international business environment & strategy mod001148 determinants of national advantage –...
TRANSCRIPT
International Business Environment & Strategy
MOD001148
Determinants of national advantage – and where in the world to locate
Market entry
© Robert Jones 2010 - 2013
Objectives:
To identify factors in national advantage
Which nations are the best for business?
To consider factors in international strategy formulation
How do senior managers decide which nation to expand to?
Market entry considerations
Porter, M. (1990) Competitive Advantage of Nations, MacmillanEllis, J. & Williams D. (1995) International Business Strategy, Pitman
http://www.bbc.co.uk/news/business-15573991#tooltip19 04nov2011
Factor conditionsskills, resources
technological baseinfrastructure
Demand conditions
Firm strategy, structure &
rivalry
Related &supporting industries
Chance
Govtpolicies
Porter M.E. (1990)
Competitive Advantage of Nations,MacMillan
Porter’s Diamond The Determinants of National Advantage
International research data sources - 2013
© Robert Jones 2011, 2012 & 2013
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf
http://www.weforum.org/issues/global-competitiveness
WEF Global Competitiveness
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf
144 nations
Which are the most competitive nations?
Which are the top 3 competitive nations?
Hint: they all begin with an ‘S’
http
://w
ww
3.w
efor
um.o
rg/d
ocs/
WE
F_G
loba
lCom
petit
iven
essR
epor
t_20
12-1
3.pd
f
The BRICs
The BRICs
48
67
59
29
WEFGCR rank
The BRICs
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf
Example: competitive ranking of Canada
Example: competitive ranking of Canada
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdfPage 25
http://www.youtube.com/watch?v=kzn9-M2umFQ
http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB14-Full-Report.pdf
189 nations compared
Doing Business 2014
http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB14-Full-Report.pdf
116
92
134
96
DoingBusiness rank
The BRICs
Doing Business 2011
Doing Business 2014
PwC EM20 Index: 2009 Interim Update
http://www.pwc.co.uk/eng/publications/0309_em20_podcast.html
Emerging Markets - Balancing Risk & RewardThe PricewaterhouseCoopers EM20 Index2009 Interim Update
PwC EM20 Index: 2009 Interim Update
http://www.pwc.co.uk/eng/publications/0309_em20_podcast.html
Emerging Markets - Balancing Risk & RewardThe PricewaterhouseCoopers EM20 Index2009 Interim Update
http://www.internationalbusinessreport.com/files/global%20economy%20in%202013%20-%20final.pdf
http://www.internationalbusinessreport.com/
Tax
Who pays the most tax?
Where is the best place to do business?
http://www.pwc.com/gx/en/paying-taxes/assets/pwc-paying-taxes-2013-full-report.pdf
http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Special-Reports/Paying-Taxes-2014.pdf
Total tax rate
Time to comply
http://www.oecd.org/dataoecd/9/23/48193734.pdf
OECD 50TH ANNIVERSARY CHALLENGES IN DESIGNING COMPETITIVE TAX SYSTEMS
Paris, 30 June 2011 Tax Reform Trends in OECD Countries
The Forbes Tax Misery IndexOverall Tax
Burdenhttp://www.forbes.com/global/2009/0413/034-tax-misery-reform-index.html
Objectives:
To identify factors in national advantage
Which nations are the best for business?
To consider factors in international strategy formulation
How do senior managers decide which nation to expand to?
Market entry considerations
Porter, M. (1990) Competitive Advantage of Nations, MacmillanEllis, J. & Williams D. (1995) International Business Strategy, Pitman
Market Entry Mode gridAdapted from:- Ellis, J. & Williams D. (1995) International Business Strategy, Pitman
Market entry Entry to nation A Entry to nation B Entry to nation C
Key factors – take care whether positive or negative
Weight1-10[1]
Value1-5[2]
Weighted score[1]x[2]
Value 1-5[3]
Weighted score[1]x[3]
Value 1-5[4]
Weighted score[1]x[4]
Opportunities available
Skills availability
Resource availability
Degree of control req’d
Investment required
Level of risk Political
Level of risk Economic
Level of risk Social
Level of risk Tech
Speed to implement
Expected return
Total weighted score
Rank order
Macroenvironment – PESTEL
Exhibit 2.2
Political• Government stability• Taxation policy• Foreign trade
regulations• Social welfare
policies
Economic• Business cycles• GNP trends• Interest rates• Money supply• Inflation• Unemployment• Disposable income
Macroenvironment – PESTEL
Exhibit 2.2
Sociocultural• Population
demographics• Income distribution• Social mobility• Lifestyle changes• Attitudes to work and
leisure• Consumerism• Levels of education
Technological• Government spending on
research• Government and industry
focus on technological effort
• New discoveries /developments
• Speed of technology transfer
• Rates of obsolescence
Macroenvironment – PESTEL
Exhibit 2.2
Environmental• Environmental
protection laws• Waste disposal• Energy consumption
Legal• Competition law• Employment law• Health and safety• Product safety
Key Aspects of PESTEL Analysis
• Not just a list of influences
• Need to understand key drivers of change
• Drivers of change have differential impact on industries, markets, and organisations
• Focus is on future impact of environmental factors
• Combined effect of some of the factors likely to be most important
Control RisksRiskMap 2011
RiskMap 2011 provides a critical assessment of global, regional political, security and business issues that will prove a challenge in 2011 and beyond
http://www.control-risks.com/pdf/Control_Risks_RiskMap2011.pdf (04nov2011)
http://www.internationalbusinessreport.com/files/global%20economy%20in%202013%20-%20final.pdf
Grant Thornton IBR2013 International Business Report
World Economic Forum WEFThe Global Competitiveness Report 2012-2013http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf
World Bank Doing Business 2014http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB14-Full-Report.pdf
Control Risks http://www.control-risks.com/pdf/Control_Risks_RiskMap2011.pdf
Emerging Markets - Balancing Risk & Reward The PricewaterhouseCoopers EM20 Index 2009 Interim Updatehttp://www.pwc.co.uk/eng/publications/0309_em20_podcast.html
Paying Taxes 2014 – the Global Picturehttp://www.pwc.com/gx/en/paying-taxes/assets/pwc-paying-taxes-2013-full-report.pdf
Porter, M. (1990) Competitive Advantage of Nations, MacmillanEllis, J. & Williams D. (1995) International Business Strategy, Pitman