INTERNATIONAL EXPANSION AND GLOBAL MARKET

OPPORTUNITY ASSESSMENT

Rationale for International Expansion

●​ To improve the cost-effectiveness of their operations,

●​ To expand into new markets for new customers, and
●​ To follow global customers.

Planning for International Expansion

●​ Prioritize which countries to enter.

●​ Some markets may be smaller in size, but their strategic complexity is lower, which may
make them easier to enter and easier from an operations point of view.
●​ Some markets are bigger in size, but there are substantial regional differences within a
given country, so careful investigation, research, and planning are important to do before
entry.

INTERNATIONAL MARKET DUE DILIGENCE

●​ Involves analyzing foreign markets for their potential size, accessibility, cost of
operations, and buyer needs and practices to aid the company in deciding whether to
invest in entering that market.
●​ Relies on using not just published research on the markets but also interviews with
potential customers and industry experts.
●​ A systematic analysis needs to be done, using tools like PESTEL and CAGE
○​ PESTEL, the framework for analyzing the Political, Economic, Sociocultural,
Technological, Environmental, and Legal aspects of different international
markets.
○​ CAGE (Cultural, Administrative, Geographic, and Economic) framework address
questions related to the flattening of markets and how the dimensions they help
you assess are essentially flatteners.
■​ Flattening of markets generally refers to a situation where differences
(spreads) in prices, returns, growth, or opportunities across markets
narrow, making markets look more similar to each other than before.

Regional Differences

●​ The next part of due diligence is to understand the regional differences within the
country and to not view the country as a monolith.
 ■​ Monolith is something that is single, massive, and unified, rather than
made up of smaller independent parts.
●​ For example, although companies are dazzled by China’s large market size, deeper
analysis shows that 70 percent of the population lives in rural areas.
○​ Distribution challenges given China's vast distances.
○​ Consumers in different regions speak different dialects and have different tastes in
food.
○​ Purchasing power of consumers varies in the different cities.

Understanding Local Consumers​

Entering a market means understanding the local consumers and what they look for when
making a purchase decision.

●​ In some markets, price is an important issue.

●​ In other markets, such as Japan, consumers pay more attention to details such as the
quality of products and the design and presentation of the product. The Japanese demand
for perfect products means that firms entering Japan might have to spend a lot on quality
management.

How to Learn the Needs of a New Foreign Market

●​ The best way for a company to learn the needs of a new foreign market is to deploy
people to immerse themselves in that market.
●​ Larger companies, like Intel, employ ethnographers and sociologists to spend months in
emerging markets, living in local communities and seeking to understand the latent,
unarticulated needs of local consumers.

Differentiation and Capability

●​ When entering a new market, companies also need to think critically about how their
products and services will be different from what competitors are already offering in the
market so that the new offering provides customers value.
●​ Companies trying to penetrate a new market must be sure to have some proof that they
can deliver to the new market; this proof could be evidence that they have spoken with
potential customers and are connected to the market.

PESTEL Analysis

●​ PESTEL is an acronym for the political, economic, sociocultural, technological,

environmental, and legal contexts in which a firm operates.
●​ An important and widely used tool that helps show the big picture of a firms external
environment, particularly as related to foreign markets.
 ●​ To identify external forces that an organization cannot control but must adapt to
●​ Helps managers gain a better understanding of the opportunities and threats they face;

CAGE Analysis

●​ CAGE (cultural, administrative, geographic, and economic)

●​ CAGE framework offers businesses a way to evaluate countries in terms of distance
between them.
●​ Distance - means the differences between countries in terms of their physical geographic
distance, culture, administrative (currencies, trade agreements), and economic
considerations.

Aspect CAGE PESTEL

Focus Differences between Environment within one

countries country

Purpose Compare and assess market Analyze macro factors

distance or suitability affecting business

Used For International expansion, Country analysis, strategic

market comparison planning

Perspective Comparative Descriptive

Example Use Is it easier for a Philippine What is the business

company to expand to environment like in
Malaysia or France? Malaysia?

Example:

PESTEL Analysis - Pharmaceutical Industry (Philippines)

P - Political

●​ Government price regulation on essential medicines

●​ DOH and PhilHealth policies affecting drug procurement
●​ Political stability influencing foreign investment
●​ Public health programs increasing demand for genetics

E - Economic

●​ Peso-USD exchange rate affecting imported raw materials and finished goods
●​ Inflation impacting production and logistic costs
●​ GDP growth influencing healthcare spending
 ●​ Interest rates affecting working capital financing

S - Social

●​ Aging population increasing demand for chronic disease medicines

●​ High health awareness post-pandemic
●​ Preference for affordable generic medicines
●​ Urban-rural access gap in healthcare services

T - Technological

●​ Advances in biotech and drug development

●​ Digital health platforms and e-prescriptions
●​ Automation in manufacturing and packaging
●​ Cold-chain logistics improvements

E - Environmental

●​ Strict waste disposal rules for pharmaceutical by-products

●​ Environmental compliance costs (DENR regulations)
●​ Pressure to reduce carbon footprint in manufacturing
●​ Sustainable packaging initiatives

L - Legal

●​ FDA Philippines approval requirements

●​ Intellectual property protection and patent laws
●​ Price Act and Generics Act compliance
●​ Data privacy laws affecting patient data

Example: Philippines vs Malaysia

CAGE Analysis

C - Cultural Distance

Aspect Philippines Malaysia Impact

Language English widely used, Malay (Bahasa Low-moderate

Filipino Malaysia); English distance
common in business

Religion Predominantly Predominantly Affects food, finance,

Christian Muslim holidays
 Business Culture Relationship-oriented, More formal, Management style
flexible time hierarchical differences

Consumer taste Western-influenced Halal-conscious, Product-adaptation

Asian-oriented needed

Implication:

Marketing, HR policies, and product offerings often need local customization, especially for
good, finance, and consumer goods.

A - Administrative Distance

Aspect Philippines Malaysia Impact

Legal system Civil law with US Common law (British Contract structure
influence influence) differs

Trade relations ASEAN member ASEAN member Low trade barriers

Regulation Decentralized, More centralized, Compliance planning

sometimes slower predictable differs

Corruption Moderate Lower than PH Risk assessment

perception differs

Implication:

ASEAN membership reduces tariffs, but regulatory processes and enforcement styles
differ.

G - Geographic Distance

Aspect Comparison Impact

Physical distance ~2,500km Moderate logistics costs

Time zone Same (GMT+8) No time-zone friction

Climate Tropical Tropical

Connectivity Sea & air routes Strong regional hubs

Implication:
Geographic distance is relatively low, favoring regional operations and supply chains.

E - Economic Distance

Aspect Philippines Malaysia Impact

GDP per capita Lower Higher Pricing & positioning

differ

Income distribution Wider inequality More even Market segmentation

differs

Industrial base Services, BPO, Manufacturing, Entry mode differs

remittances electronics

Currency PHP MYR FX exposure needed

Implication:

Products may need different pricing, features, and financing models.

INTERNATIONAL EXPANSION

Specialized Entry Modes: Investment

• Joint Ventures

- equity joint venture is a contractual, strategic partnership between two or more separate
business entities to pursue a business opportunity together.

- partners in an equity joint venture each contribute capital and resources in exchange for an
equity stake and share in any resulting profits.

• Wholly Owned Subsidiaries/Greenfield Venture

- to have a direct operating presence in the foreign country, completely under their control.

- establish a new, wholly owned subsidiary (i.e., a greenfield venture) from scratch

• Acquisition/Brownfield Venture

- purchase an existing company in that country

- purchase resellers or early partners

- purchase a local supplier for direct control of the supply - known as vertical integration.

• Licensing

- granting of permission by the licenser to the licensee to use intellectual property rights, such as
trademarks, patents, brand names, or technology under defined conditions.

- The licenser is normally paid a royalty on each unit produced and sold.

- Although the multinational fir usually has no ownership interests, it often provides ongoing
support and advice.

• Franchising

- multinational firm grants rights on its intangible property, like technology or a brand name, to a
foreign company for a specified period of time and receives a royalty in return.

- franchiser provides a bundle of services and products to the franchisee.

- the franchisee gets access to all franchisor products, systems, services, management expertise.

●​ A license gives permission to use intellectual property.

●​ A franchise gives the right to run a business under an established brand and system.

Exporting, Importing/Global Sourcing

Exporting is defined as the sale of products and services in foreign countries that are sourced or
made in the home country.

Importing refers to buying goods and services from foreign sources and bringing them back into
the home country. Also known as global sourcing,

Exporting
• an effective entry strategy for companies that are just beginning to enter a new foreign market.

• low-cost, low-risk option compared to the other strategies.

• good strategy for small and midsize companies that can't or won't make significant financial
investment in the international market.

Risks of Exporting

• the distributor or buyer might switch to or at least threaten to switch to a cheaper supplier in
order to get a better price.

• someone might start making the product locally and take the market away

• Local buyers sometimes believe that a company which only exports to them isn't committed to
providing long-term service and support once a sale is complete. Thus, they may prefer to buy
from someone producing directly within the country,

Given all this, many companies begin to reconsider having 2 local presence, which moves them
toward one of the other entry options.

Global sourcing

• refers to buying the raw materials, components, complete products, or services from companies
located outside the home country.

• Information technology and communications have enabled the outsourcing of business

processes, enabling those processes to be performed in different countries around the world.

Best practices in global sourcing include the following components:

• Using ISO 9001:2008 certification to help ensure the quality of products regardless of where
they are produced

• Using ISO 14000 certification to help ensure the adherence to environment-friendly practices
of the company providing the products

• Using service-level agreements to ensure the quality of services

• Entrepreneurs benefit from outsourcing because they can acquire services as needed, without
having to build those capabilities internally.
COMMON ISO STANDARDS

●​ ISO 9001 - Quality Management Systems

●​ ISO 14001 - Environmental Management Systems
●​ ISO 45001 - Occupational Health and Safety
●​ ISO 27001 - Information Security Management
●​ ISO 22000 - Food Safety Management
●​

Main parties involved in export and import transactions:

• exporter - the person or entity sending or transporting the goods out of the country

• importer - the person or entity buying or transporting goods from another country into the
importers home country

• carrier - the entity handling the physical transportation of the goods

• customs-administration offices from both the home country and the foreign country

Intermediaries, such as freight forwarders and export management companies (EMC), provide
companies with expert services so that the firms dont have to build those capabilities in-house.

• Freight Forwarders specialize in identifying the best shipping methods, understanding trade
regulations, and arranging to have exported goods clear customs,

• EMCs handle the necessary documentation, find buyers for the export, and take title of the
goods for direct export.

Essential documents for importing and exporting include

• bill of lading - for sea shipments; contract between the exporter and the

carrier;

• air waybill - for plane shipments,

• export declaration - prepared and filed by the exporter

• Import declaration - prepared and filed by the importer

• letter of credit, (LC) is a written guarantee from a bank that promises to pay the seller
(exporter on behalf of the buyer (importer) - as long as the seller meets all the terms and submits
the required documents.

An HS code in an import declaration refers to the Harmonized System code, a

standardized

Numerical code used worldwide to classify goods in international trade.

PEZA stands for the Philippine Economic Zone Authority.

Il is a government agency under the Department of Trade and nes

Industry (DT) that promotes investments by developing, regulating, Fand supervising economic
zones in the Philippines.

●​ Registers and assists export-oriented and domestic enterprises

●​ Develops and manages economic zones (eco-zones)
●​ Grants fiscal and non-fiscal incentives to qualified companies Provides one-stop-shop
services to make doing business easier

Incentives for PEZA-registered companies

 ●​ Income Tax Holiday (TH) (usually 4-7 years)
●​ 5% Gross Income Earned (GIE) tax in lieu of all national and local taxes (after ITH, for
certain firms)
●​ Tax- and duty-free importation of capital equipment and raw materials
●​ Zero-rated VAT on local purchases (subject to current tax ruies)
●​ Simplified customs procedures
●​ Special visa and work permit arrangements for foreign nationals

STRATEGY ON INTERNATIONAL BUSINESS

A strategy is the central, integrated, externally oriented concept of how a firm will achieve its
objectives.

●​ Strategy formulation (or simply strategizing) is the process of deciding what to do.
●​ Strategy implementation is the process of performing all the activities necessary to do
what has been planned.
●​ The leaders of the organization formulate strategy, while everyone is responsible for
strategy implementation.

STRATEGIZING

●​ Corporate Strategy
○​ What business or businesses should we be in?
○​ How does the parent company add value to the subsidiaries?
○​ How does being in one business help us compete in our other businesses?
●​ Business Strategy
○​ How should we compete?

Corporate Strategy - Where do we compete?

Key corporate-level decisions involved:

●​ Enter renewable energy businesses

●​ Exit coal and oil assets
●​ Acquire or invest in solar and wind subsidiaries
●​ Allocate capital across countries and energy types
●​ Decide whether to integrate generation, storage, and retail

Business Strategy - How do we compete?

Example (Solar Power Subsidiary)

●​ Business Unit: Utility-scale solar generation

 ●​ Business Strategy: “The solar unit will compete by being the lowest-cost producer of
utility-scale solar power through large-scale projects, long-term power purchase
agreements (PPAs), and operational efficiency.”

INTERNATIONAL STRATEGY

Specialized in the sense that corporate strategy guides the choice of which markets, including
different countries, a firm competes in; Even when a firm doesn’t sell products or services
outside its home country, its international strategy can include importing, international
outsourcing, or offshoring.

●​ Importing involves the sale of products or services in one country that are sourced in
another country.
●​ Outsourcing - the company delegates an entire process (e.g., accounts payable) to the
outsource vendor; The outsourcer may do the work within the same country or make take
it to another country (also known as offshoring).
●​ International outsourcing refers to work that is contracted to a non domestic third party.

THE STRATEGIZING PROCESS

●​ Strategy formulation typically comes from the top managers or owners of an

organization, while the responsibility for strategy implementation resides with all
organizational members. This entire set of activities is called the strategizing process.
●​ Strategic planning, together with organizing, leading, and controlling, is sometimes
referred to by the acronym P-O-L-C. This is the framework managers use to understand
and communicate the relationship between strategy formulation and strategy
implementation.
MISSION STATEMENT

The organization's statement of purpose and describes who the company is and what it does.

VISION STATEMENT

●​ A future-oriented declaration of the organization’s purpose, of what it wants to become.

●​ The strategy should flow directly from the vision, since the strategy is intended to
achieve the vision and satisfy the organization’s mission. Along with some form of
internal and organizational analysis using SWOT, a strategy is formulated into a strategic
plan.

THE FUNDAMENTALS OF SWOT ANALYSIS

●​ Developed by Kenneth R. Andrews in the early 1970s.

●​ Assessment of a company’s strengths and weaknesses which occur as part of
organizational analysis.
●​ Examination of the opportunities and threats outside the organization over which it has
less control.

EXAMPLES

●​ Vision Statements (future-focused, aspirational)

○​ “To be the most trusted provider of innovative solutions that improve everyday
life.”
 ○​ “A world where businesses grow sustainably and communities thrive.”
○​ “To lead the industry through excellence, integrity, and innovation.”
●​ Mission Statements (present-focused, action-oriented)
○​ “We deliver high-quality products and services by putting customers first and
continuously improving our processes.”
○​ “Our mission is to create value for our stakeholders through responsible
operations and long-term partnerships.”
○​ “We empower our customers by providing reliable, affordable, and innovative
solutions.”
STRATEGY DIAMOND
A strategy consists of an integrated set of choices.

●​ Arenas - Where will we be active?

●​ Differentiators - How will we win in the marketplace?
●​ Vehicles - How will we get there?
●​ Staging - What will be out speed and sequence of moves?
●​ Economic logic - How will we obtain our returns?

EXAMPLES OF STRATEGIES GIVEN THE MISSION AND VISION STATEMENTS

●​ Mission: “We manufacture and deliver products that meet international standards while
promoting environmental responsibility and employee well-being.”
●​ Vision: “To be a globally competitive company known for quality, safety, and
sustainability.”

STRATEGIES

1.​ Quality & International Standards Strategies

a.​ Implement ISO-certified management systems (e.g., ISO 9001 for quality, ISO
14001 for environment, ISO 45001 for occupational health & safety)
b.​ Standardize production processes - Develop SOPs aligned with international
benchmarks and conduct regular internal audits
c.​ Supplier quality assurance program - Source raw materials only from accredited
suppliers that meet international and ethical standards
d.​ Continuous improvement (Kaizen / Lean Manufacturing) - Use root-cause
analysis and corrective actions to reduce defects and rework
2.​ Employee Well-being Strategies
 a.​ Occupational health and safety programs - Conduct regular safety training, hazard
identification, and emergency drills
b.​ Work-life balance initiatives - Flexible work arrangements where possible;
regulated overtime policies
c.​ Employee development and training - Continuous skills training, leadership
development, and career progression pathways
d.​ Health and wellness programs - Medical checkups, mental health support, and
wellness activities
3.​ Compliance & Governance Strategies
a.​ Strict regulatory compliance - Adhere to labor laws, environmental regulations,
and product safety standards
b.​ Ethical and transparent management practices - Establish a code of conduct and
grievance mechanism
c.​ Data-driven performance monitoring - Use KPIs for quality, safety, environmental
impact, and employee satisfaction

GLOBAL ENTREPRENEURSHIP AND INTRAPRENEURSHIP

What’s in it for me?

1.​ Who is an entrepreneur, and what is entrepreneurship?

2.​ What do entrepreneurs do?
3.​ What is entrepreneurship across borders?
4.​ How does entrepreneurship lead to global start-ups?
5.​ What is intrapreneurship?

Why go Global? kBecause It’s what entrepreneurs do!

●​ Entrepreneurs are go-getters who seize opportunities and work tirelessly to overcome
obstacles
●​ Entrepreneurs who expand internationally face even more risks and challenges, but many
of them thrive on those very challenges because those challenges bring previously unseen
new opportunities

ENTREPRENEURSHIP AND ENTREPRENEURS

●​ Entrepreneur is a French word that means “TO UNDERTAKE”

●​ In the business world, this term applies to someone who wants to start a business or
enterprise
 ●​ Entrepreneurship is defined as the recognition of opportunities (needs, wants, problems,
and challenges) and the use or creation of resources to implement innovative ideas for
new, thoughtfully planned ventures

HOW DO ENTREPRENEURS IDENTIFY OPPORTUNITIES FOR NEW BUSINESS

VENTURES?

●​ They actively search for opportunities

-​ They don't just passively wait for an idea to hit them
-​ They don’t just look at traditional sources of information, like news and trade
publicators
-​ They search out more unusual sources. Such as specialized publications or
conversations with personal contacts, to get hints of new opportunities
●​ Entrepreneurs are particularly alert to opportunities
-​ They look for changed conditions or overlooked ideas
●​ Research confirms that prior knowledge - information gathered from prior
experience - helps entrepreneurs identify potentially profitable opportunities

TRUTHS AND MYTHS ABOUT ENTREPRENEURS

TRUTHS

-​ Entrepreneurs work hard and are driven by an intense commitment and determined
perseverance
-​ They see the cup half full, rather than half empty
-​ They strive for integrity; they burn with the competitive desire to excel and win
-​ They are dissatisfied with the status quo and seek opportunities to improve almost any
situation they encounter
-​ They use failure as a tool for learning and eschew perfection in favor of effectiveness
-​ They believe they can personally make an enormous difference in the final outcome of
their ventures and their lives

MYTHS

-​ Entrepreneurs are born, not made

-​ Entrepreneurs make more money
-​ Being original is essential
-​ It takes a lot of money to start a business
-​ Entrepreneurs must be risk takers
FROM ENTREPRENEURSHIP TO INTRAPRENEURSHIP

Intrapreneurship and its roots

●​ The power and spirit of entrepreneurs and entrepreneurship are also fell in the context of
established businesses
●​ In 1992, for instance, the american heritage dictionary brought intrapreneurship and
intrapreneur into the mainstream by adding intrapreneur to its dictionary, defining as a
person within a large corporation who takes direct responsibility for turning an idea
into profitable finished product through assertive risk taking and innovation

DIFFERENCE BETWEEN ENTREPRENEURS AND INTRAPRENEURS

●​ The primary difference between the two types of innovators is their context
-​ The intrapreneur acts with the confines of an existing organization
●​ Most organization would dictate that the intrapreneur should ask for permission before
attempting to create a desired future in practice
●​ The intrapreneur is more inclined to act first and then ask for forgiveness later, rather tha
ask for permission before acting
●​ The intrapreneur is also typically the intraorganizational revolutionary challenging the
status quo and fighting to change the system from within
●​ In summary, an intrapreneur is someone who operates like an entrepreneur but has the
backing of an organization

EXAMPLE OF COMPANIES ENCOURAGING INTRAPRENEURSHIP

TECHNOLOGY AND INNOVATION

1.​ Google - famous for its “20% time” policy, allowing employees to spend 20% off their
work hours on personal projects. Products like Gmail, AdSense, and Google News came
from this initiative
2.​ 3M- one of the pioneers of intrapreneurship; it lets employees spend time on side
projects. The post-it note was born this way
3.​ Apple - encourages internal innovation through cross-functional teams. The Macintosh
project itself began as an intrapreneurial effort within Apple
 4.​ Microsoft - operates an internal Garage program that gives employees tools and space to
experiment with new ideas
5.​ Intel - supports “Intel Innovation”, an internal program for employees to pitch and
develop new technologies

Consumer Goods

1.​ Unilever - runs the Unilever Foundry, which supports employee-led startups and
sustainable innovations
2.​ Procter & Gamble (P&G) - encourages employees to co-create and test ideas under its
connect + develop innovation model
3.​ Nestle - has an internal accelerator where employees can form teams and pitch ideas to
develop into new brands or services

KEY TAKEAWAYS

-​ Intrapreneurship is the form of entrepreneurship practiced within existing organizations

-​ The intrapreneur is typically the intraorganizational revolutionary challenging the status
quo and fighting to change the system from within. The entrepreneur is the challenger
from the outside firm
-​ An organization can develop a culture of intrapreneurialism such that it can operate
numbly in an entrepreneurial fashion as the environment changes or that it can act as an
industry disruptor. There are two approaches to intrapreneurship - the coexistence
approach and the structural-separation approach

GLOBAL TALENT MANAGEMENT

Strategic Human Resource Management

• managing a company's people (employees) in a planned and strategic way so that their skills,
behaviors, and performance help the organization achieve its long-term goals.

• SHRM is the process of linking human resource practices with the strategic objectives of the
organization.

• HR is not just about hiring, training, or paying people - it's about using people as a strategic
asset to gain a competitive advantage.
Crucial Role of SHRM in Global Firms

Firms that effectively manage their international HR typically outperform competitors in

terms of

• identifying new international business opportunities,

• adapting to changing conditions worldwide,

• sharing innovation knowledge throughout the firm,

• effectively coordinating subsidiary operations,

• conducting successful cross-border acquisitions,

• maintaining a high-performing, committed overseas workforce.

Key Elements Of SHRM

1.​ Selection and Placement

●​ firms should acquaint prospective new hires with the nature of the jobs they are
expected to fulfill early in the hiring process.
●​ explaining the technical competencies needed (e.g., collecting statistical data) and
defining behavioral competencies such as
-​ customer focus
-​ ability to show empathy and support of customers feelings and point of
view
-​ work-management focus, such as the ability to complete tasks efficiency
or to know when to seek guidance
●​ make the organization's culture clear by discussing the values that underpin the
organization.

2.​ Job Design

●​ refers to the process of combining tasks to form a whole job.
●​ The goal is to design jobs that involve doing a whole, piece of work and that are
challenging but ultimately doable for the employee.
●​ takes into account issues of health and safety of the worker.
 ●​ consider training ensuring that employees to have the knowledge and kills to
perform all parts of their job) and giving them the authority and accountability to
do so

3.​ Compensation and Rewards

●​ evaluating and paying people on the basis of their performance not simply for
showing up to the job.
●​ Firms must offer rewards for skill development and organizational performance,
emphasizing teamwork, collaboration, and responsibility for performance.
●​ Good compensation systems include incentives, gainsharing, profit sharing, and
skill-based pay that rewards employees who learn new skills and put those skills
to work for the organization.
●​ Employees who are trained in problem solving and a broad range of skills are
more likely to grow on the job and feel more satisfaction.

4.​ Diversity Management

●​ In past decades, diversity meant avoiding discrimination against women and
minorities in hiring.
●​ Today, diversity goes far beyond this limited definition;
●​ diversity management involves actively appreciating and using the differing
perspectives and ideas that individuals bring to the workplace.
●​ Diversity is an invaluable contributor to innovation and problem-solving success.
●​ Teams whose members have complementary or contrasting skills are often more
successful because members can see one another's blind spots.

The Global War for Talent

●​ War for talent reflects competition among organizations to attract and retain the most
able employees.
●​ Talent management is anticipating the need for human capital and setting a plan to meet
it.
-​ Human capital refers to the skills, knowledge, experience, and abilities that
people possess - which can be used to create economic value for themselves,
organizations, or society.
 ●​ Talent management goes hand in hand with succession planning,
-​ Succession planning refers to the process of recruiting and are filled developing
employees to ensure

Best Practices in Global Talent Management

1. Align Global Talent Strategy with Business Objectives

●​ The company's global mission, vision, and goals should guide how talent is acquired,
developed, and retained.
●​ Ensure local HR teams understand how their regional actions support the global strategy.
●​ Example: If global expansion is a goal, plan talent pipelines in target markets early.

2. Balance Global Consistency and Local Adaptation

●​ Maintain core global HR standards (e.g., values, leadership competencies).

●​ Allow local flexibility in pay, benefits, and work practices to respect cultural and legal
differences.
●​ Example: Offer flexiie working hours in Europe (common), but family-based benefits in
Asia (highly valued).

3. Build a Global Employer Brand

●​ Present a unified, attractive brand worldwide while adapting messaging to local contexts.
●​ Highlight diversity, growth opportunities, and corporate social responsibility.
●​ Use global social media platforms (LinkedIn, Glassdoor) and local ones (e.g., WeChat,
JobStreet) for recruitment

4. Develop Global Leadership and Mobility Programs

●​ Identify and train global leaders who can operate effectively across cultures.
●​ Offer international assignments or virtual cross-border projects to build global
experience.
●​ Encourage knowledge sharing between HQ and subsidiaries to prevent “talent silos”

5. Foster Cross-Cultural Competence

●​ Train managers and employees in intercultural communication and global collaboration.

●​ Teach cultural intelligence (CQ): awareness, knowledge, and adaptability in multicultural
settings.
 ●​ Example: Western managers may need to understand indirect communication styles
common in Asia.

6. Implement Global Succession Planning

●​ Identify high-potential employees globally - not just at headquarters.

●​ Use consistent evaluation tools to assess leadership potential across regions.
●​ Build regional leadership pipelines to ensure continuity without over-reliance on
expatriates.

7. Leverage Global HR Technology

●​ Use cloud-based HR platforms (like SAP SuccessFactors, Workday, or Oracle HCM) for
consistent data management.
●​ Enable global visibility of talent data while complying with local data privacy laws (e.g.,
GDPR).
●​ Use Al analytics to forecast workforce trends and optimize deployment.

8. Ensure Fair and Competitive Compensation

●​ Design pay structures that are locally competitive yet globally equitable.
●​ Consider cost of living, local labor markets, and currency fluctuations.
●​ Use global job grading systems to maintain fairness across countries.

9. Support Diversity, Equity, and Inclusion (DEI) Globally

●​ Promote DEl as a global priority, but adapt initiatives to local realities.

●​ Encourage cross-cultural collaboration and diverse leadership teams.
●​ Example: Gender diversity programs may differ between Europe and the Middle East due
to local norms.

10. Encourage Employee Engagement and Retention Across Borders

●​ Use global engagement surveys to monitor satisfaction and cultural differences in

motivation.
●​ Offer flexible work arrangements that accommodate global teams and time zones.
●​ Recognize achievements both locally and globally to make employees feel valued.

11. Comply with Local Labor Laws and Ethics

●​ Stay informed on local employment laws, benefits, and tax requirements.

●​ Apply ethical labor standards consistently worldwide.
●​ Partner with local HR experts or legal advisors to avoid compliance risks.
12. Promote a Culture of Global Learning

●​ Provide access to online learning platforms available across all regions.

●​ Create communities of practice and cross-border mentorship programs.
●​ Encourage collaboration and innovation across global teams.

Effective Selection and Placement Strategies

Job-Description Best Practices

-​ List the job requirements in bullet form,

-​ Use common industry terms, which speak to knowledgeable job seekers.
-​ Avoid organization-specific terms and acronyms,
-​ Use meaningful job titles (not the internal job codes of the organization).
-​ Use key words taken from the list of common search terms (to maximize the chance that
a job posting appears on a job seekers search).
-​ Include information about the organization, such as a short summary and links to more
detailed information.
-​ Highlight special intangibles and unusual benefits of the job and workplace (e.g.,
flextime or travel).
-​ Specify the jobs location (and nearest large city) and provide links to local community
pages (to entice job seekers with quality-of-life information).

Tailoring Recruitment to Match Company Culture

●​ Don't just hire for skills or academic background; they ask about the potential employees
philosophy on life or how the candidate likes to spend free time.
●​ These questions help the manager assess whether the cultural fit is right.
●​ A company in which all work is done in teams needs team players, not just A students.
●​ Ask questions such as "Do you have a personal mission statement?"

Tools and Methods: Interviewing and Testing

●​ Testing and interviewing are two time-tested methods used to get that information about
an applicant.
●​ A detailed interview begins by asking the candidate to describe his work history and then
getting as much background on his most recent position Ask about the candidates
responsibilities and major accomplishments.
●​ Then, ask in-depth questions about specific job situations - called situational interviews,
●​ One such question may be What is a major initiative you developed and the steps you
took to get it adopted?
 ●​ Describe a problem you had with someone and how you handled it.
●​ In contrast, future-oriented situation interview questions ask candidates to describe how
they would handle a future hypothetical situation. An example of this kind of question is
Suppose you came up with a faster way to do a task, but your team was reluctant to make
the change. What would you do in that situation?

International Staffing and Placement

●​ In our increasingly global economy, managers need to decide between using expatriates
or hiring locals when staffing international locations.
●​ An expatriate, or expat, is a person who is living in a country other than his or her home
(native) country.
●​ Most expatriates only stay temporarily in the foreign country, planning to return to their
home country.
●​ Some expatriates, however, never return to their country of citizenship.
●​ On the surface, this seems a simple choice between the firm-specific expertise of the
expatriate and the cultural knowledge of the local hire.
●​ In reality, companies often fail to consider the high probability and high cost
●​ of expatriates failing to adapt and perform in their international assignments.

Four predictors of a manager's ability to succeed as an expatriate:

1. Self-orientation.

-​ The expatriate has attributes that strengthen his or her self-esteem, self-confidence, and
mental well-being.

2. Others orientation.

-​ The expatriate has attributes that enhance his or her ability to interact effectively with
host-country nationals (e.., sociability and openness.

3. Perceptual ability.

-​ The expatriate has the ability to understand why people of other countries behave the way
they do.

4. Cultural toughness.

-​ The expatriate has the ability to adjust to a particular posting given the culture of the
assignments country.
Managers may want to staff the position with a local hire when the following factors are
true:

●​ The need to interact with local customers, suppliers, employees, or officials is paramount.
●​ The corporate strategy is focused on multidomestic or market-oriented operations.
●​ Cost is an issue (i.e., expatriates often bring nigh relocation/travel costs).
●​ Immigration rules regarding foreign workers are restrictive.
●​ There are large cultural distances between the host country and candidate expatriates.

Balanced Scorecard

●​ Balanced Scorecard, a tool that helps managers measure what matters to a company.
●​ Developed by Robert Kaplan and David Norton, the Balanced Scorecard helps managers
define the performance categories that relate to the company's strategy.
●​ The managers then translate those categories into metrics and track performance on those
metrics.
●​ Besides traditional financial and quality measures, companies use employee-performance
measures to track their emplayees knowledge, skills, and contributions to the company.
Applying the Balanced Scorecard Method to HRM

●​ Mark Huselid and his colleagues developed the Workforce Scorecard to provide a
framework specific to HRM.
●​ Workforce Scorecard identifies and measures the behaviors, skills, mind-sets, and
results required for the workforce to contribute to the company's success.
●​ The Workforce Scorecard has four key sequential elements:

1. Workforce mind-set and culture. Does the workforce understand the strategy and embrace
it? Does the workforce have the culture needed to support strategy execution?

2. Workforce competencies. Does the workforce, especially in the strategically important or A

positions, have the skills it needs to execute the strategy?

3. Leadership and workforce behaviors. Are the leadership team and workforce consistently
behaving in ways that will lead to the attainment of the companys key strategic objectives?

4. Workforce success. Has the workforce achieved the key strategic objectives for the business?

GLOBAL MARKETING, DISTRIBUTION AND SUPPLY CHAIN MANAGEMENT

The Four Ps

Companies expand internationally to

-​ reach more customers,

-​ gain higher profit opportunities,
-​ balance sales across countries in case one country experiences problems,
-​ compete with other brands that are expanding internationally and with global firms in
their home markets.

Reaching new consumers is often the main reason for international expansion.

What is the best way to reach those international customers?

You begin with the core of marketing knowledge - the four Ps product, price, promotion, and
place - also called the Marketing Mix
Marketing Mix

•1st P - product refers to any physical good or intangible service that's offered for sale

-​ companies create product variations to suit local tastes. For example, Starbucks
introduced a green tea Frappuccino in China.

• 2nd P - price is the amount of money that the consumer pays for the product

-​ Some of the biggest challenges in selling to emerging markets involve making the
product affordable

• 3гd P - promotion refers to all the activities that inform and encourage consumers to buy a
given product

-​ promotions are often customized to a country to appeal to local sensibilities

• 4th P - place refers to the location at which a company offers its products for sale

-​ Products reach consumers through a channel of distribution,

-​ In international business, the number of intermediaries can expand due to the regulations
affecting import and export across national boundaries.

Ethics in Action

Major international marketing ethical problems

●​ Traditional Small Scale Bribery involves the payment of small sums of money,
typically to a foreign official in exchange for him/her violating some official duty or
responsibility or to speed routine government actions (grease payments, kickbacks).
●​ Large Scale Bribery a relatively large payment intended to allow a violation of the law
or designed to influence policy directly or indirectly (e.g., political contribution).
●​ Gifts/Favors/Entertainment includes a range of items such as: lavish physical gifts, call
girls, opportunities for personal travel at the companys expense, gifts received after the
completion of transaction and other extravagant expensive entertainment.
●​ Pricing - unfair differential pricing, questionable invoicing where the buyer requests a
written invoice showing a price other than the actual price paid, pricing to force out local
competition, dumping products at prices well below that in the home country, pricing
practices that are illegal in the home country but legal in host country (e.g., price fixing
agreements).
Market Segmentation

Market segmentation is the process of dividing a larger market into smaller markets that share a
common characteristic. It helps companies target their marketing efforts more effectively.

●​ By demographics, such as segments divided by age groups (e.g., eighteen to twenty-four

year-olds), genders, or household incomes.
●​ By geographic location
●​ By ifesiyle (e.g., new moms of different ages might have more in common with each
other than they have with identically aged nonmothers.)

The purpose of segmentation is to give the company a concrete vision of its customers, so
that it can better understand how to market to that customer.

Market Segmentation

Understanding Your Target Customers

●​ Foreign markets require products suitable to the local population.

●​ Although European and developed country markets are more similar to the United States,
emerging markets like the BRIC countries have important differences.
●​ Products must meet local needs in terms of cost, quality, performance, and fealures and,
in order to be successíul, a company must be aware of the interplay between these
factors. Lets look at consumers in emerging countries to get a feel for these
differences.

Market Segmentation

Rising Middle Class

●​ The number of middle-class people in emerging countries has been growing, partly
because of Western companies hiring low-cost labor (directly or through outsourcing
agreements) in these regions.
●​ Providing jobs in these countries has improved household incomes.

Millionaires Are Everywhere

●​ Just because the average income is much lower in emerging markets doesnt mean that no
one can afford high-end luxury goods.
●​ Some automobile manufacturers, for example, track the number of millionaires in the
country as an indicator of the very affluent segment.
Market Segmentation

Emerging Markets for Business Customers

●​ Business-to-business (B2B) opportunities also abound, as emerging-market businesses

grow to serve export or internal markets.
●​ Businesses in emerging markets are different from developed markets. For example,
-​ companies in emerging markets may be smaller and less sophisticated
-​ and may have lower budgets than their Western counterparts.
-​ may lack the level of automation and information technology that prevails in the
developed world
-​ many developing countries have a predominance of small mom-and-pop stores.

Dealing with Gray and Counterfeit Markets

●​ Gray market - where genuine products are sold through unauthorized channels
●​ gray market exists because of price discrepancies between different markets. Also
known as parallel market.
●​ For example, consumer packaged-goods companies may price their products higher in
Austria than in the neighboring Czech Republic due to the Austrian citizens higher,
income levels.
●​ As a result, Austrians might order their goods from Czech retailers and simply drive over
the border to pick up the products. The goods in the Czech stores are legitimate and
authentic, but the existence of this gray-market activity hurts the producer and their
channel partners (e.g., distributors and retailers) in the higher-priced country.

In contrast to gray markets, which are legitimate but - legally- a gray area, counterfeit markets
purposely deceive the buyer.

For example, counterfeiters slightly alter the Sony logo to Bony in a way that makes it hard to
distinguish without careful inspection.

Global Branding

• A global brand is the brand name of a product that has worldwide recognition - i.e.,
Coca-Cola, IBM, Microsoft, GE, Nokia, McDonalds

• Brand name signals trust - what drives profit margin and share price,
Advantages of creating a global brand

-​ economies of scale in production and packaging,

-​ lower marketing costs.

Disadvantages of a global brand

-​ Limited local relevance

-​ Miss local tastes, culture, or habits
-​ Feel "foreign" or out of touch Risk of weak emotional connection.

Risk of weak emotional connection

●​ Companies may decide to follow a global-brand strategy or multiple brands.

Multiple-Brand Strategy

●​ Using a multibrand strategy is a good choice when a country has a strong, positive
association with a particular brand.
●​ For example, PC maker Acer sells its personal computers under four different brands.
-​ Taiwan-based Acer bought US PC-maker Gateway, and kept the Gateway brand
to use in the United States for midtier PCs.
-​ In Europe, however, Acer uses the Packard Bell brand.
-​ Acer's eMachines brand is for the lower-end consumer who is most iocused on
price,
-​ Whereas the Acer brand is reserved for the highest-quality products aimed at
technophiles.

Global Brand Web Strategy

●​ Companies that are promoting their global brands successfully on the web include
Google, Philips, Ericsson, Hewlett-Packard, and Cisco Systems,
●​ These companies are mindful of the cultural and language differences across countries.
●​ They have created websites in local languages and are using images and content specific
to each country, however, each country website has the saine look and feel of the main
corporate website to preserve the overal! brand.
Planning a Brand Strategy for Emerging Markets

●​ Entering an emerging market with a developed-country brand poses an extra challenge.

●​ Income levels in emerging markets are lower, so companies tend to price their products
as inexpensively as possible.
●​ This low cost strategy may have consequences for the companys brand.
●​ For example, if a company introduces its brand as a premium product despite having a
lower price, how will it introduce and rise?

Branding Issues: How Low Can You Go?

●​ Many emerging markets call for lower-cost goods. But how low can a company go on
quality and performance without damaging the company's brand?
●​ The challenge is to balance maintaining a global reputation for quality while serving local
markets at lower cost points.
●​ One way to resolve the challenge is to offer the product at quality levels that are the best
in that country even though they would be somewhat below developed-country standards.

Centralized vs Decentralized Marketing Decisions

●​ Who has the authority to make marketing decisions?

●​ In a centralized-marketing organizational structure, the home-country headquarters
retains decision-making power.
●​ In a decentralized-marketing organizational structure, the regions are able to make
decisions without headquarters approval.
●​ The advantage of the centralized structure is speed, consistency, and economies of
scale that can save costs /such as through giobal-marketing campaigns).
●​ The disadvantages are that the marketing isnt tied to local knowledge and doesnt reflect
local tastes, so sales arent optimized to appeal to regional differences.

Global Sourcing and Distribution

Global sourcing refers to buying the raw materials or components that go into a company's
products from around the world, not just from the headquarter's country

●​ Sole-source
●​ Multisource
Sole-Sourcing Advantages

●​ Price discounts based on higher volume

●​ Rewards for loyalty during tough times
●​ Exclusivity brings differentiation
●​ Greater influence with a supplier

Sole-Sourcing Disadvantages

●​ Higher risk of disruption

●​ Supplier has more negotiating power on price

Multisourcing Advantages

●​ More flexibility in times of disruption

●​ Negotiating lower rates by pitting one supplier against another

Multisourcing Disadvantages

●​ Quality across suppliers may be less uniform

●​ Less influence with each supplier
●​ Higher coordination and management costs

Distribution Management

Selling internationally means considering how your company will distribute its goods in the
market.

●​ Developed countries have good infrastructure - passable roads that can accommodate
trucks, retailers who display and sell products, and reliable communications infrastructure
and media choices.
●​ Emerging markets often have very fragmented distribution networks, limited logistics,
and much smaller retailer outlets. Most of the middle class lives in cities, Rural logistics
are especially problematic. Narrow dirt roads, weight-limited bridges, and mud during the
rainy season hamper the movement of goods.
Distribution Channel

-​ a pathway or route through which products or services move from the manufacturer or
producer to the end consumer.
-​ involves a series of intermediaries, such as wholesalers, retailers, and distributors, who
help facilitate the flow of goods or services in the supply chain.

Types of Distribution Channel

●​ Physical distribution channel

●​ Trading or Transaction channel
Physical distribution channel

-​ the method and means by which a product or a group of products are physically
transferred, or distributed, from their point of production to the point at which they are
made available to the final customer. In general, this end point is a retail outlet, shop or
factory, but it may also be the customer's house.

Major categories:

-​ INDIRECT distribution channel (with intermediaries)

-​ DIRECT distribution channel (no intermediaries)

For Consumer Products

1.​ Mass media ads

2.​ Trade discounts
3.​ Symposia/conventions
4.​ Promo girls
5.​ Direct Mktg [email, phone calls].
How do you create demand using ATL or BTL promotion?

(Above The Line) Promotion

Definition: Mass media promotion aimed at a large audience.

Purpose:

-​ Bulld brantd awareness

-​ Reach the general pubtie

Media Channels:

-​ Television
-​ Radio
-​ Newspapers
-​ Magazines
 -​ Billboards
-​ Cinema ads

BTL (Below The Line) Promotion

Definition: Direct marketing focused on specific target groups.

Purpose:

-​ Drive immediate action or sales

-​ Engage with specific audiences

Media Channels:

-​ lIn-store promotions
-​ Direct mail
-​ Sponsorships
-​ Events and activations
-​ Email/SMS marketing
-​ Trade shows
-​ Sampling
Supply Chain

-​ A sequence of activities and organizations involved in producing and delivering a good or

service.
Aspects of International Trade

The introduction of a number of international trade agreements and economic unions, such as the
European Union, the North American Free Trade Association (NAFTA) and the Association of
South-East Asian Nations (ASEAN) amongst others, has had a major impact on the globalization
of trade.

-​ many products are produced and distributed across regions and continents, with
significant impact on transport opportunities.
-​ these changes have major influence on the structure of distribution and logistics systems
as trade barriers have broken down and new international transport networks have been
initiated.

It is important to be aware of the basic methods of undertaking business when concerned

with international transport

There are a number of different ways in which goods can be purchased on an international basis.

-​ it is essential that both the buyer and the seller are aware of which term have been agreed,
as they define their responsibilities
-​ these are known as incoterms,
Definition of intermodal transport from the European Conference of Transport Ministers:

-​ The movement of goods in one and the same loading unit or vehicle, which uses
successively several modes of transport without handling of the goods themselves in
changing modes.

Intermodal Equipment

●​ ISO Containers
●​ Swap Body
●​ Road-Railer Trailers
●​ Unaccompanied Trailers

Intermodal Vehicles - Sea

●​ Cellular container ship

●​ Roll-on Roll-off Ferry (RORO)

Intermodal Vehicles - Rail

●​ Rolling motorway
●​ Piggyback and Road-Railer
●​ Double Stacking
●​ Multifret Wagon
●​ Ferrywagon

Intermodal Vehicles - Road

●​ Skeletal trailer
●​ Extendable trailer
●​ 44-tonne vehicles

Intermodal - multiple contracts (one per carrier/ modal transpo)

Multimodal - one contract only for multiple modal transpo

Cash Management

Tax Advantages of Fronting Loans

• A fronting loan is a loan made between a parent company and its subsidiary through a financial
intermediary such as a bank.

• The advantage of using fronting loans as a way to lond money, rather than the parent lending
the money directly to the subsidiary, is that the parent can gain some tax benefits and bypass
local laws that restrict the amount of funds that can be transferred abroad.

• With a fronting loan, the parent deposits the total amount of the loan in the bank.

• The bank then lends the money to the subsidiary. The bank charges the subsidiary a slightly
higher interest rate on the loan than it pays to the parent, thus making a profit.

Understanding the Roles of Finance and Accounting in

Global Competitive Advantage

Cash Management

Transfer Pricing

• Multinational firms that conduct business among their cross-border subsidiaries can use
tax-advantageous transfer pricing.

• transfer price is the price that one subsidiary (or subunit of the company charges another
subsidiary (or subunit) for a product or service supplied to that subsidiary.

• High or low?

Indirect Taxes

• One way that governments respond to budget shortfalls is by imposing or increasing indirect
taxes like the value-added tax

(VAT) and goods-and-services tax (GST).

• When VAT is excessive, it may be cheaper to make the shoes for export (nonVAT) and reimport
them, and pay import duties instead of VAT.