HD EDUCATION IBUS1101 FINAL 期末冲刺课 Week 6-7 TUTOR: HEY HD EDUCATION Page | 2 HD EDUCATION Page | 3 HD EDUCATION Page | 4 TUTOR 自我介绍：HEY 我已经在课上做了自我介绍。 1. 现在所处的大学阶段是？ 2. 所学专业是？ 3. 所教授科目取得怎样的成绩？优势是什么？ 4. 您的教学风格是这么样的？ 5. 平时有什么兴趣爱好？ 6. 有哪些亮眼的实习经历？ HD EDUCATION Page | 5 1.点【 参会者】 2.点【 举⼿ 】 即可与⽼师实时互动 3.问题被解答了还可以【 ⼿放下】 红圈处输⼊问题提问 红圈处输⼊问题提问 HD EDUCATION Page | 6 课程目录 Part 1- Global Business Environment (Understand the business landscape) • Class 1-3: Distance (Countries are different) • Class 4-5: Trade Barriers and Risks (Dealing with governments) Part 2- How firms conduct business (Operating in Global Business Environment) • Class 6: The need for Global Strategy • Class 7: Global Strategy Formulation • Class 8: Why firms go abroad? • Class 9: How firms go abroad? • Class 10 & 11: How firms organize foreign business/implement global strategy? HD EDUCATION Page | 7 Week 6 The need for global Strategy Why strategy is not enough? Why we need global strategy after all? 6.1 Sustainable Competitive Advantage (SCA) The Main Objective of Businesses? • Profitability • Sustainable Profitability 可持续盈利能力 A firm possesses a sustainable competitive advantage when it consistently earns higher profits than other firms in its industry 6.2 Strategy • How to earn sustainable competitive Advantage? Operational effectiveness • Performing similar activities better than rivals • The Art of Being Different Ford Versus General Motors 例子 课上其他例子 6.3 Case: Walmart • Walmart Advantage 例子：RDIF 技术、artificial intelligence 人工智能、IoT、big data 参考链接： https://corporate.walmart.com/IRL/ https://corporate.walmart.com/newsroom/2019/04/25/walmarts-new-intelligent-retail-lab-shows-a-glimpse-into- the-future-of-retail-irl https://bernardmarr.com/default.asp?contentID=1181 • Seamless shopping experience through machine learning • Looking into developing robotics, virtual and augmented reality, machine learning and artificial intelligence HD EDUCATION Page | 8 • RFID tags to pre-empt stock How Walmart did it? High variety, low price Key Success Factors of Walmart Strategy • Large Stores Providing Bulk Buying Power 提供批量购买能力的大型商店 • Also Reliance on Cheap labor force to reduce prices • Technology to enable efficiency • RFID, IBM strategic partner, avoid wastage, maintain big inventory, big data, supply chain-order what they can sell • Learn faster than competitors Adopt new and better technologies first Can Walmart replicate the same success outside USA? Can Walmart Pursue same strategy outside USA? Walmart in Germany: The Prime Example 1. Regulations about Large Stores 关于大型商店的规定 2. Shopping Habits of Germans eg buy groceries daily 3. Dealings with Suppliers 与供应商打交道 Walmart in Asia 1. Infrastructure problems 基础设施问题 eg. Issues in technology and internet Cultural issues about Food Preference Wal-Mart International’s operating margin by country HD EDUCATION Page | 9 Week 6 Reading Reading 1 Compulsory reading 1- Walmart in China By MARK LANDLER and MICHAEL BARBARO （2006） 2 Compulsory reading 2- Walmart stumbled in China Robert Salomon （2016） 3 Compulsory reading 3- Walmart in Japan Fortune （2007） Reading 1 标题：Wal-Mart Finds That Its Formula Doesn’t Fit Every Culture • Food is cheaper at German discount chains. • Store on the edge of town and most consumers does not own a car • Consumers do not buy in bulk, only buy a few things at once • The retail giant has struggled in countries like South Korea and Japan as it discovered that its formula for success — low prices, zealous inventory control and a large array of merchandise — did not translate to markets with their own discount chains and shoppers with different habits. • Issue of hubris, a uniquely powerful American enterprise trying to impose its values around the world • it never established comfortable relations with its German labor unions. 拒绝和德国工会合作 • employees dislike moving • poor location • This lack of scale causes another problem that has afflicted Wal-Mart in several countries: its inability to compete with established discounters, like the Aldi chain in Germany and E-Mart in Korea. • Aldi, with 4,100 stores in Germany, undercuts Wal-Mart on price, while still offering high-quality food. • Wal-Mart’s German experience also taught it to use local management. The company initially installed American executives, who had little feel for what German consumers wanted. E.g. packaged meat vs butcher 屠夫 Reading 2 Here’s Why Walmart Stumbled on The Road to China Robert Salomon Feb 21, 2016, Fortune • Benefits of globalisation • However, opportunity and reality do not always coincide. 然而，机遇与现实并非总是重合。 • Although globalization certainly holds promise, it is also rife with hazards. • It presents risks that managers fail to appreciate and that they often overlook. • Sadly, in the high-stakes world of global strategy, companies regularly fail to convert potential into profits. Most companies are poorly positioned to capitalize on globalization’s potential, and many are spectacularly unsuccessful in their attempts to globalize. • But on further inspection, it becomes clear that China poses tremendous challenges for Western companies. HD EDUCATION Page | 10 • The first obstacle is economic. Though China has made tremendous strides and enjoyed incredible growth since opening its markets to global trade and investment in 1979, the development of its economic institutions and its infrastructure has lagged behind that in the West. • The second obstacle is cultural. Chinese consumers, for example, tend to be very different from those in the West, which makes it difficult for Western companies to appeal to local consumer tastes. • The third obstacle is political. Western companies struggle to skillfully navigate China’s complex web of local and national political organizations. • All of these factors led G.E.’s CEO Jeff Immelt to conclude: “China is big, but it is hard.” • Walmart has learned these lessons the hard way. Walmart’s ongoing troubles in China, since opening its first superstore in Shenzhen in 1996, reflect a fundamental misunderstanding of China’s political, economic, and cultural environments. The American retailer has struggled to understand Chinese consumers and Chinese culture. Chinese consumers, unlike those in the U.S., differ widely from city to city in their needs. Walmart therefore struggles to find the right product mix to offer in the 117 cities and 25 provinces in which it operates. This makes it challenging to sell a core set of products nationwide. 主要问题有三个：ECONOMIC, CULTURAL, POLITICAL • Walmart has also suffered from troubled relationships with politicians—both local and national. The company has had its fair share of run-ins with the law. On one occasion the Chinese government fined Walmart for violating local and national laws and even forced it to close stores temporarily for purported product violations. Walmart paid the fines, even though the company believed the claims to be unfounded. • Yet the company’s greatest challenge remains an economic infrastructure that is problematic and underdeveloped. China simply cannot accommodate one of Walmart’s greatest strengths: an ultra- efficient and technologically advanced supply chain. The company did not anticipate that scaling up its business model there would present so many problems. Walmart’s struggles highlight the difficulties inherent in transferring a competitive advantage rooted in supply-chain efficiency—that is, logistics—to a country lacking a sophisticated technological and physical infrastructure. • Although China has led the globe in infrastructure investment over the past several years, outside of its largest cities (e.g., Shanghai, Beijing, Tianjin, Guangzhou, and Shenzhen), its infrastructure remains more than problematic. • The lesson in all of this is that, when it comes to globalization, managers are not just optimists; all too often, they are unbridled optimists. They habitually overestimate the benefits of globalization and underestimate its costs. In evaluating globalization opportunities, managers often forget the other side of the opportunity equation: risk. Risk goes hand in hand with opportunity, and managers fail to accurately account for the risks they face in global markets. 所有这一切的教训是，在全球化方面，管理者不仅是乐 观主义者，而且还只是一个乐观主义者。 很多时候，他们是不受约束的乐观主义者。 他们习惯性地高 估了全球化的好处，却低估了其代价。 在评估全球化机会时，管理者经常忘记机会等式的另一面：风 险。 风险与机遇并驾齐驱，管理人员无法准确说明他们在全球市场中面临的风险。 • Managers often make dangerous assumptions about what it takes to succeed in global markets. They tend to assume that their current business model, one they successfully and profitably exploit in their home country, will translate simply and effectively to other countries, yielding similar levels of profitability. These same managers fail to account for real and salient differences between nations, and fail to consider how those differences generate operational risks that may negatively impact their business. Unfortunately, they end up learning the hard way that the risk borne out of cross-country differences can overwhelm even the best-laid globalization plans. And Walmart is no exception. 经理们常常对在全球市场上取得成功需要做出 危险的假设。 他们倾向于认为，他们当前的商业模式，即他们在本国成功并成功获利的一种商业模式， HD EDUCATION Page | 11 将简单有效地转化为其他国家，从而产生相似的盈利水平。 这些相同的经理没有考虑国家之间的实际和 显着差异，也没有考虑这些差异如何产生可能对他们的业务产生负面影响的运营风险。 不幸的是，他们 最终学会了一种艰难的方法，即跨国差异所带来的风险甚至会压倒最好的全球化计划。 沃尔玛也不例 外。 • 解决方式：To improve the practice of global business and to make better global expansion decisions, managers need a more sophisticated understanding of the economic, political, and cultural environments in the countries in which they intend to operate. They must appreciate how nations differ economically, politically, and culturally, and how those differences manifest as increasing risks (and costs). They then need to incorporate those risks into their existing strategy and financial decision models. 为了改善全球业 务的实践并做出更好的全球扩张决策，管理人员需要对他们打算经营的国家/地区的经济，政治和文化环 境有更深刻的了解。 他们必须理解国家在经济，政治和文化上的差异，以及这些差异如何体现为风险 （和成本）的增加。 然后，他们需要将这些风险纳入他们现有的策略和财务决策模型中。 Reading 3 Why Wal-Mart can't find happiness in Japan • Liability of foreignness • Even before it took full control, Wal-Mart persuaded Seiyu's management in 2004 to dismiss 25 percent of headquarters staff, including 1,500 employees and managers. That kind of mass firing happens rarely in Japan, which places a premium on social harmony. And when the firing is done at the behest of foreigners, it takes on added negative connotations. • Partly as a result, the fired employees and current ones as well have created a climate of resistance. They are frequently quoted in Japanese media complaining about Wal-Mart's efforts to instill an American operating model in Japan. The company says it is being flexible, but the carping persists: Wal-Mart is moving too aggressively to cut out distribution middlemen; it is making life difficult for managers by mandating that stores remain open for 24 hours; it is introducing products from China and elsewhere that don't meet Japanese tastes or standards of quality. • "National-brand food product prices have definitely come down, but high-quality merchandise has disappeared from the shelves, and customers have left." • One basic question is whether Wal-Mart has the right management in place. Most U.S. companies that have succeeded in Japan, such as McDonald's, have installed senior Japanese executives to head up operations and allowed them a measure of autonomy. In contrast, Wal-Mart is relying on a team of outsiders, including Brits and Canadians. 管理层的问题 • Suzuki says the company's systems have not meshed well with Seiyu's, resulting in many products not being ordered in time and suppliers not being paid on time. • Japan, where consumers have strong preferences for Japanese-made products HD EDUCATION Page | 12 相关题热身 What is sustainable competitive advantage? a) When a firm possesses competitive advantage b) When a firm possesses sustainable competitive advantage when it consistently earns higher profits than other firms in its industry c) Profitability Which of the following is not strategy? a. Earning a sustainable competitive advantage b. Performing similar activities better than rivals c. Having differentiation compared to other rival firms d. None of the above Which of the following does not contribute to Walmart’s success in the US? a. High variety, low price b. Technology to enable efficiency c. Large stores providing bulk buying power d. Infrastructure problems HD EDUCATION Page | 13 Week 7 Global Strategy Formulation The Need for Global Strategy Transferring Competitive Advantage Outside Home 考点 1. AAA Triangle • Aggregation: Overcoming differences The Global Company • Adaptation: Adjust to differences • Arbitrage: Exploiting differences 1.1 Aggregation • Can be Industry specific but other factors matter more 可以是特定行业，但其他因素更重要 例子：standardised products and process eg. Cars, cement, agriculture • Difficult to attain • Require very strong firm specific advantages 要求很强的企业具体优势 • Substantial cost savings if successful 如果成功，可节省大量成本 -learning curve 学习曲线, economies of scale Eg. Ford Motors Eg. Apple- standardisation (iPhone in China) HD EDUCATION Page | 14 1.2 Adaptation • Most Common Strategy 最常见的策略 • Some level of adaptation is almost always needed • Higher Cost • Usually paired with firm specific advantages 一些例子 • KFC in Japan introducing fish in its menu • Tide entering the Vietnamese market introducing a new washing powder which adapts to all parts of Vietnam (utilise both aggregation and adaptation) AA in digital world • Google has a competitive advantage for algorithm to find pages, carefully monitor how people use search, adapt search results to different countries; data-driven firms • Netflix: analyse subscriber profile The moving target • Aggregation and Adaptation across different value chain items • Shifts from Aggregation to Adaptation and adaptation to Aggregation Strategic -Already planned but wait for the right time -Shift of KFC on local suppliers • Learning based -Google or facebook moving to adaptation -KFC moving to aggregation in fried chicken HD EDUCATION Page | 15 1.3 Arbitrage Some misconceptions about arbitrage • Arbitrage is due to cost differentials only 套利仅是由于成本差异 • Cheap factors are accessible to all (if low cost only, NOT competitive advantage) 所有人都能获得便宜的因素 （如果仅低成本，则不是竞争优势） No sustainable competitive advantage • Political/Ethical Issues Bangladesh case Arbitrage is more than acquiring cheaper factors of production 套利不仅仅是获得廉价的生产要素 Cultural Arbitrage • Exploits differences in culture • Yoga in China. Some elements associated with a certain culture, “Chinese tea” French wine. • Indian Yoga Administrative Arbitrage • Tax Heavens eg. US high tax, Mauritius low tax • Free Trade zones/Export Processing Zones 自由 贸易区/出口加工区 • Friendly governments • 例子： differences in laws: pharmaceutical companies-drug testing 法律上的差异：制药 公司-药物检测 Economic arbitrage • Not limited to unskilled labour • Cheap labour • Good skills at low cost • Eg. Outsourcing: call centres, software firms in India • Take advantage of administrative arbitrage: time zone Geographic arbitrage • Sourcing from other places. • India has a huge supply of flowers, but not demands; the Netherlands 荷兰 demands, but not much supplies. Flying the flowers to the market. HD EDUCATION Page | 16 Week 7 Reading Reading 1 Compulsory reading 1- Forgotten Strategy Pankaj Ghemawat 2 Compulsory reading 2- Aggregation Pankaj Ghemawat 3 Compulsory reading 3- Adaptation Pankaj Ghemawat 4 Compulsory reading 4- Arbitrage Pankaj Ghemawat Reading 1: Forgotten Strategy Pankaj Ghemawat The strategy of difference • Correctly choosing how much to adapt a business model is certainly important for extracting value from international operations. • But to focus exclusively on the tension between global scale economies and local considerations is a mistake, for it blinds companies to the very real opportunities they could gain from exploiting differences. 但是，只关注全球规模经济和本地考虑之间的紧张关系是错误的，因为它使企业看不到它们可以通过利 用差异获得的非常真实的机会 • Indeed, in their rush to exploit the similarities across borders, multinationals have discounted the original global strategy: arbitrage, the strategy of difference. 事实上，跨国公司在急于利用跨国企业的相似之处 时，已经对原有的全球战略打了折扣:套利，即差异战略。 • Of course, we're all familiar with arbitrage in its traditional, and least-sustainable, form-the pure exploitation of price differentials. • But the world is not so homogeneous as to have removed arbitrage from a company's strategic tool kit. • In fact, many forms of arbitrage offer relatively sustainable sources of competitive advantage, and as • some opportunities for arbitrage disappear, others spring up to take their place. • To the contrary: If they are to get their global strategies right in the long term, many companies will have to find ways to combine the two approaches, despite the very real tensions between them 相反:许多公司 要想在长期内实现正确的全球战略，就必须找到将这两种方法结合起来的方法，尽管它们之间存在着非 常现实的紧张关系。. • Cultural, Administrative, Geographic and Economic Arbitrage HD EDUCATION Page | 17 Reading 2: Adaptation • Adaptation is the most obvious strategic response to differences, and variation the most obvious lever for achieving it: as the adage has it, when in Rome, do as the Romans do. • This note adds three additional points, which are captured in exhibit 3-1. • First, variation should be thought about more broadly than simply tailoring products or services to local market requirements. 首先，应该从更广泛的角度考虑变化，而不是简单地根据当地市场需求定制产品或 服务。 • Second, since variation is costly, smart adaptation typically involves not only appropriate decisions about the amount of variation but use of one or more complementary levers—focus, externalization, design, and innovation—that help improve its effectiveness. 其次，由于变化是昂贵的，聪明的适应通常不仅包括对 变化的数量作出适当的决定，还包括使用一个或多个互补的杠杆——聚焦、外化、设计和创新——以帮 助提高其有效性。 • Finally, the sheer variety of the levers and sublevers for adaptation suggests room to broaden strategic discussions beyond the usual tug-of-war between headquarters and the field over centralization versus decentralization. 最后，各种各样的调整手段和分支表明，战略讨论的空间可以扩大，而不局限于总部和 实地在集权与分权之间的拉锯战。 Reading 3: Aggregation • Aggregation involves using various grouping devices to create greater economies of scale or scope than country-by-country adaptation allows. 聚合涉及使用各种分组装置来创造比按国家调整所允许的更大的 规模或范围经济。 • The key idea is to find ways to group things so that within-group differences are minimal compared to differences between groups, facilitating the pursuit of cross-border scale or scope economies within groups. 关键思想是找到将事物分组的方法，使群体内的差异相对于群体之间的差异最小化，促进群体内 对跨境规模或范围经济的追求。 HD EDUCATION Page | 18 Reading 4: Arbitrage • Arbitrage is a way of exploiting differences by seeking absolute economies rather than the scale economies gained through standardization. 套利是寻求绝对经济，而不是通过标准化获得规模经济，从 而利用差异的一种方式。 • It treats differences across borders as opportunities, not as constraints. 它把跨越国界的差异视为机遇，而 不是限制。 CAGE Cultural Arbitrage • Favorable effects related to country or place of origin have long supplied a basis for cultural arbitrage. • For example, French culture or, more specifically, its image overseas has long underpinned the international success of French haute couture, perfumes, wines, and foods. • But cultural arbitrage can also be applied to newer, more plebian products and services. 但文化套利也可 以应用于更新、更大众化的产品和服务 例子：U.S. fast food chains present a relevant counterpoint. • Nor are such ―country-of-origin advantages reserved for rich nations. • Poor countries, too, can be important platforms for cultural arbitrage. Examples include Hatian compas music, Jamaican reggae, and dance music from the Congo, all of which enjoy image advantages in their respective regions. HD EDUCATION Page | 19 Administrative Arbitrage • Legal, institutional, and political differences from country to country open up another set of strategic arbitrage opportunities. 各国在法律、制度和政治上的差异打开了另一套战略套利机会。 • Tax differentials are, perhaps, the most obvious example – note the importance of enclaves, tax havens, free-trade areas, and export processing zones in firms’ decisions about plant locations and financial structure. • Companies also exploit regulatory differences to locate production where environmental and labor laws are advantageous. 企业还会利用监管差异，将生产设在环境和劳动法有利的地方。 • However, administrative arbitrage is another area that requires a strong legal and ethical warning. • While much of what goes on under the rubric of administrative arbitrage is legal or at least semi-legal, some of it clearly has an odor to it – requiring serious ethical as well as legal review. Geographic Arbitrage • Considering all that has been said and written about the ―death of distance， it is perhaps predictable that few strategy gurus take geographic arbitrage very seriously. • Yes, it’s true that transportation and communication costs have dropped sharply in the last few decades. • But that drop does not necessarily translate into a decrease in the scope for geographic arbitrage. • Air transportation, for example, has created a global flower market where blooms from favorable growing regions can be auctioned year-round in Aalsmeer, Netherlands and flown to customers worldwide while still fresh. Economic Arbitrage • In a sense, all arbitrage strategies are ―economic. • But the term is used here to refer to the exploitation of economic differences that don’t derive directly from cultural, administrative, or geographic differences. • These factors include differences in costs of labor and capital, as well as variations in more industry- specific inputs (such as knowledge) or in the availability of complementary products. 这些因素包括劳动力 和资本成本的差异，以及更多行业特定投入(如知识)或互补产品的可用性的差异。 • The best-known type of economic arbitrage is the exploitation of labor cost differentials, which is common in labor-intensive and capital-light manufacturing (e.g. garments). 最著名的经济套利类型是利用劳动力 成本差异，这在劳动密集型和资本轻的制造业(如服装)中很常见。 • However, some high-tech companies have also been able to take advantage of labor cost arbitrage to access highly skilled workers at lower cost. • Capital cost differentials might seem, at first blush, to offer slimmer pickings than labor cost differentials – after all, the former are measured in single percentage points rather than in multiples of up to ten or twenty like the latter. 乍一看，资本成本差异可能比劳动力成本差异带来的收益更小——毕竟，前者是以 单个百分点来衡量，而不是像后者那样以多达 10 或 20 个百分点的倍数来衡量。 • But with many companies earning returns within two or three percentage points of their cost of capital, percentage points are consequential. 但由于许多公司的回报率只占其资本成本的 2 - 3 个百分点，所以 几个百分点是很重要的。 • Analysing arbitrage （ADDING value scorecard） Given the variety of arbitrage strategies, there is no one way to analyze them. But again, the ADDING Value scorecard can be used to structure the analysis and helps suggest specific dos and don’ts. The key point to HD EDUCATION Page | 20 remember is that arbitrage can affect all the components of the ADDING Value scorecard, not just the first D of decreasing costs. • Managing arbitrage • Arbitrage involves exploiting differences across countries instead of treating them as constraints to be adjusted or overcome and is a source of value creation that very few companies can afford to ignore. Think broadly about arbitrage opportunities along all of the dimensions of the CAGE framework – not only about reducing labor cost. But analyze the implications of arbitrage carefully – again the ADDING Value scorecard is a useful tool. And consider the sustainability of arbitrage opportunities—and whether it can be enhanced by building up firm-specific capabilities. HD EDUCATION Page | 21 重难点总结 请认真听课 嘿嘿 HD EDUCATION Page | 22 第⼀步 关注【 海道教育】 服务号 第⼆步 点击 【 购买通知】 或【 上课提醒】 课程结束后， 如果您对课程或者服务的任何建议和意⻅ 请给予我们提⾼和改进的机会， 感谢您对 HD · EDUCATION 课程和服务的信任！ 第三步 【 填写问卷】
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