Why Do You Think This Strategy Became Less Viable in the 1990's?

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Chapter 12 – The Strategy of International Business

Key Points of the chapter

Strategy – is the actions managers take to attain the goals of the business (usually to maximize value for the shareholders/stakeholders).

Value Chain – The operations of the firm compose the value chain which are the series of value creating activities that occur to create value. These actions include sales, production, IT, accounting etc. These activities are divided into support and primary activities.

Primary Activities – Design, creation and delivery of the product. They are: 1. R&D 2. Production 3. Marketing 4. Sales Support Activities – Inputs that allow the primary activities to occur 1. Information Systems
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Method • Centralize product development functions • Tend to establish manufacturing and marketing functions in each major country or geographic region in which they do business. • Increases costs but there are no cost pressures so that isn’t an issue • May decide to do some minor customization of the marketing strategy

When to use it • Low cost pressures • Low need for local responsiveness • Selling products that serve universal needs • Do not have many competitors

Chapter Questions

Q2: What are the risks that Wal-Mart Faces when entering other retail markets? How can the risks be mitigated?

Economic Risks/Exposure
Likelihood that economic mismanagement will cause drastic changes in a country’s business environment that hurt the profit and other goals of a particular business enterprise. • Increase in inflation can hurt profits • Recession • Loss of confidence in the market and loans

Legal Risks
If Wal-Mart decides to enter a
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