ba 447 - day 1
TRANSCRIPT
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 147
TOPICS IN INTERNATIONAL
BUSINESS
BA 447
Instructor Manolete V Gonzalez
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 247
Ice breaker ndash on a sheet of paper
bull Name
bull Major
bull As a student of international businesswhat topic of a global nature interestsyou For example as you scan anewspaper what article or news storywould attract your attention
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 347
Introduction
bull Learning Outcomes ndash An awareness of numerous issues of a global nature
that multinational enterprises face ndash An appreciation of the complexity of selected issues
ndash Understand how multinational enterprises can beaffected
ndash A capacity to investigate one such issue in itscomplexity
bull Approach ndash Exploratory ndash identify possible topicsissues ndash Investigative ndash understand a few select issues ndash Focus what may impact a multinational firm
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 447
Requirements
bull Read and contribute ndash Text The World Is Flat Updated and Expanded
Thomas Friedman ndash Readings Economist WSJ NYT etc
ndash Websites of similar news sources reputableorganizations
bull Quizzesbull Class Preparation Assignments
ndash Relevant to topic assigned for the day ndash Encourage participation and class discussion ndash In-class writing
bull Term project
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 547
Quizzes
bull Short essay questions covering
ndash Themes discussed in text
ndash Issues suggested in additional readings inschedule and other material given to class(including films that may be shown)
ndash In general broad topics discussed in class
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 647
Class Preparation Assignments
bull An article relevant to the subject matter tobe covered in class (see schedule)
bull A typed statement (one page) that
ndash Summarizes the article
ndash States what it can contribute to classdiscussion for that day
ndash Indicate Assignment number on top of page
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 747
Term Project
ndash Refer to instructions on website Focus on a specificissue drawn from current events ie based on anews story
ndash Submit proposal by 5th week of classesbull Article which contains the issuebull A description of the issue and questions to study
ndash Submit proposal end of dead weekbull Describe it objectivelybull Understand its different aspects through multiple
perspectives
bull Stakeholders and their interestsbull What are inherent conflicts and how might these be
resolvedbull Why relevant to a globalmultinational company
ndash Requirements 10-page report plus presentation
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 247
Ice breaker ndash on a sheet of paper
bull Name
bull Major
bull As a student of international businesswhat topic of a global nature interestsyou For example as you scan anewspaper what article or news storywould attract your attention
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 347
Introduction
bull Learning Outcomes ndash An awareness of numerous issues of a global nature
that multinational enterprises face ndash An appreciation of the complexity of selected issues
ndash Understand how multinational enterprises can beaffected
ndash A capacity to investigate one such issue in itscomplexity
bull Approach ndash Exploratory ndash identify possible topicsissues ndash Investigative ndash understand a few select issues ndash Focus what may impact a multinational firm
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 447
Requirements
bull Read and contribute ndash Text The World Is Flat Updated and Expanded
Thomas Friedman ndash Readings Economist WSJ NYT etc
ndash Websites of similar news sources reputableorganizations
bull Quizzesbull Class Preparation Assignments
ndash Relevant to topic assigned for the day ndash Encourage participation and class discussion ndash In-class writing
bull Term project
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 547
Quizzes
bull Short essay questions covering
ndash Themes discussed in text
ndash Issues suggested in additional readings inschedule and other material given to class(including films that may be shown)
ndash In general broad topics discussed in class
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 647
Class Preparation Assignments
bull An article relevant to the subject matter tobe covered in class (see schedule)
bull A typed statement (one page) that
ndash Summarizes the article
ndash States what it can contribute to classdiscussion for that day
ndash Indicate Assignment number on top of page
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 747
Term Project
ndash Refer to instructions on website Focus on a specificissue drawn from current events ie based on anews story
ndash Submit proposal by 5th week of classesbull Article which contains the issuebull A description of the issue and questions to study
ndash Submit proposal end of dead weekbull Describe it objectivelybull Understand its different aspects through multiple
perspectives
bull Stakeholders and their interestsbull What are inherent conflicts and how might these be
resolvedbull Why relevant to a globalmultinational company
ndash Requirements 10-page report plus presentation
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 347
Introduction
bull Learning Outcomes ndash An awareness of numerous issues of a global nature
that multinational enterprises face ndash An appreciation of the complexity of selected issues
ndash Understand how multinational enterprises can beaffected
ndash A capacity to investigate one such issue in itscomplexity
bull Approach ndash Exploratory ndash identify possible topicsissues ndash Investigative ndash understand a few select issues ndash Focus what may impact a multinational firm
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 447
Requirements
bull Read and contribute ndash Text The World Is Flat Updated and Expanded
Thomas Friedman ndash Readings Economist WSJ NYT etc
ndash Websites of similar news sources reputableorganizations
bull Quizzesbull Class Preparation Assignments
ndash Relevant to topic assigned for the day ndash Encourage participation and class discussion ndash In-class writing
bull Term project
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 547
Quizzes
bull Short essay questions covering
ndash Themes discussed in text
ndash Issues suggested in additional readings inschedule and other material given to class(including films that may be shown)
ndash In general broad topics discussed in class
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 647
Class Preparation Assignments
bull An article relevant to the subject matter tobe covered in class (see schedule)
bull A typed statement (one page) that
ndash Summarizes the article
ndash States what it can contribute to classdiscussion for that day
ndash Indicate Assignment number on top of page
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 747
Term Project
ndash Refer to instructions on website Focus on a specificissue drawn from current events ie based on anews story
ndash Submit proposal by 5th week of classesbull Article which contains the issuebull A description of the issue and questions to study
ndash Submit proposal end of dead weekbull Describe it objectivelybull Understand its different aspects through multiple
perspectives
bull Stakeholders and their interestsbull What are inherent conflicts and how might these be
resolvedbull Why relevant to a globalmultinational company
ndash Requirements 10-page report plus presentation
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 447
Requirements
bull Read and contribute ndash Text The World Is Flat Updated and Expanded
Thomas Friedman ndash Readings Economist WSJ NYT etc
ndash Websites of similar news sources reputableorganizations
bull Quizzesbull Class Preparation Assignments
ndash Relevant to topic assigned for the day ndash Encourage participation and class discussion ndash In-class writing
bull Term project
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 547
Quizzes
bull Short essay questions covering
ndash Themes discussed in text
ndash Issues suggested in additional readings inschedule and other material given to class(including films that may be shown)
ndash In general broad topics discussed in class
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 647
Class Preparation Assignments
bull An article relevant to the subject matter tobe covered in class (see schedule)
bull A typed statement (one page) that
ndash Summarizes the article
ndash States what it can contribute to classdiscussion for that day
ndash Indicate Assignment number on top of page
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 747
Term Project
ndash Refer to instructions on website Focus on a specificissue drawn from current events ie based on anews story
ndash Submit proposal by 5th week of classesbull Article which contains the issuebull A description of the issue and questions to study
ndash Submit proposal end of dead weekbull Describe it objectivelybull Understand its different aspects through multiple
perspectives
bull Stakeholders and their interestsbull What are inherent conflicts and how might these be
resolvedbull Why relevant to a globalmultinational company
ndash Requirements 10-page report plus presentation
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 547
Quizzes
bull Short essay questions covering
ndash Themes discussed in text
ndash Issues suggested in additional readings inschedule and other material given to class(including films that may be shown)
ndash In general broad topics discussed in class
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 647
Class Preparation Assignments
bull An article relevant to the subject matter tobe covered in class (see schedule)
bull A typed statement (one page) that
ndash Summarizes the article
ndash States what it can contribute to classdiscussion for that day
ndash Indicate Assignment number on top of page
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 747
Term Project
ndash Refer to instructions on website Focus on a specificissue drawn from current events ie based on anews story
ndash Submit proposal by 5th week of classesbull Article which contains the issuebull A description of the issue and questions to study
ndash Submit proposal end of dead weekbull Describe it objectivelybull Understand its different aspects through multiple
perspectives
bull Stakeholders and their interestsbull What are inherent conflicts and how might these be
resolvedbull Why relevant to a globalmultinational company
ndash Requirements 10-page report plus presentation
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 647
Class Preparation Assignments
bull An article relevant to the subject matter tobe covered in class (see schedule)
bull A typed statement (one page) that
ndash Summarizes the article
ndash States what it can contribute to classdiscussion for that day
ndash Indicate Assignment number on top of page
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 747
Term Project
ndash Refer to instructions on website Focus on a specificissue drawn from current events ie based on anews story
ndash Submit proposal by 5th week of classesbull Article which contains the issuebull A description of the issue and questions to study
ndash Submit proposal end of dead weekbull Describe it objectivelybull Understand its different aspects through multiple
perspectives
bull Stakeholders and their interestsbull What are inherent conflicts and how might these be
resolvedbull Why relevant to a globalmultinational company
ndash Requirements 10-page report plus presentation
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 747
Term Project
ndash Refer to instructions on website Focus on a specificissue drawn from current events ie based on anews story
ndash Submit proposal by 5th week of classesbull Article which contains the issuebull A description of the issue and questions to study
ndash Submit proposal end of dead weekbull Describe it objectivelybull Understand its different aspects through multiple
perspectives
bull Stakeholders and their interestsbull What are inherent conflicts and how might these be
resolvedbull Why relevant to a globalmultinational company
ndash Requirements 10-page report plus presentation
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 847
Other Guidelines
bull Assignments and Term Projects must betyped and written well for a professionalaudience
bull Assignments must be submitted in classduring the session stated in schedule
bull No late submissions for Assignments
These are intended as preparations forclass discussions
bull Term Projects are due last day of classes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 947
Course Structure
bull Friedman book provides preliminary frameworkfor understanding issues affecting multinationals
ndash concept of a ldquoflat worldrdquo
ndash what flattened it ndash the implications of this bdquoflat worldrdquo
bull We will investigateelaborate on additionalthemes based on this framework
ndash We will challenge those ideas that we think requiremore scrutiny
bull Note major headings in schedule
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1047
REVIEW
GLOBAL STRATEGIES
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1147
Process of Expansion
bull A global company emerges as a result ofsignificant international expansion
bull International expansion is a gradualprocess and can involve different avenues
ndash Exporting
ndash Licensing or franchising
ndash Joint-ventures often with ldquolocalrdquo companies
ndash Wholly-owned Subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1247
Why Global Expansion
bull Competencies that provide advantages ndash Technological
bull Wholly-owned subsidiary is preferred over
licensing and joint ventures ndash Management competency
bull Franchising joint ventures subsidiaries
bull Search for low cost locations ndash Due to pressures to remain competitive
improve marginsbull Exporting and wholly-owned subsidiaries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1347
Factors Leading to ContinuedGlobal Expansion
bull Location economies
ndash There are economic benefits to performing a valuecreation activity in an optimal location
ndash Effectsbull Can lower costs
bull Can enable differentiation
bull Underlying concept the experience curve
ndash Serving a global market from one or a few plants isconsistent with moving down the experience curveand establishing a low-cost position
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1447
Factors Leading to ContinuedGlobal Expansion (cont‟d)
bull Transferring distinctive competencies
ndash Companies with distinctive competencies canrealize large returns by expanding to global
markets where competitors lack similarcompetencies and products
bull Caveats -
ndash Transportation costs ndash Trade barriers
ndash Political and economic risks
If t t k h t f
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1547
If one were to take a snap shot ofglobal or international firms some
would be bull Exporting from home country
bull Licensing or franchising
bull Operating in other countries through jointventures
bull Operating in other countries through
wholly owned subsidiaries
bull Or a combination of all of these
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1647
Typology of Global strategies ndash factors to consider
bull Pressures for cost reductions
bull Pressures for local responsiveness
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1747
Four Basic Strategies
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1847
Description of each globalstrategy
bull International strategy
ndash Transfer competencies or products to foreign marketswhere indigenous competitors lack thosecompetenciesproducts
ndash Makes sense ifbull company has a valuable competence that indigenous
competitors lack
bull weak pressure for local responsiveness and cost reductions
bull Examples Proctor and Gamble and Xerox
ndash Develop products at home establish manufacturingand marketing functions in each major countryregion
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 1947
Description of each globalstrategy (cont‟d)
bull Multi-domestic or localization strategy ndash Develop a business model that allows
maximum local responsiveness
ndash Makes sense when there arebull high pressures for local responsiveness and
bull low pressures for cost reductions
bull Examples MTV
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2047
Description of each globalstrategy (cont‟d)
bull Global (standardization) strategy
ndash Focus on increasing profitability by reaping costreductions that come from experience curve effectsand location economies pursuing a low-cost strategyon a global scale
ndash Makes sense when there arebull strong pressures for cost reductions and
bull demand for local responsiveness is minimal
bull Example Intel Motorola Texas Instrument ndash market a standardized product worldwideproducts which serve universal need
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2147
Description of each globalstrategy (cont‟d)
bull Transnational strategy
ndash Simultaneously seek to lower costs be
locally responsive and transfercompetencies in a way consistent withglobal learning
bull Example Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2247
Examples of companiespursuing a global strategy
bull International strategy ndash Proctor and Gamble and Xerox
bull Develop products at home establish manufacturing andmarketing functions in each major country or region
bull Multi-domestic or localization strategy ndash MTV
bull Global (standardization) strategy ndash Example Intel Motorola Texas Instrument
bull market a standardized product worldwide products which
serve universal need
bull Transnational strategy ndash Caterpillar
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2347
Different Companies DifferentConfiguration
bull SC Johnson amp Sons
bull LG
bull NIKE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2447
Example of international strategySC Johnson amp Sons Inc
bull 119-year-old fifth-generation family-owned and managed
bull 12000 employees in 70 countries US
headquartersbull Leading manufacturer of consumer
household products
bull Manufactures in over 20 countriesmarkets to over 110
bull $65 billion in annual sales
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2547
A Brief History of LG
bull Established in 1958 as Goldstar a pioneerKorean electronics manufacturer
bull In 1995 company name was changed toLG Electronics acquired US-based Zenith
bull Joint venture with Philips in 1999
bull As of 2004 annual sales of US $38 billionover 66000 employees (32000 in Korea)in 76 subsidiaries in 39 countries
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2647
LG likes to vertically integratehellip
bull LGPhilips
ndash Operates vertically integrated plant - research anddevelopment parts and materials companies as wellas the finished products
bull LG Chem
ndash Vertically integrated since 1991 after merging LGAdvanced Materials LG Polychemical and LG
Pharmaceuticalbull LG Telecom
ndash Network provided by Cisco Systems Inc
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2747
Transnational example NIKE
Categories
o Running
o BasketballBrand Jordan
o TrainingWalking
o Soccer
o CleatedGolf
o Outdoor
o Tennis
o Active Life
o Kids
Factories
o Korea
o Taiwan
o China
o Thailand
o Vietnam
o Indonesia
o Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2847
Jakarta Indonesia
Bangkok Thailand
Guangzhou China
Fuzhou Putien andShanghai ChinaTaichung Taiwan
Pusan ROKChina
Ho Chi Minh Vietnam
Where We Manufacture
Qingdao China
Italy
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 2947
o Currently contract approximately37 Factories
o 5 Manufacturing Leadership Partners
(T2 PC FT PA CS) RepresentApprox 50 of NIKE Capacity
Our World - The Manufacturing Pie
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3047
o LN (made up of 4 sub-factories)
o Average Capacity 12 million prmo
o 25 Lineso Models per PO 60 SKU
o Average Daily Output 43000 prs per day
o Number of Employees 25000 +
A Factory
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3147
The World Is Flat
Introduction to the Friedman book
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3247
Round World
bull From ancient times to about the middle agespeople believed the world was flat ndash If one walked too far one could fall off into a deep
abyss
ndash The sky was an inverted bowl covering the surface ofthe known earth
bull There were those who tried to claim otherwisereasoning from observation etc
bull However adhering to this belief was convenient ndash Security the ldquoknown worldrdquo could be understood ndash ldquoKnown worldrdquo could be carved up
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3347
Round World
bull The text talks about Columbus and his discovery of theAmericas in 1492
bull Columbus‟s journey revealed the existence of another land mass (The Vikings seems to have gotten there firstbut nobody at that time heard too much about it)
bull In the early 1500s Magellan started a journey that led tohis fleet being the first to circumnavigate the earth ndash Remember Columbus basically crossed the Atlantic and got as
far as the Caribean islands in 1492 ndash Magellan did not make it past what is now the Philippines but
his fleet was able to make it back to Spainbull This later singular event proved that the world was
round that one could head out east and arrive from thewest
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3447
Round World
bull Columbus‟ voyage and subsequent circumnavigation of the world by Magellan‟s fleet ndash Challenged boundaries of the ldquoknown worldrdquo
ndash Presented a challengeopportunity to political status quo ndash Exploration to expand dominions wealth
bull In terms of international trade ndash There was at that time a search for a way to get to the ldquoIndiesrdquo
and obtain spices without heading through the middle east
bull Those who could explore the wealthy kingdoms couldsecure terms of trade by
ndash Monopolizing travel in terms of capability to allocate resources toman fleets and to control navigational routes
ndash Knowledge and resources were critical to trade
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3547
Flat World
bull Friedman‟s notion of a flat world suggests a challenge tohow we think of things ndash Globalization 10 (1492-1800) after discovery that the earth was
round a flurry of explorationexpeditions shrank the knownworld The kingdoms in Europe pursued global expansion that
included discovering and controlling international trade ndash Globalization 20 (1800 ndash 2000) multinationals followed their
countries and took over international trade
ndash Globalization 30 (2000- ) individuals of diverse backgroundsable to collaborate and compete globally
bull With Globalization 30 ldquoplaying fieldrdquo has been leveled
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3647
Flat world ndash Southwest Airlines
bull Globalization 10 ndash ticket agent issues youyour ticket
bull Globalization 20 ndash e-ticket machinereplaced ticket agent
bull Globalization 30 ndash you are your own ticketagent (get your boarding pass at home)
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3747
Visible Signs of a Flat World
bull My Videosconanwmv
bull Playing on a golf course in BangaloreIndia and staring at buildings owned by UScompanies
ndash Also the apparent ldquowesternizationrdquo of these
campuses
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3847
Signs of a ldquoflat worldrdquo in text
bull Accounting basic returns done in Indiatax and financial planning done in US
bull News reporting wire service (write basic
news) is outsourced analysis in USbull Medicine analysis of CAT scans by
trained radiologists
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 3947
Call center examples
bull At take home pay of $200 per monthIndians can live well and at home Noneed to migrate
bull Try the statement on p 27
ndash Conan film
bull RampD 1000 patent applications with US
patent office from Bangalore units ofCisco Intel IBM TI GE
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4047
And it is not just ldquous and themrdquo
bull Japanese speaking Chinese do work forJapanese companies
bull Outsourcing conversion of hand drawingsinto digital blueprints ndash Malaysia andPhilippines
bull Home sourcing in UTAH
bull McDonald‟s drive through orders
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4147
More signs of a ldquoflat worldrdquo
bull Key any activity whose value chain canbe digitized decomposed and movedaround will be moved
bull Bill Ardolino and his InDC Journal
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4247
ldquoFlat worldrdquo and global companies
bull Friedman uses his concept of a flat world todescribe how the environment of internationaltrade has evolved
ndash He describes what has contributed to this evolutionand the implications of this flat world
ndash Global companies have been both instrumental to thecreation of and will be affected by this flat world
bull We will question some of his assumptions andhis conclusions by discussing specific issues inmore depth
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4347
Moving Forward
bull Elaborate on concept of a flat world
bull What were the ldquoflattenersrdquo that resulted in
this flat world
bull Discuss the notion of a ldquotriple
convergencerdquo which summarizes these
flatteners
bull NOTE regarding reading the text read forsubstance do not get lost in stories
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4447
House Rules
bull Read material before coming to class
bull We will discuss topics Debate with eachother if you wish
bull Seek clarification of assignments early andin class so all may benefit
bull Informal but lets remember why we arehere
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4547
House Rules
bull Keep distractions to a minimum respect your peers ndash Shut off cell phones or place them in silent mode (note an
unattended vibrating cell phone is distracting)
ndash Avoid side discussions with your neighbor
ndash Come to class on time if you do arrive late enter quietlyand unobtrusively eg do not walk in front of theinstructor
ndash If you have to leave early let the instructor know and sitwhere you can leave without disturbing too many students
bull ldquoMulti-taskingrdquo during class is not appreciated for examplereading the newspaper working on a paper for another classsleeping etc
ndash Using laptops are ok for note taking or reference to notes
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4647
House Rules
bull Respect each otherbull Tolerate differences of opinion and manner of participating
bull If you have strong opinions voice it and be heard listen toresponses engage in an exchange of opinions and thenallow the class to move on
bull Humor informal ok But do remember why we are in class
bull Other suggestions
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences
842019 BA 447 - day 1
httpslidepdfcomreaderfullba-447-day-1 4747
On your sheets of paper
bull State a time during the week other thanclass time that you can set aside forgroup activity related to this class
bull Other preferences