Fundamentals of Global Strategy by Cornelis A. de Kluyver
A Business Model Approach

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Abstract
This book looks at the opportunities and risks associated with staking out a global competitive presence and introduces the fundamentals of global strategic thinking. We define crafting a global strategy in terms of change: how a company should change and adapt its core (domestic) business model to achieve a competitive advantage as it expands globally. The conceptual framework behind this definition has three fundamental building blocks: a company’s core business model, the various strategic decisions a company needs to make as it globalizes its operations, and a range of globalization strategies for creating a global competitive advantage. A business model is defined in terms of four principal
components: (a) market participation—who its customers are, how it reaches them and relates to them; (b) the value proposition—what a company offers its customers; (c) the supply chain infrastructure—with what resources, activities and partners it creates its offerings; and finally, (d) its management model—how it organizes and coordinates its operations. Globalization requires a company to make strategic decisions about each component of the business model. Market participation decisions include choosing which specific markets or segments to serve, domestically or abroad; what methods of distribution to use to reach target customers; and how to promote and advertise the value proposition. Globalization decisions about the value proposition touch the full range of tangible and intangible benefits a company provides to its customers (stakeholders). Decisions about a company’s value chain infrastructure deal with such questions as, What key internal resources and capabilities has the company created to support the chosen value proposition and target markets? What partner network has it assembled to support the business model? How are these activities organized into an overall, coherent value creation and delivery model? Finally, strategic decisions about the global management dimension are concerned with a company’s choices about a suitable global organizational structure and decision-making process. We use Pankaj Ghemawat’s well-known “AAA Triangle” framework to define three generic approaches to global value creation. Adaptation strategies seek to increase revenues and market share by tailoring one or more components of a company’s business model to suit local requirements or preferences. Aggregation strategies focus on achieving economies of scale or scope by creating regional or global efficiencies; they typically involve standardizing a significant portion of the value proposition and grouping together development and production processes.
Arbitrage is about exploiting economic or other differences between national or regional markets, usually by locating separate parts of the supply chain in different places.
 

About Cornelis A. de Kluyver

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Cornelis A. “Kees” de Kluyver is Dean and the James and Shirley Rippey Distinguished Professor of Management at the Lundquist College of Business at the University of Oregon. Prior to coming to Eugene, Oregon, he was the Masatoshi Ito Professor of Management at the Peter F. Drucker and Masatoshi Ito Graduate School of Management at Claremont Graduate University. From 2000–2006 he served there as the Henry Y. Hwang Dean of the School and as Executive Director of the Peter F. Drucker Research Library and Archives. Prior to coming to Claremont Graduate University, he was Dean and Professor of Management at the School of Management at George Mason University, in Fairfax, Virginia. Dr. de Kluyver has served on several corporate and nonprofit boards. He was a member of the first Blue Ribbon Commission on Executive Compensation convened by the National Association of Securities Dealers, which focused on developing standards for stock option grants. He holds a Ph.D. in Operations Research from Case Western Reserve, an MBA for the University of Oregon and undergraduate degrees from the University of Oregon and the Netherlands School of Business.
 
Published August 9, 2010 by Business Expert Press. 295 pages
Genres: Business & Economics.

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