Dynamics of international strategy case studystudents will

Assignment Help International Economics
Reference no: EM13374969

Dynamics of International Strategy Case Study

Students will analyze a case study on the dynamics of international strategy prepared by the instructor. The student will address questions prepared by the instructor based on the particular company and issues raised by the case study.

The Black & Decker Evolution

Black & Decker: The Facts

Known primarily for its power tools, Black & Decker is one of the world's older multinational corporations.The company was founded in Baltimore, Maryland, in 1910, and by the end of the 1920's had become a small multinational company with operations in Canada and Britain.Today the company has two well-known brands, Black & Decker consumer powers tools and its DeWalt brand of professional power tools.It sells its products in over 100 nations, and has revenues in excess of $5 billion, more than half of which are generated outside of the United States.

The company grew rapidly during the 1950's and 196's due to its strong brand name and near monopoly share of the consumer and professional power tools markets.This monopoly was based on Black & Decker's pioneering development of handheld power tools.It was during this period that Black & Decker expanded rapidly in international markets, typically by setting up wholly owned subsidiaries in a nation and giving them the right to develop, manufacture, and market the company's power tools.As a result, by the early 1980's, the company had 23 wholly owned subsidiaries in foreign nations and two joint ventures.

During its period of rapid international expansion, Black & Decker operated with decentralized organization.In its 1979 annual report, the company described how "In order to be effective in the marketplace, Black & Decker follows a decentralized organizational approach.All business functions (marketing, engineering, manufacturing, etc.) are kept as close as possible to the market to be served."In effect, each wholly owned subsidiary was granted considerable autonomy to run it own business.

By the mid 1980's, however, this structure was starting to become untenable.New competitors had emerged in the power tool business, including Bosch, Makita, and Panasonic.As a result, Black & Decker's monopoly position had eroded.Throughout the 1980's, the company pursued a strategy of rationalization.Factories were closed and the company consolidated production in fewer, more efficient production facilities.This process was particularly evident in Europe, where different national operating companies had traditionally had their own production facilities.As the company noted in its 1985 annual report, "Globalization remains a key strategic objective.In 1985, sound progress was made in designing and marketing products for a worldwide market, rather than just regional ones.Focused design centers will ensure a greater number of global products for the future...G lobal purchasing programs have been established, and cost benefits are being realized.

During this period, while the company maintained a number of design centers, it cut the number of basic R & D centers from eight to just two.The autonomy of individual factories also started to decrease.The factories that remained after the round of closures had to compete with each other for the right to produce a product for the world market.Major decisions about where to produce products to serve world markets were now being made by manager at the corporate headquarters.Even so, national subsidiaries still maintained a fair degree of autonomy.For example, if a national subsidiary developed a new product, it was still likely that it would get the mandate to produce that product for the world market.Also, if a national subsidiary performed well, corporate management was likely to leave it alone.

By the 1990's, however, it was clear that this change had not gone far enough.The rise of powerful retailers such as Home Depot and Lowe's in the United States had further pressured prices in the power tools market.Black & Decker responded by looking for ways to garner additional manufacturing efficiencies.During this period, Black & Decker shut down several more factories in its long-established subsidiaries and started to shift production to new facilities that it opened in Mexico and China.As this process proceeded, any remaining autonomy the managers of local factories enjoyed was virtually eliminated.Corporate managers became much more aggressive about allocating products to different factories based on a consideration of operating costs.In effect, Black & Decker's factories now had to compete with each other for the right to make products, and those factories that did not do well in this process were shut down.

In 2001, Black 7 Decker announced yet another restructuring initiative.Among other things, the initiative involved reducing the workforce by 700 people, to 4,500, shutting long-established factories in the United States and Britain, and shifting production to low-cost facilities.By 2004 this process reached a logical conclusion when the company reorganized its power tools business into two separate global divisions-one that was charged with the global development, manufacture, and marketing of Black & Decker power tools, and another that was charged with the same for the company's professional DeWalt brand.At this point, the company operated some 36 manufacturing facilities, 18 outside the United States in Mexico, China, the Czech Republic, Germany, Italy, and Britain.It had seven design centers, and two basic R & D centers, on in the United States and one in Britain.Increasingly, the design and R & D centers in the United States and Britain took on responsibility for new-product development for the global market.Throughout the early 2000's, successively larger shares of production were allocated to factories in just three nations, China, Mexico, and the Czech Republic, and in its 2004 annual report, Black & Decker indicated that this process was likely to continue.

Based on your text readings, class material and class discussions; respond to the following questions:

1. How would you characterize Black & Decker's international expansion during the 1950's and 1960's ? What strategy was the company pursuing? What was the key feature of the international organization structure that Black & Decker operated with at this time? Do you think Black & Decker's strategy and structure make sense, given the competition at that time?

2. How did the competitive environment confronting Black & Decker change during the 1980's and 1990's? What changes did Black & Decker make in its strategy and structure to compete more effectively in this new environment?

3. By the 2000's, what strategy was Black & Decker pursuing in the global marketplace? How would you characterize its structure? Do you think the structure fit the strategy and environment?

4. Why do you think it took nearly two decades for Black & Decker to effect a change in strategy and structure?

Reference no: EM13374969

Questions Cloud

Financing or leasing a new car new dodge ram 2500 4x4 quad : financing or leasing a new car. new dodge ram 2500 4x4 quad cab cash price 48000. suppose that chrysler is also
Part 1 denitionsfor each pair of termsconcepts dene each : part 1 de?nitionsfor each pair of termsconcepts de?ne each termconcept and explain the relationship between them. the
International business entry case studystudents will be : international business entry case studystudents will be assigned a large corporation to research. they will explore the
Question 1 11 explain the effectiveness of the exchange : question 1 1.1 explain the effectiveness of the exchange rate regime being used in terms of achieving macroeconomics
Dynamics of international strategy case studystudents will : dynamics of international strategy case studystudents will analyze a case study on the dynamics of international
Suppose central bank observes directly aggregate demand : suppose central bank observes directly aggregate demand shocks or fully anticipates them. formulate a monetary policy
A tell me why you selected the appropriate exponential : a tell me why you selected the appropriate exponential smoothing method by commenting on your y data
Demand supply and the determination of market price1for a : demand supply and the determination of market price1.for a particular week in june three families - smith jones and
Several factors both internal and external impact a : several factors both internal and external impact a companys stock price and the subsequent perceived valuation of a

Reviews

Write a Review

International Economics Questions & Answers

  What will be the effects of an increase in the money supply

What will be the effects of an increase in the money supply

  Questions based on international business

Questions based on International Business

  calculate the series for nominal gdp

Calculate and Plot using a spreadsheet (like Ms Excel) the series for Nominal GDP

  Burger king beefs up global operations

Burger King Beefs Up Global Operations

  Consider two countries that share the same technology

Consider two Countries that share the same technology, South Africa and the UK, and two goods, Diamonds and Tea

  Find best the governance system of the eu

Which political system describes best the governance system of the EU? Is the governance system of the EU democratic? Why ‘yes', or why ‘not'?

  Review the country political economy

Political Economy and Foreign Direct Investment - Review the country's political economy

  Calculate the value of the intraindustry trade

Calculate the value of the Intraindustry Trade

  Identify the funding mechanism of the project

Identify the funding mechanism of the project, and the sources of funding. Identify the key players or stakeholders of the project. Who is supposed to benefit from the initiative?

  Alternative trade: legacies for the future

explain how  Alternative Trade: Legacies for the Future  supports or challenges your conceptualizations of trade and development. Are there themes that some of you agree upon? Do you disagree on others? Describe your conversation.

  Find the equilibrium interest rate

The consumption function is given by C = 200 + 0.75(Y - T ). The investment function is I = 200 - 25r, r is the real interest rate. Government buy and taxes are both 100.

  Country economic and trade summary reports

Global marketing managers must understand economics and trade rules of countries and regions within which they trade.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd