Strategic Management: Competitiveness and Globalisation 7th ASIA Pacific Edition by Dallas Hanson So

goods, but here’s an interesting twist. China is now an exporter of local management
talent. Procter & Gamble exports Chinese management talent; it has been dispatching
more Chinese abroad than it has been importing expatriates to China. GE estimates that
by 2024, China will be the world’s greatest consumer of electricity and will also be the
world’s largest consumer and consumer-finance market. GE is making strategic
decisions today, such as significant investments in China and India, that will enhance its
competitive posture in both countries in the future.
Organisations need to closely monitor the size of the global economy to understand the
competitive landscape. For example, in 2019, the United States, China, Japan, Germany,
the United Kingdom, and India were the world’s largest economies. In the present
decade, how the global economy will be driven by developed and emerging economies
should be analysed. Furthermore, what opportunities and challenges will be faced
should be anticipated by organisations to plan forward, particularly post-COVID. For
1-6 Hanson 7e Instructor’s Manual 
Hanson, Backhouse, Leaney, Hitt, Ireland, Hoskisson, Strategic Management, 7th Edition. © 2022 Cengage
Australia Pty Ltd. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
example, during the coronavirus pandemic, Netflix has grown considerably but it is still
mindful of future challenges.
Teaching Note: The relative competitiveness of nations can be found in the
World Economic Forum’s Global Competitiveness Report, which can be accessed
for free on the internet. It is useful to assemble these data into an overhead or
PowerPoint slide and show it in class. Students find it interesting to see where
their country stands relative to the others listed. Allow enough time for them to
see these numbers and sort out what it all means.
STRATEGIC FOCUS
Starbucks is a new-economy multinational, yet has had failures in key markets
The case demonstrates how Starbucks has attempted to grow its business
internationally using a multinational strategy – that is, it engages in major strategic
actions to enter new international and product markets with a focus on selling coffee
in a cafe-style environment.
The multinational strategy requires that an organisation’s core product offering be
consistent across national boundaries, yet at the same time be mindful of local
cultural preferences in their product and service delivery. For example, despite a
strong tea-drinking culture in Asia, Starbucks is continuously growing in China, by
developing larger stores and catering to tea drinkers. Similarly, it is growing in India
and Vietnam by working with local organisations.
Starbucks’ success in the United States was predicated on its ability to offer café-style
coffee experiences that meet the expectations of the US consumer. However,
Starbucks didn't fit Australians' tastes. In its first seven years in Australia, Starbucks
accumulated $105 million in losses, forcing the company to close 61 locations. It
failed to cater for the well-established coffee-culture in Australia with its premium
price and taste. The case demonstrates how a range of different variables impacted
Starbucks’ ability to achieve the same level of success in Australia and Europe as it
had in its domestic US context.
Teaching Note: This case provides an excellent opportunity for students to
discuss the variables that impacted Starbucks’ success outside of the United
States: the variability in the cafe cultures, the expected quality standards in
different markets, and the role of store location can each be seen to have played
a negative role in Starbucks’ performance in Australia and Europe. This case
poses the question: what additional information should Starbucks’ senior
management have taken into account in their decision to implement a
multinational structure for their organisation?
The march of globalisation
Globalisation is the increasing economic interdependence among countries as reflected
in the flow of goods and services, financial capital and knowledge across country
borders. This is illustrated by the following:
• Financial capital might be obtained in one national market and used to buy raw
Chapter 1: Strategic management and strategic competitiveness 1-7
Hanson, Backhouse, Leaney, Hitt, Ireland, Hoskisson, Strategic Management, 7th Edition. © 2022 Cengage
Australia Pty Ltd. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.