3/20/2014

Global Strategic Management

Class 1
MGMT 688 Purdue University Professor Fabrice Lumineau

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 Lumineau

Krannert Building Office 530 lumineau@purdue.edu Meetings by appointment

Academic background
PhD in Strategic Management MA in Business MSc in Economics

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.)

Main industry experience

Research interests Project manager in investment banking (Societe Generale Investment Banking) Partnerships between organizations Role of the contract and trust in collaborative Project manager in insurance industry strategies (AXA Corporate Solutions) Manager of a wine sales outlet (Nicolas) 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 Robertson Sociologist and theorist of globalization University 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?

In red: silk road In blue: spice trade routes

Assyrian, Phoenician, and Roman empires

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 strategy

Treating 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

What determines
the international success of failure of firms?

Industry-based Competition Strategic Decisions Implementation/ Performance

Firm-specific Resources & capabilities

Institutional Conditions

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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 Wal-Mart in Europe Kent Chemical Levendary Caf Eli Lilly Scotts Miracle-Gro P&G Japan Development of a multinational personnel development system Celtel Nigeria Carlson Company Country Germany US China India China Japan Hong Kong Industry Retail Chemicals Restaurant Pharmacy Garden products Personal care products Industrial products

Nigeria Costa Rica

Telecommunications Travel and tourism

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Syllabus Overview Requirements & Grading

Discussion Participation Team Project Country Presentation 40% 40% 20%

Discussion Participation
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

Participation
Simply attending class is not enough to get more than aC 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

Syllabus Overview Professional conduct

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!

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

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