Date post: | 14-Apr-2017 |
Category: |
Business |
Upload: | fotis-maltezos |
View: | 123 times |
Download: | 5 times |
Triad concept
Professor :John MourmourisCourse : International management & strategyPresented by Fotios Maltezos
Democritus University of ThraceDepartment of Economics«MBA : Master in Business Administration»
The main concept
2/16
Kenichi Ohmae :one of the world’s leading business and corporate strategists
Triad Power : The coming of global competition
Explains how MNCs should expand their operations globally
Triad Blocs
3/16
•GDP (1986): 4.59 $t•30.6% world GDP
U.S.A.•GDP (1986): 3.36 $t•22.4% world GDP
E.U.
•GDP (1986) : 2.05 $t
•13.6% world GDP
Japan
The three major economic powers in the modern world
Triad Blocs
4/16
Graph 1: World and Triad GDP (1980-2014)
They represent over the half of the world economyWith very important economic relationships between them through FDI and trade.
Japan
NAFTA : Canada, USA,
Mexico
EU : Germany,
France, Italy, UK
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύπος
Γενικός τύποςGDP (current trillion $)
World Triad
Triad power model
5/16
• Companies which have presence only in one bloc were dangerously vulnerable to competition
• The combined buying force of the Triad makes most of today's high-tech products economically viable (wealth, application of scale-economies)
• Establish a presence in each area of the triad bloc
• The world is one global market and not many individuals because borderlessness is reality
• Managers and business executives to change their thinking of global competition and act fast
Traditional model
6/16
Old fashioned internalization process of MNCs: Producing and selling the same products as the mother company and operating as a clone of the headquarter
Mother company
Small subsidia
ry
Small subsidia
ry
Small subsidia
ry
Small subsidia
ry
Small subsidia
ryExports Exports
Triad power modelWhy a MNC should follow the triad
modelThe growth of capital-intensive
manufacturing
Faster adaptation
of new technology
Overcome obstacles of protectionis
m
7/16
Protectionism
8/16
Protectionism: government actions and policies that restrict international trade, to protect local businesses foreign competition.
Methods of protectionism : tariffs, quotas, subsidies or tax cuts to local businesses.
MNCs access these blocs to obtain a number of benefits including the right to sell their output without having to be burdened by import duties or other restrictions.
Example : When the United States tried to stop the current of Japanese color televisions hitting its shores, Sony, which has a large plant in San Diego, was virtually untouched by quotas and surcharges.
Becoming a triad power
9/16
Ohmae’s Triad Power theory insists on invading various markets simultaneously
To compete effectively in today's global business arena, multinational corporations must become true ''insiders'‘, To achive this are needed investments in all business facilities( R&D, sales, marketing) in the other blocs
Take advantage of the distribution, marketing,
research expertise of another company that already operates in a
chosen foreign market.
Joint Ventures
International
consortia
Evolution of the Triad
10/16
Today businesses forget global competition does not occur just between the triad.The new player is the BRIC countries(Brazil, Russia, India, China)
Graph : GDP of major powers in 2010, 2050
USA
EUJapan
1980s-
1990s USA
EU
BRIC
2015
Case Study: Hitachi
11/16
Fiat(Europ
e)Hitach(Japan)
John Deere
(U.S.A.)
Hitachi Kenki, a maker of construction equipment, has a loose alliance in hydraulic excavators with Deere & Company (1988) in North America and with Fiat Allis (1986) in Europe .
This is a simple example of how Hitachi took advantage of its partners distribution networks
Hitachi- FiatTimeline
1987:Joint venture with the construction machinery division of Fiat (Fiatallis)
1990: Starts the production of backhoes, wheel and crawler loaders.
1990: Fiat-Hitachi acquires the competitor Benati Macchine (2.8 million $)
1991 : Hitachi-Fiat-J.Deere sign a cooperation memorandum
2001: Hitachi decides to stop the collaboration due to creation of its own
network12/16
Hitachi – J. Deere
13/16
Timeline1983: Supply Agreement for
excavators1988: Deere – Hitachi joint venture is
established(production plan at Kernesville).
1998: Started D-H Specialty Products
2011: Established D-H Brazil joint venture
2012: Approved expansion at the USA production plant
Joint venture in :ProductionSalesMarketing
Conclusions
14/16
Large MNCs need broadminded business executives who :• Have analytical skills and manage to drive their corporations to right place to expand its operations because competition is very hard
• Plan for worldwide strong position• View the world like a huge global economy and not a lot of different mini markets.
Bibliography
15/16
1. A perspective on regional and global strategies of multinational enterprises, A. Rugman & A.Verbeke, 2012
2. THE NEXT GLOBAL STAGE, Kenichi Ohmae, 20053. Triad Power: The Coming Shape of Global Competition, Kenichi Ohmae,
19864. Japanese Manufacturing Investment in Europe: Its Impact on the UK
Economy, Roger Strange, 19935. Yellow Steel: The Story of the Earthmoving Equipment Industry, W.
Haycraft, 20026. The Global Logic of Strategic Alliances, Kenichi Ohmae, 19897. The Way to Win in Cross-Border Alliances, Joel Bleeke-David Ernst,19918. http://databank.worldbank.org/9. http://hitachiconstruction.com/
Thank you for your attention!
16