Case Study: Strategic Competency Building

2096 Words9 Pages
Chapter 2: Strategic Competency Building In the introduction we talked about four strategies that EMNC’s used for brand building, each of these strategies require different capabilities and in this chapter we will talk about the capabilities needed by EMNC’s to expand globally. 1: Cost Leaders In this strategy we try lower cost and most firms use innovative ways to this. EMNC’s usually have an advantage of lower cost, that is provided from their home country as it has low labor costs, cheaper raw material etc, so most of the MNC’s usually locate their production faculties in places with lower labor costs and cheaper materials. There are other innovative ways to reduce and we will describe five of them: A: Mixing labor and capital in innovative…show more content…
The difference in risk appetite can said t emerge from two reasons: Usually large EMNC’s would go this process as they high financial assets and the other if the EMNC’s is family based business than their wealth is tied to the firm so they would be more cautious and not take high risks. 2: With what objectives should EMNC’s se acquisitions to internationalize? There are five reasons to go through this process: A: Faster growth and quick returns This process helps companies grow faster than building a new brand, as it will already have a customer base, recognition and supplier contacts etc, while building new brand will take time to do these steps. It also helps in quick returns, while building new brands is long process and will have to take into account a long term approach. B: The strategic role of the acquired brand It helps the firm gain the advantages from the brand such as: • Gaining customers in the local market • Avoid affect of the negative image of home country of the firm • Enabled the firm to build global brand or regional for…show more content…
3: What is the process for selecting the acquisition target? The availability of a well thought out process for selecting the target is needed. The process needs to have: A: Criteria for assessing acquisition targets The criteria for this can be the five objectives for using acquisitions discussed above. Besides these aspects the firms also need identify whether the capabilities and knowledge of the target are as expected or not , is the target for sale and to check if there is any major constraints in the targets country that are not good for the company or not. B: Balancing patience and speed It is important for the firms to have patience and calmness when going through acquisitions to get the right target, instead making mistake by making haste on visualized perfect target without having good look at it data for a time. However, once the target is available the firm needs to be quick on the uptake and respond to the opportunity as it can be lost. C: Specialist acquisition

More about Case Study: Strategic Competency Building

Open Document