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Stonehouse et al. (2004)Management > Global Strategic Management > Lectures > Independent Research > Stonehouse et al. > The Drivers
The DriversMarket drivers - Customer needs, which depend on culture, economic development, physical environment. Marketing strategies, whether standardised or adapted Cost drivers - Economies of scale and scope - a firm can become an MNE if the domestic market is not big enough to achieve scale or scope economies. Globalisation will also increase the learning curve, which can help drive costs down, as can sourcing and logistics. Government drivers - Trade policies, such as the liberalisation of world trade. Technical standards, marketing regulations, government-owned competitors, host government concerns (whether they encourage MNEs or not) Competition drivers - Exports and imports, the number and strength of competitors around the world means firms need to become global to compete. Countries are more interdependent in industries, so a firm needs to go global.
PorterYips model can be mapped onto Porter's 5 Forces. The problem with Porter's model is that is assumes all threats are equally important to all competitors in a given industry. It is also criticised for being static. Managers need to manage the five forces in relation to their business, as well as the industry as a whole. The authors recommend a synthesis of the globalisation drivers and the 5 forces. The strengths of the drivers will differ between industries, though globalisation will increase competition in all cases.
Resource-based approach to environmental analysis Global and Transnational strategy Strategies - Generic/Competitive positioning
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