Exam 8: Global Strategy

Case Scenario 1: Blast Furnace, Inc., (BFI) Blast Furnace, Inc., (BFI) provides customized development of automated rich-media applications, and scalable solutions that allow media and entertainment companies, as well as enterprises and government organizations, to deploy, manage and distribute video content on IP-based networks. The company was founded in 1997 and went public in 2004; its stock trades on the NASDAQ under the ticker BLST. While providing solutions to a variety of firms and industries in North America, BFI has experienced its fastest growth with the security products that it designs and sells to the U.S. government and U.S. government agencies. This growth is based on its propriety VUE software, which is a complete identification solution for capturing, analyzing, and managing multi-biometric information. Proprietary analysis algorithms aggregate and cross-compare multiple biometrics to increase accuracy and lessen dependence on single identification techniques. Additionally, specialized encoding techniques reduce file size and increase analysis and response times. VUE supports a wide range of applications ranging from ID issuance and verification to gated entry screening for border patrol, airports, government buildings, and corporations. Essentially, VUE is able to sift through massive amounts of digitized multimedia files to create a unified ID dossier of an individual and then identify those individuals rapidly anywhere in the data. Such a capability is of great interest to security organizations, particularly since the World Trade Center bombing, because it allows the user to identify suspects within minutes on a real-time basis anywhere digitized media is being created (like that created by the hidden and visible surveillance cameras in airline terminals, banks, ATMs, and other public locations). Once a suspect is entered into the system, the software is capable of scanning all data sources automatically and without stop. For two years, BFI has had this market to itself but now two new entrants, a Belgian start-up and the subsidiary of a Finnish telecom firm, are staking out positions in large non-U.S. markets like Europe and Asia. BFI's management fears that if it limits its efforts to North America, then these aggressive competitors may eventually develop strongholds in other markets from which they can launch successful attacks on BFI's home turf. -(Refer to Case Scenario 1) How would you evaluate which country or countries BFI should enter first?

Case Scenario 1: Blast Furnace, Inc., (BFI) Blast Furnace, Inc., (BFI) provides customized development of automated rich-media applications, and scalable solutions that allow media and entertainment companies, as well as enterprises and government organizations, to deploy, manage and distribute video content on IP-based networks. The company was founded in 1997 and went public in 2004; its stock trades on the NASDAQ under the ticker BLST. While providing solutions to a variety of firms and industries in North America, BFI has experienced its fastest growth with the security products that it designs and sells to the U.S. government and U.S. government agencies. This growth is based on its propriety VUE software, which is a complete identification solution for capturing, analyzing, and managing multi-biometric information. Proprietary analysis algorithms aggregate and cross-compare multiple biometrics to increase accuracy and lessen dependence on single identification techniques. Additionally, specialized encoding techniques reduce file size and increase analysis and response times. VUE supports a wide range of applications ranging from ID issuance and verification to gated entry screening for border patrol, airports, government buildings, and corporations. Essentially, VUE is able to sift through massive amounts of digitized multimedia files to create a unified ID dossier of an individual and then identify those individuals rapidly anywhere in the data. Such a capability is of great interest to security organizations, particularly since the World Trade Center bombing, because it allows the user to identify suspects within minutes on a real-time basis anywhere digitized media is being created (like that created by the hidden and visible surveillance cameras in airline terminals, banks, ATMs, and other public locations). Once a suspect is entered into the system, the software is capable of scanning all data sources automatically and without stop. For two years, BFI has had this market to itself but now two new entrants, a Belgian start-up and the subsidiary of a Finnish telecom firm, are staking out positions in large non-U.S. markets like Europe and Asia. BFI's management fears that if it limits its efforts to North America, then these aggressive competitors may eventually develop strongholds in other markets from which they can launch successful attacks on BFI's home turf. -(Refer to Case Scenario 1) Should BFI expand its operations outside of North America?

A firm based in a country with a national competitive advantage is not guaranteed success as it implements its chosen international business-level strategy. Instead the actual strategic choices managers make may be the most compelling reasons for success or failure.

A major incentive for the use of international an strategy by French-based Carrefour Group is the potential for large demand for goods and services from emerging markets such as China and India.

The transnational strategy is becoming increasingly necessary to compete in international markets for all the following reasons EXCEPT

Case Scenario 2: Heartsong LLC. Heartsong LLC is a designer and manufacturer of replacement heart valves based in Peoria, Illinois. While a relatively small company in the medical devices field, it has established a worldwide reputation as the provider of choice of high-quality, leading-edge artificial heart valves. Most of its products are sold to large regional hospital systems and research hospitals around the world, though primarily to customers in the U.S. and Europe. Specialty heart centers are another emerging, but fast-growing market for its valves. Heartsong has recently embarked on an expansion strategy that requires it to increase its volume, which in turn will demand more component parts than it can source domestically - both from an economic and volume standpoint. The firm has determined that such growth is only viable if it produces these parts itself overseas for a lower cost, or outsources the production entirely to a joint venture it establishes with a local manufacturer, which could both produce the parts more cheaply and in higher volumes. It is considering starting up an owned production facility in Luxembourg, or seeking a joint venture with a precision manufacturer in China. -(Refer to Case Scenario 2) What opportunities and threats might Heartsong be exposing itself to via the China expansion proposal?

The two important environmental trends that influence a firm's choice and use of international corporate-level strategies are _________ and ____________.