By: Dennis, Chris, Sean, Matt. 100th smallest country in the world Population is around 7,353,985 (growth rate is 1.6% Life expectancy is 81 years.

Chapter 20 IsraelChapter 21 Italy

Chapter 22 Belgium

Chapter 7 Making Global Competitive Moves    

By: Dennis, Chris, Sean, Matt

Israel

100th smallest country in the world

Population is around 7,353,985 (growth rate is 1.6%

Life expectancy is 81 years of age

Jerusalem is the capital city with population of 695,500

Facts about Israel

Land area: 7,849 sq mi; total area: 8,019 sq mi

Geography

Lies on the eastern coast of the Mediterranean.

260 miles in range from north to south and 60 miles from east to west.

Shares borders with Arab nations of Lebanon, Syria, Jordan, and Egypt.

Landscape ranges from mountains to plains with more than 15 distinct geographical regions.

Has fertile green areas and also has vast desert areas.

Geography

http://www.youtube.com/watch?v=LaOnWAF4xsA&feature=related

History of Israel

JULY 1882 Beginning of First Aliyah, BILU pioneers arrive in Palestine

1883 Baron Edmond de Rothschild begins support of Jewish settlement in Palestine; Founding of Hovevei Tzion movement in Odessa

1909Founding of Tel Aviv - the first modern all-Jewish city

1910Founding of Degania - the first Kibbutz

History of Israel

NOVEMBER 1917 British issue Balfour Declaration, recognizing the right to a Jewish homeland in Palestine

DECEMBER 1917 British conquest of Palestine

1936-1939 Arab revolt

MAY 1948Creation of the State of Israel; U.S. and Soviet Union extend recognition; Creation of Israel Defense Forces

History Cont’d

Hebrew word for communal settlement. A unique community or society dedicate to

mutual aid and social justice. Socioeconomic system based on the

principle of joint ownership of property, equality, and cooperation of production, consumption, and education.

The idea that everyone has a specific talent and it is used for the good of all. This is very specific to the Jewish people.

Kibbutz

Kibbutz is like the total overall attitude of the Jewish people. The group is more important than the individual.

Even early settlers in Palestine believed in this socialistic approach to help them settle land and establish their community.

Most all decisions are made by the committees of which the secretary is the highest position in the Kibbutz. Other positions include treasurer and work coordinator are all full-time, while others help on committees in addition to their other jobs.

Kibbutz and lifestyle

Members are assigned to positions for various lengths of time, while routine functions (kitchen and dining hall duty) are performed on rotation.

Each branch of the Kibbutz has an economic coordinator in charge of organizing the work of the different branches and for implementing production and investment plans.

Women are equal participants in the labor force but tend to stay away from more traditional male roles such as agriculture and industry. They stick to education, healthcare, and other services.

Kibbutz and lifestyle

http://www.youtube.com/watch?v=D5aPU7KWqJw&feature=related

Kibutz

Israelis are main nationality

Jews and Arabs major ethnicity followed by Americans and Circassians

Main language spoken is Hebrew and Arabic followed by English and Russian.

Religion and National Facts

Religion Population % of totalJewish 5,569,200 75.5%Muslim 1,240,000 16.8%Unclassified by choice 289,800 3.9%Christian 153,100 2.1%Druze 121,900 1.7%

Religious Facts

Israel is governed by a multi-party parliamentary system. The President of the state of Israel fulfills mainly ceremonial duties and is not a part of the three branches of government.

Current President: Shimon Peres

1. The legislative authority: The Knesset (Israel’s Parliament), includes 120 members elected for a term of four years in nationwide elections.

2. The executive authority: The government headed by the Prime Minister. The Prime Minister is elected in nationwide elections for a period of four years. All recent governments were formed by a coalition of parties. The Ministers that head the government ministries are appointed by the Prime Minister generally from among the ranks of the parties in the coalition.

Prime Minister: Benjamin Netanyahu

3. Judicial branch

Government

Israel plays host to many different religions so business practices are tailored toward those.

First meeting business dress is expected or how you would dress in your home country but after first meeting business casual (polo shirt and nice pants) is preferred.

Know colleagues religious views - dress code differs for business people interacting with religious Israeli colleagues. In this case, business people should dress conservatively. Women should cover their elbows and knees. Men should wear white shirts and dark suits.

Business Etiquette

Know language and if at all possible have a translator to help break that barrier.

Always have an agenda since Israelis have such hectic schedules.

Use sir names to address someone but then quickly move to first names to make the meeting more comfortable.

Also Israelis love to talk and love to talk about you so feel free to speak about yourself to make the atmosphere more comfortable.

Business Etiquette

The official work week is Sunday to Thursday. The Jewish Sabbath starts at sunset on Friday and lasts until sunset on Saturday. Muslims do not work on Friday. Some Christians do not work on Sunday.

Expect to be interrupted. Israelis do not see this as rude. Israelis speak in a straightforward way and sometimes answer questions that were asked of someone else. Please do not be offended by this speech pattern.

Other helpful tips

Provide engraved business cards. They will impress your Israeli colleagues. Please thoroughly read any business cards that you receive before putting them away. Go that extra mile and impress your Israeli colleagues by providing them with a Hebrew translation of all your pertinent documents.

Please print business materials in English. This is the official language used in Israeli business interactions.

Other helpful tips

Meeting protocol varies depending on the religion of your colleagues. If your colleagues practice Orthodox Judaism, women should refrain from any physical contact with males.

Please do not schedule meetings in September or October. Many Jewish holidays occur in these months. Also please be aware that business hours are shortened for Muslims in the month of Ramadan. During Ramadan, Muslims fast during daylight hours.

Please do not bring up the Arab-Israeli conflict or the Holocaust when speaking with Israeli colleagues.

To avoid embarrassment, please be aware that many Israelis keep kosher. Learn proper kosher practices. You will not be served meat and dairy during the same meal, nor will you be served pork or shellfish.

Other helpful tips

Israel ChileGDP 235 billion 249 billion

GDP 32,298 (27th) 14,412 (30th)per capita

Industries high technology copper, fishproducts (aviation), processing,communications, computer steel, aided design, manufacturing, iron, wood,medical electronics, wood, cement,tobacco textiles

Israel vs Chile

Israel Chile

Exports machinery, copper, fruit,equipment, fish products,cut diamonds, chemicals,agricultural products, electrical equip.,textiles, apparels paper, pulp,

wineImports raw materials, petroleum,

military equipment, chemicals,rough diamonds, fuels electrical equip.,consumer goods telecom. equip.,

vehicles

Israel vs Chile

Economic growth rate is around .20% per year for Israel and 1.70 per year for Chile

Unemployment rate is 7.60% for Israel and 9.60% for Chile

Other comparisons

Italy

Map

301,225 sq. km. about the size of Georgia and Florida combined

Population about 60.6 million 5th highest population density in Europe (200 per

square kilometer) Growth rate 0.04% GDP 1.63 Trillion … Euro = 1.33 US dollars Natural resources: fish and natural gas

Facts

16 year compulsory education Literacy rate of 98% Life Expectancy Men 79.1 yrs Women 84.3 yrs

Facts

25 million Services – 67% Industry and commerce – 29% Agriculture – 4% Unemployment rate is 8.5%.

Work Force

Roman Catholic (majority)

Religion

Poetry, Painting, sculpture, and architecture da Vinci Raphael Fra Angelico Michelangelo.

Renaissance 14th & 15th

WWI renounced its alliance with Germany and Austria Hungry

1922 Mussolini

1940’s

20th century Italy

Italy has been a democratic republic since June 2, 1946, when the monarchy was abolished

The constitution came into force on January 1, 1948.

Giorgio Napolitano

Government

Began around the 1600’s

Monteverdi, Handel, Gluck, Mozart, Rossini, Bellini, Donizetti, Verdi and Puccini

http://www.youtube.com/watch?v=c7O91GDWGPU

Opera

Musical term originally applied to the instrumental introduction to an opera

Typically 5 minutes long

Somber, cheerful, reflective …

Quick, moderate, or slow

The Overture

North a little less

South more involved (3rd times the charm)

Overture

Animated and Expressive

The crowds opinion

Appearance

Embellishing

Pageantry and Spectacle

The finesse that Italians use to deal with situations delicately without offence. Turning life into a work of art.

La bella figura “confident, knowing, capable face to the world”

Garbo

Wear good cloths, have a nice car, dine at expensive restaurants

“all citizens are invested with equal social dignity”

Civilta (norms include, style of dress, manners, and participation in local community)

Respect

Appearance

Their language is the most beautiful in the world

Bel canto

Loud!

Simultaneously

Voice

Hands do talk in Italy!

Natural and instinctive movement the can be understood

Small lies can be justified to give pleasure, provoke emotion, or prove a point.

Speech & Gestures

Feelings a emotions need to be expressed

How do you feel?

Piazza

No privacy

Externalization

Piazza San Pietro

257 inhabitants per café and restaurants in Italy

451 Britain 558 Germany 778 Spain 795 France

Close and emotional

Pamper the children

Important for handling problems

Business and family

Father and Mother

Family Ties

The Italian economy has changed dramatically since the end of World War II.

From an agriculturally based economy, it has developed into an industrial state ranked as the world's eighth-largest market economy.

Global market

Business & Economics

Italy continues to deal with budget deficits and high public debt.

Italy's economic growth averaged only 0.8% in the period 2001-2008

$363 billion in underground economy transactions 18% GDP per year

Business

Clear, Exact and polished

Italians expect good faith bargaining

Foreign businessmen/women should be punctual for business appointments, although the Italian executive may not be.

Handshakes are common for both sexes, and may include grasping the arm with the other hand.

Do not expect quick decisions or actions to take place

Business Negotiations

Italian companies often have a rigid hierarchy

It is common for everyone to speak simultaneously at Italian gatherings. This applies to business meetings as well as social events.

Do not exchange business cards at social occasions

When entering a business function, the most senior or eldest person present should always be given special treatment.

Fashions and fashion design are trademarks of Italy. Therefore, in the business world, good clothes are a signature of success.

Men should wear fashionable, high quality suits.

Shirts may be colored or pin-striped, and they should be paired with an Italian designer tie.

Women dress in quiet, expensive elegance.

Quality accessories such as shoes and leather goods will make a good impression with the Italians.

Dress

Comparison

Chile Italy

Republic 756,945 sq. km Population 17 million GDP 250.9 billion Class Structure

Republic 301,225 sq. km Population 66.6 million GDP 1.63 Trillion Loose Class structure

Business Etiquette

Chile Italy

First meeting build relation ships

Schedule not very Structured

Interruptions are common

North more straight to the point, South need to build a relationship

Never be Late Everyone talks at the

same time

The Belgians

Geography

Geography Cont, Area: 32,547 square kilometers (12,566 sq.

mi.), about the size of Maryland. Cities: Capital--Brussels (pop. 1,089,538).

Other cities--Antwerp (483,505); Ghent (243,336); Charleroi (202,598); Liege (192, 504); Bruges (116,741); and Namur (108,950).

Economy GDP (purchasing power parity, 2011 est.): €352 billion (approx. $467 billion). Annual real growth rate (2011 est.): 2.5%. Per capita income (PPP, 2010 est.): €35,238 (approx. $48,535). Natural resource: Coal. Agriculture: (1% of GDP) Products--livestock, including dairy cattle, grain,

sugarbeets, milk, tobacco, potatoes, and other fruits and vegetables. Industry: (24.3% of GDP) Types--engineering and metal products, motor

vehicle assembly, transportation equipment, scientific instruments, processed food and beverages, chemicals, basic metals, textiles, glass, petroleum.

Trade: Exports (2011 est.)--$263.7 billion: transportation equipment, diamonds, metals and metal products, foodstuffs, chemicals. Export partners--Germany 19.6%, France 17.7%, Netherlands 11.8%, U.K. 7.2%, U.S. 5.4%, Italy 4.7%. Imports (2010 est.)--$261 billion: machinery and equipment, chemicals, diamonds, foodstuffs, pharmaceuticals, transportation equipment, oil products. Import partners (2010 est.)--Netherlands 17.9%, Germany 17.1%, France 11.7%, Ireland 6.3%, U.S. 5.7%, U.K. 5.1%, China 4.1%.

Economic Info Population (July 2011): 10,431,477. Annual population growth rate (2011): -0.04%. Density: 830.1 per sq. mi. Religions: Predominantly Roman Catholic, with

Protestant, Jewish, Muslim, Anglican, Greek and Russian Orthodox, as well as secularism, "recognized" religions receiving government subsidies.

Languages: Dutch, French, German. Linguistic regions--(Dutch-speaking) Flanders 57.7%; (French-speaking) Wallonia 31.6%; (legally bilingual) Brussels Capital Region 10%; German-speaking 0.7%.

Education: Literacy--99%.

Government Parliamentary democracy under a constitutional monarch. Independence: 1830. Constitution: 1994 (revised). Branches: Executive--King (head of state), Prime Minister

(head of government), Council of Ministers (cabinet). Legislative--bicameral parliament (Senate and House of Representatives).

Major political parties: Christian Democratic, Liberal, Socialist, Green, Flemish nationalists (New Flemish Alliance), Flemish far right (Vlaams Belang).

Suffrage: Over 18, compulsory. Political subdivisions: Ten provinces, three regions, three

communities, 589 municipalities.

History http://www.youtube.com/watch?v=Rk7nFR9

oBus

Traveling there

http://www.youtube.com/watch?v=Sxb2BPsSTws&feature=related

People

Flemish

Flemish lion a symbol of resistance to French domination for hundreds of years.

Consider themselves to be a nation.

Dutch Ancestry

Wallonians

Failed attempts at a unified government

Wallonians consider themselves Belgian.

Rooster symbol for the Wallonian flag

French Ancestry

People

Conflict http://www.youtube.com/watch?v=LSNnpD6

pRx0&feature=related

People

People Right to privacy

and own opinions held sacred.

Very reserved

Homes are kept under lock and key.

People Belgians tend to be

very individualistic. Family meals

highly cherished.

People Number of Explicit

rules Formal titles are used

in many business and social settings

Monsier or Mijneer for a man

Madame or Mevrow for married woman

Mademoiselle or Jevrow for single woman

People

With Flemish, use Mr. Ms. Miss, or Mrs. in the preferred form.

Freedom of religion and thought is recognized by the Belgian Constitution. The vast majority of the Belgian population profess to be Roman Catholics. In Brussels, most other Religions are present.

Education Schooling is compulsory in

Belgium between the ages of 6 and 18. However, from the age of 15, it is possible to combine school attendance with part-time work. The education system in Belgium is broadly organized as follows:

Primary education, lasting six years (between the ages of 6 and 12), provided at a primary school

Secondary education, also lasting six years (from 12 to 18); a distinction is made between technical and more general secondary education

Higher (university) or further education, lasting from two to seven years, depending on the course of study

Business Climate

Business Climate With a rise in the

life expectancy, 40% of the population is now actively working

Standard of living one of the highest in Europe

The standard maximum working week is 38 hours, with a maximum of 8 hours per day.

A 15-minute break must be given for every 6 hours of work

Business Climate Belgium’s

workforce is characterized by its labor ethics, motivation, staff loyalty and high quality at both blue and white collar levels

Business Climate

Business Climate Subordinates refer to

managers using formal titles and Last Names

Wealth to be shared, not flaunted

Tend to be more cooperative in nature.

No time limit for eligibility for unemployment

Social right for every person to have a certain standard of living

One of the Highest Tax Rates in Western Europe (Social Programs)

Business Climate Handshakes are

the norm unless the two parties are good friends.

Shake Hands with Everyone.

Gifts should be given with every meeting

Business Climate Almost all social

gatherings are formal.

Wait until everyone is served, then eat/drink.

Always call before visiting.

(The professor light test) Green, Yellow, Red

Politics

Politics The monarchy and Brussels are untouchable European unification and the EU are to be

advocated without any reservation. The authority of NATO and the American

ally may be the subject of frequent criticism Prosperity is to be shared and not to be

used as justification for confrontation or class struggle

Privacy and personal liberty are not to be impeded in serious ways.

Politics Recognize their place in the EU as one of

the key players Emphasize the role of coordinator and

peacemaker worldwide

Chapter 7 Making Global

Competitive Moves in Belgium

Targeting of Global Competitors Actual and

potential global competitors need to be identified

Worldwide competitive strategy should be developed for each one

Key choices include (Attack, Avoiding Direct Competition, Cooperate, and Acquire).

Attack Must determine

what specifically to attack in a competitor

Simultaneous attack can overwhelm both you and competitor

Must make competitor accumulate loss-of-position

Battle Map

Avoiding Direct Competition Must depend on long term sustainability

conditions that allow protection from global competition.

Must predict what the other competition is doing with their resources

Cooperating with Competitors Joint ventures Can possibly limit growth potential Good for tackling a market that is not well

known.

Acquiring Competitors Most effective means of elimination the

competition Fills out geographical coverage Pay a premium for companies that

strengthens their position in key countries, improve geographical balance, or strengthens other aspects of global strategy

Chile vs. Belgium

Chile

Population:17.2 million

GDP (PPP):$257.9 billion5.3% growth3.3% 5-year compound

annual growth$15,002 per capita

Belgium

Population: 10.4 million

GDP (PPP):$ 467 billion2.5% growth rate

Per capita income (PPP, 2010 est.): €35,238 (approx. $48,535).

Chile vs. Belgium

Chile

Capital: SantiagoArea: 302,778 square miles (756,945 sq km)Bordering Countries: Peru and Bolivia to the north and Argentina to the eastCoastline: 3,998 miles (6,435 km)Highest Point: Nevado Ojos del Salado at 22,572 feet (6,880 m)

Belgium

Area: 32,547 square kilometers (12,566 sq. mi.), about the size of Maryland.

Cities: Capital--Brussels (pop. 1,089,538). Other cities--Antwerp (483,505); Ghent (243,336); Charleroi (202,598); Liege (192, 504); Bruges (116,741); and Namur (108,950).

Chile vs. Belgium

Chile

Very agriculturally based country

Chile is the home of two Nobel Prize winning poets, Gabriela Mistral(1945), and Pablo Neruda(1971).

Main religion is Roman-Catholic

Belgium

Country based heavily in coal

Home to two famous characters Pierot and Tin-Tin

Main Religion is Roman-Catholic

Chapter 7 – Making Global Competitive Moves

Yip and Hult

The fifth of the global strategy levers that a company can use to globalize strategy.

1) Building Global Market Participation2) Designing Global Products and Services3) Locating Global Activities4) Creating Global Marketing5) Making Global Competitive Moves

Often the most forgotten, but certainly one of the most important

So what does it mean to make global competitive moves? It means integrating competitive moves

across countries or regions rather than making moves one country or region at a time.

Definition Matching Match the following key features with their

proper definition◦ Cross-area subsidization◦ Use of counterparries in countries◦ Globally coordinated sequence of moves◦ Targeting of actual and potential global

competitors◦ Developing plans for each competitor◦ Preemptive use of global strategy

The plan for the rest of the class Short lecture 6 key features

◦ We will do #1 (subsidization) as an example◦ Group 1 – counterparries◦ Group 1 – sequence of moves◦ Group 2 – targeting competitors◦ Group 4 – plans for each competitor◦ Preemptive use of global strategy

Your Expectations You will have a handout of the slides 10 minutes to collaborate 5 minutes to present

◦ Key feature◦ Definition◦ Your company / country

How to apply this feature Struggling? Use other examples!!!

Cross-area subsidization within the same business

Using profits from one country or region in which a business participates to subsidize competitive actions in another country or region

This is perhaps the key requirement of a global strategy

Your other lever advantages cannot be fully utilized unless you’re willing to do this and paramount to all global strategies is your ability

to constantly evaluate and make changes as neededIt’s a long-term portfolio strategy that needs short-

term modifications to perform best

Use of counterparries in countries or regions

Defending against a competitive attack in one country or region by countering in another country or region

Such a move needs to be used where it will hurt your competitor the most

Quite often in the home country of eachThe Cola Wars

A company needs a large enough presence in key countries and regions to be able to make a counterparry effective

Globally coordinated sequence of moves

Simultaneous or planned sequence in which competitive moves are made in different countries or regions in the same business

Globally integrated competitive strategy requires that competitive moves be coordinated across countries or regions in their timingNot necessarily at the same time Makes the best use of resourcesAllows you to be better prepared for a counterattack

Gives the company leverage and EXPERIENCE Also adds to the company’s knowledge economy

Targeting of actual and potential global competitors

Identifying actual and potential global competitors and selecting an overall posture—attack, avoidance, cooperation, or acquisition—for each

Targeting one competitor in many countries vs. targeting several competitors in a few countries

A multilocal approach to competitive strategy usually results in targeting several competitors – so select your targets based on a global viewRemember Chapter 3???

Four Options1) Attack

Global instead of local plan Sequential coordination -> not simultaneous

2) Avoid direct competition Simplest way is retreating into multilocal protected niches A globally coordinated approach to avoiding competition may hold

better hope of sustainability

3) Cooperate Via international joint ventures and alliances Can provide defenses and capabilities - but can also hinder

opportunities Hard enough as a wholly owned – but external partners?

4) Acquire The most effective means of eliminating competition. Added benefit of filling out geographic coverage. As you make acquisitions, be sure to identify and acquire with a

globally competitive mindset. Don’t look at what it can only do in the context of the specific country, but

rather how it strengthens your total global competitive advantage

Developing plans for each competitor

Analyze Strengths, Weaknesses, Opportunities, and Threats for each global competitor in each major country or region Then develop a competitive plan of action for each country/region-

competitor combination

A more specific plan than just your individual global competitors

Start with a SWOT analysis Then decide what to do

Attack Defend Avoid direct competition Stay out Preempt Cooperate Acquire

Preemptive use of global strategy

Being the first competitor to make use of a particular element of global strategy—global market participation, global products, global activity location, and global marketing

First to reach global market participation gets the advantage – and the benefit of scale

First to introduce a globally standardized product gets the advantage of setting industry standards and customer expectations and preferences

For activity location, the first to get there reaps early cost and quality advantages that may be difficult for others to match

First to global marketing can build image and preference leads that are difficult to dislodge

Now let’s make it relevantGroup 1 – counterparries

Group 1 – sequence of moves

Group 2 – targeting competitors

Group 4 – plans for each competitor

Cross-Area Subsidization Using profits from one country or region in

which a business participates to subsidize competitive actions in another country or region

Advantage cannot be exploited unless global resources can be selectively focused on points of competitive pressure or opportunity.

Constantly reevaluate – must remain flexible

Luxottica

European and North American markets strong

South American markets burgeoning Take excess cash from your “cash-cows”

◦ Move it to jumpstart your “wildcats”

with cross area subsidizations…. Revaluate in an ongoing manner – be

flexible and ready to make changes!!! But be careful! There are potential

demotivating factors of openly acknowledging your “dogs” and “cash cows” and “stars”

Your turn!!Group 1 – counterparries

Group 1 – sequence of moves

Group 2 – targeting competitors

Group 4 – plans for each competitor

Preemptive use of global strategy

Being the first competitor to make use of a particular element of global strategy—global market participation, global products, global activity location, and global marketing

First to reach global market participation McDonald’s

First to introduce a globally standardized productHilton is an excellent example of this

Activity locationCitibank & Banamex

First to global marketingCoca-Cola

Guidelines for making global competitive moves Require coordination and agreement among

country and/or regional managers. In some cases it also requires country and/or region

sacrifices for the sake of the worldwide business. Not making global competitive moves can be

particularly damaging in the long term for a business’s worldwide competitive position.

It is critical for senior management to design and implement a system to both recognize the need for globally integrated competitive moves and achieve cooperation among different countries and regions