דברי פתיחה יגב בן יצחק

Shuki Katz is very experienced in the area of change, M&As and transformation ofbanking and financial systems. Mr. Katz was the Director of Organization and Systemsin Bank Hapoalim. During his tenure in Bank Hapoalim, Mr. Katz lead major changessuch as the transition from product lines to customer groups, establishing the privatebanking sector, commercial banking, online banking, direct banking, central callcenter, growing through activities abroad and many other strategic changes. Mr. Katzalso acquired practical experience with other companies such as Master-card,Continental Bank, Israeli- American Bank and others. Shuki was very involved in theacquisition of the Israeli – American Bank by Bank Hapoalim and the merger of bothbanks’ operations. Mr. Katz was also instrumental in growing Bank Hapoalim’s activityand sales in the US by helping its branches grow new initiatives and business linesand building an adequate corporate culture, strategy and structure.

Our People (Core team)Globalization Opportunities & Challenges

Presented by: Yagev Ben Itzhak

אסטרטגיה ממוקדת יישום

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A Global Company ?

Going Global does not mean just

doing business abroad.

In a true Global Company there is

harmony between different

cultures.

Resources, knowledge and

materials are moved seamlessly

across different countries so that

the company enjoys maximum

competitive advantage.

Rule # 2

“And the small shall act big . . . One way small

companies flourish in the flat world is by

learning to act really big. And the key to being

small and acting big is being quick to take

advantage of all the new tools for collaboration

to reach farther, faster, wider, and deeper.”

Thomas Friedman, Author

“The World is Flat”

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Rule # 3

“And the big shall act small . . .

One way that big companies learn to flourish in

the flat world is by learning how to act really small

by enabling their customers to act really big.”

Thomas Friedman, Author

“The World is Flat”

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Why go Global?

Small local market

Benefits of Foreign Trade to accelerate

growth

Revolution in Global Communications

Fast and Efficient Transportation

Opening of Previously Closed Markets

The field has been redefined

Bank of Israel – Research Department

We find that the productivity of exporting firms in Israel is

higher than that of non-exporters.

The export premium is higher before firms enter the export

market, an indicator of a self-selection effect.

We also find an additional premium for firms after they

have entered the export market, which is suggestive of a

learning by exporting effect. We found a significant positive

learning effect.

Growth in the productivity of exporting firms is

approximately 12 percent 5 years after they enter the export

market.

Means to go Global

Exports to foreign Countries

Strategic Alliances

Licensing

Franchising

Contract Manufacturing

Joint Ventures

Wholly Owned Subsidiaries

M&As

Components of effective Global Organizations

Global Strategy

Global Structure

Global Leadership

Global Culture

Resources, knowledge and materials are moved seamlessly across different countries so that the company enjoys maximum competitive advantage.

Global Products & Multi–Local Products

People all over have similar needs

Some products have Global demand Industrial products:

Steel, Chemicals etc.

Semiconductors, Internet services, Software

Global products are usually impersonal products.

People in different cultures have different styles, tastes, language, culture

Government Regulations force Local Modifications

Economic Differences

Global Competitive Analysis

The Fundamental aim of business Strategy is to create and sustain competitive advantages

First Step is to conduct competitive analysis. Country Specific Advantages Firm Specific Advantages (F.S.A.) Value Chain Analysis

Best way to leverage these advantages in Foreign Markets & gain advantage over Local Firms

Dealing with Global and Local Competitors

National Competitive Advantage

A country might provide an absolute

advantage by the virtue of having certain

resources

Homeland Security, Agriculture,

Communication,

High Technology in USA, Israel

Comparative Advantage :

When one country is better in producing a

certain type of product

Coffee in Brazil

Software in India, Medical tourism in India

Heart Bypass

U.S.: $130,000

Singapore: $18,500

Thailand: $11,000

India: $10,000

Photo: East Shore Hospital, Singapore

Data: Business Week,

The East Shore Hospital is an International

Member of Blue Cross, Blue Shield of

South Carolina..

Heart Valve Replacement

U.S.: $160,000

Singapore: $12,500

Thailand: $10,000

India: $9,000

Photo: Apollo Hospital, Chennai. India

Data: Business Week, The Apollo Hospital is an International

Member of Blue Cross, Blue Shield of

South Carolina..

Angioplasty

U.S.: $57,000

Singapore: $13,000

Thailand: $13,000

India: $11,000

Photo: Bumrungard International Hospital , Bangkok

Data: Business Week, 35,000 Americans traveled to Bangkok in 2007

for this treatment

Hip Replacement

U.S.: $43,000

Singapore: $12,000

Thailand: $12,000

India: $9,000

Photo: Gleneagles, Singapore

Data: Business Week,

US Private equity firm, TPG has taken a controlling

interest in the Parkway Group that owns the hospital.

Hysterectomy

U.S.: $20,000

Singapore: $6,000

Thailand: $4,500

India: $3,000

Photo: a subsidiary of Wockhardt in Mumbai, India

Data: Business Week,

Active discussions with US insurers

Knee Replacement

U.S.: $40,000

Singapore: $13,000

Thailand: $10,000

India: $8,500

Photo: St. Luke’s Hospital in Manila

Data: Business Week,

Early stage infrastructure; not yet world-class..

Spinal Fusion

U.S.: $62,000

Singapore: $9,000

Thailand: $7,000

India: $5,500

Photo: Tiantan Puhua Hospital, Beijing, China

Data: Business Week,

Experimental stem cell treatments, not available

in the USA..

Firm Specific Advantages (F.S.A.)

Firms develop competitive advantages which is unique to them

E.g: Patents, Distribution Network, Manufacturing techniques, Access to Raw materials etc

Knowledge Based F.S.A. : Soft skills such as marketing, brand management etc. Skills reside in employees and experience of the Firms

Resource Based FSA: Resources such as products, technology, know-how & Services

Firms have to build both Knowledge based & Resource based advantages

Taking F.S.A. Abroad

FSA cannot always be transferred abroad.

The degree of transferability depends on FSA

itself

Intangible “skills” are toughest to transfer

FSA tied at home country are not always

transferrable.

Initial Thoughts

Going global will stretch and mold company resources into a globally effective organization.

Global Managers will have to select the right entry strategies, decide on trade-offs between localization or global standardization to achieve the optimal local responsiveness and global economies of scale.

Going global is not only about selling abroad. It’s about a global strategy, global structure, global leadership and global culture.