Case Study Description of Internationalization, Globalization, and Capability-Based Strategy
Current trends appear to suggest that globally integrated strategies are the wave of the future for many industries, but no theoretically sound, firm-level model explains this situation. International business models explain industry trends from economic perspectives, and organizational theory is beginning to examine the organizing principles of multinational firms. However, a gap exists in explaining the strategic motivations of multinational firms as they expand and integrate worldwide. This article develops a capability-driven, as opposed to market-driven, framework of multinational strategy. This contingent framework explains the organizational consequences of international expansion and global integration depending on the capability types, capability strategies, and multinational strategies of the multinational firm.
Authors :: Stephen Tallman, Karin Fladmoe Lindquist, Karin Fladmoe-Lindquist
Swot Analysis of "Internationalization, Globalization, and Capability-Based Strategy" written by Stephen Tallman, Karin Fladmoe Lindquist, Karin Fladmoe-Lindquist includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Multinational Capability facing as an external strategic factors. Some of the topics covered in Internationalization, Globalization, and Capability-Based Strategy case study are - Strategic Management Strategies, Globalization and Global Business.
Some of the macro environment factors that can be used to understand the Internationalization, Globalization, and Capability-Based Strategy casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, wage bills are increasing, geopolitical disruptions, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%,
customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, etc
Introduction to SWOT Analysis of Internationalization, Globalization, and Capability-Based Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Internationalization, Globalization, and Capability-Based Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Multinational Capability, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Multinational Capability operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Internationalization, Globalization, and Capability-Based Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Internationalization, Globalization, and Capability-Based Strategy case study
2. Improving business portfolio management of Multinational Capability
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Multinational Capability
Strengths Internationalization, Globalization, and Capability-Based Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Multinational Capability in Internationalization, Globalization, and Capability-Based Strategy Harvard Business Review case study are -
Strong track record of project management
– Multinational Capability is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Multinational Capability in the sector have low bargaining power. Internationalization, Globalization, and Capability-Based Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Multinational Capability to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Multinational Capability is present in almost all the verticals within the industry. This has provided firm in Internationalization, Globalization, and Capability-Based Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Multinational Capability is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Stephen Tallman, Karin Fladmoe Lindquist, Karin Fladmoe-Lindquist can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Global Business field
– Multinational Capability is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Multinational Capability in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Multinational Capability digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Multinational Capability has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Multinational Capability has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Multinational Capability has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Internationalization, Globalization, and Capability-Based Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Multinational Capability is one of the most innovative firm in sector. Manager in Internationalization, Globalization, and Capability-Based Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Multinational Capability has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Multinational Capability to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Multinational Capability has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Internationalization, Globalization, and Capability-Based Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Multinational Capability is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Multinational Capability is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Internationalization, Globalization, and Capability-Based Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Internationalization, Globalization, and Capability-Based Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Internationalization, Globalization, and Capability-Based Strategy are -
Lack of clear differentiation of Multinational Capability products
– To increase the profitability and margins on the products, Multinational Capability needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Multinational Capability is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Internationalization, Globalization, and Capability-Based Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Multinational Capability supply chain. Even after few cautionary changes mentioned in the HBR case study - Internationalization, Globalization, and Capability-Based Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Multinational Capability vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Multinational Capability has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– It come across in the case study Internationalization, Globalization, and Capability-Based Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Internationalization, Globalization, and Capability-Based Strategy can leverage the sales team experience to cultivate customer relationships as Multinational Capability is planning to shift buying processes online.
Need for greater diversity
– Multinational Capability has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Multinational Capability has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Internationalization, Globalization, and Capability-Based Strategy should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Multinational Capability needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Internationalization, Globalization, and Capability-Based Strategy, is just above the industry average. Multinational Capability needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Multinational Capability is dominated by functional specialists. It is not different from other players in the Global Business segment. Multinational Capability needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Multinational Capability to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Internationalization, Globalization, and Capability-Based Strategy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Multinational Capability has relatively successful track record of launching new products.
Opportunities Internationalization, Globalization, and Capability-Based Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Internationalization, Globalization, and Capability-Based Strategy are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Multinational Capability can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Internationalization, Globalization, and Capability-Based Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Multinational Capability can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Multinational Capability is facing challenges because of the dominance of functional experts in the organization. Internationalization, Globalization, and Capability-Based Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Multinational Capability can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Multinational Capability can use these opportunities to build new business models that can help the communities that Multinational Capability operates in. Secondly it can use opportunities from government spending in Global Business sector.
Building a culture of innovation
– managers at Multinational Capability can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Learning at scale
– Online learning technologies has now opened space for Multinational Capability to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Multinational Capability can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Multinational Capability has opened avenues for new revenue streams for the organization in the industry. This can help Multinational Capability to build a more holistic ecosystem as suggested in the Internationalization, Globalization, and Capability-Based Strategy case study. Multinational Capability can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Multinational Capability can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Multinational Capability has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Multinational Capability has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Internationalization, Globalization, and Capability-Based Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Multinational Capability to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Multinational Capability can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Multinational Capability can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Internationalization, Globalization, and Capability-Based Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Internationalization, Globalization, and Capability-Based Strategy are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Multinational Capability will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Multinational Capability needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Multinational Capability has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Multinational Capability needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Multinational Capability high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Multinational Capability with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Multinational Capability demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Multinational Capability can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Multinational Capability.
Shortening product life cycle
– it is one of the major threat that Multinational Capability is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Multinational Capability
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Multinational Capability.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Multinational Capability business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Multinational Capability needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Multinational Capability can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of Internationalization, Globalization, and Capability-Based Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Internationalization, Globalization, and Capability-Based Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Internationalization, Globalization, and Capability-Based Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Internationalization, Globalization, and Capability-Based Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Internationalization, Globalization, and Capability-Based Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Multinational Capability needs to make to build a sustainable competitive advantage.