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

materials in another.
• Manufacturing equipment bought from another market produces products sold
in a third market.
• Globalisation enhances the available range of opportunities for organisations.
• Organisations incorporate culture dimensions in strategic decisions
• Organisations continuously monitor complex operations as goods, services and
people move across the world
Global competition has increased performance standards in many dimensions,
including quality, cost, productivity, product introduction time and operational
efficiency. Moreover, these standards are not static; they are exacting, requiring
continuous improvement from an organisation and its employees. Thus, companies
must improve their capabilities and individual workers need to sharpen their skills. In
the twenty-first century competitive landscape, only organisations that meet and
perhaps exceed global standards are likely to achieve strategic competitiveness.
Teaching Note: As a result of the new competitive landscape, organisations of all
sizes must re-think how they can achieve strategic competitiveness by positioning
themselves to ask questions from a more global perspective that will enable
them to (at least) meet or exceed global standards:
• Where should value-adding activities be performed?
• Where are the most cost-effective markets for new capital?
• Can products designed in one market be successfully adapted for sale in
others?
• How can we develop cooperative relationships or joint ventures with other
organisations that will enable us to capitalise on international growth
opportunities?
• How can the local cultural dimension guide strategic management processes?
Although globalisation seems an attractive strategy for competing in the current
competitive landscape, there are risks as well. These include such factors as:
• The ‘liability of foreignness’ (i.e. the risks of competing internationally).
• Over-diversification beyond the organisation’s ability to successfully manage
operations in multiple foreign markets.
A point to emphasise: entry into international markets requires proper use of the
strategic management process.
Though global markets are attractive strategic options for some companies, they are not
the only source of strategic competitiveness. In fact, for most companies, even for those
capable of competing successfully in global markets, it is critical to remain committed
to, and strategically competitive in, the domestic market. And domestic markets can be
testing grounds for possibly entering an international market at some point in the
future.
Teaching Note: Indicate that the risks that often accompany internationalisation
and strategies for minimising their impact on organisations are discussed in
1-8 Hanson 7e Instructor’s Manual 
Hanson, Backhouse, Leaney, Hitt, Ireland, Hoskisson, Strategic Management, 7th Edition. © 2022 Cengage
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more detail in Chapter 8.
Teaching Note: As a result of globalisation and the spread of technology,
competition will become more intense. Some principles to consider include the
following:
• Customers will continue to expect high levels of product quality at
competitive prices.
• Global competition will continue to pressure companies to shorten product
development-introduction time frames.
• Strategically competitive companies successfully leverage insights learned
both in domestic and global markets, modifying them as necessary.
• Before a company can hope to achieve any measure of success in global
markets, it must be strategically competitive in its domestic market.
Technology and technological changes
According to the Boston Consultancy Group, organisations must analyse the impact of
technology starting from sourcing of material to customer service. Particularly, there are
three technological trends and conditions that significantly affect today’s organisations
and the nature of competition:
• Increasing rate of technological change and diffusion.
• The information age.
• Increasing knowledge intensity.
Technology diffusion and disruptive technologies
Technology diffusion is the speed at which new technologies become available and are
used. This has increased greatly over the last 20 years. Technology diffusion greatly
impacts organisations and industry competition. For example, Blockbuster had 9000
stores in 2004 to rent videotapes of movies, but filed for bankruptcy in 2010 thanks to