Analytical Frameworks
© Professor Daniel F. Spulber
First key framework
The global competitive
strategy “Star Analysis”
• The “Star Analysis” provides a way to
organize our thoughts and knowledge
about geography and international
business
• The “Star Analysis” provides information
for the international business manager to
develop a competitive strategy
2
Global Competitive Strategy
The international business firm’s competitive
advantage depends on five major drivers:
•
Home country
•
Supplier countries
•
Customer countries
•
Partner countries
•
Competitor countries
3
The global competitive
strategy star
Home
country
Supplier
countries
Customer
countries
International
business
Partner
countries
Competitor
countries
4
The international business
“Star Analysis”
Gather country
data from
global mosaic
Star
Analysis
Information needed
to design
competitive
strategy
5
Global Competitive Strategy
Home country features – headquarters
• Company globalization – Launching pad
• Company history and culture
• Managers’ background
• Brand nationality
• Corporate governance
• Home market
• Political, legal, regulatory climate
6
Global Competitive Strategy
Supplier country features –
production and procurement
•
•
•
•
•
•
•
Worker wages and productivity
Technology
Finance capital
Factor supplies
Supplier firms
Political, legal, regulatory climate
Operating costs/risks
7
Global Competitive Strategy
Customer country features – distribution
and sales
• Customer preferences
• Elasticity of demand
• Income per capita and income distribution
• Customer knowledge
• Distribution infrastructure
• Society and culture
• Political, legal and regulatory climate
8
Global Competitive Strategy
Partner countries – Demand-side and
supply-side complements
• Complementary products
• Complementary technology
• Complementary capabilities
• Market knowledge
• Political, legal, regulatory climate
9
Global Competitive Strategy
Competitor countries
• Home, supplier, customer, and partner
countries of competitors
• Global and local competitors
• Customer and supplier bypass competition
• Political, legal and regulatory climate –
trade agreements, home-country policies
10
Global Competitive Strategy
• Location, location, location – key role of
geography
• Where to produce and find suppliers?
• Where to target customer markets?
• Where to find best partners
• Where are competitors coming from,
serving and seeking suppliers
Global competitive strategy – integrate
economic and geographic forces for
competitive advantage
11