topic 2-lesson 6 2015

Presentacin de PowerPoint

Facultad de Negocios.Carrera de Administracin y Negocios Internacionales.

MULTINATIONAL MANAGEMENTMSc Alberto del Couz1


Road-Trip-Map2


Corporate Strategy and National Competitiveness

Seattle- USA3


Lesson 5: ContentsIntroduction.The single diamondIntegration and responsivenessThe relevance of PPPs on national development

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Lesson 5: ContentsIntroductionThe single diamondThe double diamondThe relevance of PPPs on national development

Ver video A quick introduction to Public-Private Partnership

https://www.youtube.com/watch?v=KWfqaZrLqhI5


Specific Objectives of this topicExamine the determinants and external variables in Porters diamond model of national competitiveness and critique and evaluate the model.Define the terms economic integration and national responsiveness and relate their importante to MNE strategies throughout the world.Present and define the concept of Private Public Partnertship (PPP) and the importance for national competitiveness.

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IntroductionThis lesson will review the single diamond of Porter applying it to the largest economies in the world.A second framework outlined in this lesson is the economic integration and national responsiveness matrix.Some MNEs rely on their home market to generate the research, development, design or manufacturing needed to sell their goods in international markets but more and more they are finding that they must focus on the markets where they are doing business.Many small countries realice that they must rely on export strategies to ensure the growth of their economies.At the same time, not only exportation helps the economy, some partnership such as PPPs helps it to grow.7



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The Single DiamondGovernmentStructure of firms and rivalryDemand conditionsRelated and supporting industriesFactor conditionsChanceEl modelo de Porter est basado en cuatro determinantes especficos del pas y dos variables externas. Estos determinantes incluyen:

Condicin de los factores: esto incluye a)la cantidad, habilidades y costo del personal, b)la abundancia, calidad, accesibilidad y costo de los recursos fsicos de la nacin como por ejemplo agua, depsitos minerales, fuentes elctricas c) las fuentes de conocimiento adquirido ya sea cientifico, tcnica as como de mercado que afectan a la cantidad y calidad de los bienes y servicios; d) la cantidad y costo de las fuentes de capital que estn disponibles en la industria financiera y e) el tipo, calidad y costo de uso de la infraestructura, includo el sistema de transporte, el sistema de comunicaciones, el sistema de salud y otros factores que afectan directamtne la calidad de vida en el pas.Condiciones de la demanda: esto incluye a) la composicin de la demanda en el mercado interno como reflejo de los varios nichos de mercado, la sofisticacin del consumidor y como de satisfechas estn las necesidades del comprador en el mercado local precede el comportamiento de los clientes en otros mercados; b) el tamao y tasa de crecimiento de la demanda local; c) las formas en que la demanda local se internacionaliza e impulsa los productos y servicios en el extranjero.Industrias relacionadas y de apoyo: lo que incluye a)la presencia de proveedores internacionales que crean ventajas competitivas en las empresas que se encuentran en niveles inferiores de la cadena a travs de facilitar el acceso a inputs de manera ms rpida, barata y efectiva; y b) las empresas internacionalmente relacionadas,que pueden coordinar y compartir actividades en la cadena de valor cuando compiten o simplemente aquellas que involucran productos complementarios.Estrategia, estructura y rivalidad: incluye a) las formas en que las empresas son dirigidas y como eligen competir; b) los objetivos que las empresas buscan conseguir as como la motivacin de sus empleados y gerentes; y c) la rivalidad o competencia domestica y la creacin y persistencia de ventajas competitivas en la industria.

Los cuatro determinantes de la ventaja nacional conforman el entorno competitivo de las industrias. En cualquier caso, las otras dos variables, CHANCE y GOVERNMENT tambin juegan roles importantes:El papel de la oportunidad: las situaciones de oportunidad pueden anular las ventajas en una competicin y variar completamente la posicin competitiva debido a ciertos cambios como por ejemplo: nuevos inventos o desarrollos, decisiones polticas de gobiernos extranjeros, guerras, cambios significativos en los mercados y ambiente financiero mundial o regional o cambios tecnolgicos significativos.El papel del gobierno puede influenciar a los anteriores factores con alguna de las siguientes acciones: subusidios, polticas de educacin, regulacin o deregulacin del mercado de capitales, el establecimiento de estandares a los productos locales as como regulaciones extra, la compra de productos o servicios, leyes impositivas y/o regulacin anti-trust.9


The Single DiamondCritique and Evaluation of the Model 1st- The model was constructed based on statistical analysis of aggregate data on export shares for 10 countries.2nd- The government is of critical importance in influencing a home nations competitive advantage.3rd- Although chance is a critical influencing factor in international business strategy, it is extremely dificult to predict and guard against.4th- The Porter model must be applied in terms of company specific considerations and not in terms of national advantages.5th- Porter delineates four distinct stages of national competitive development were nations moves from one to another rather than span.6th- Porter contends that only outward FDI is valuable in creating competitive advantage and inbound foreign investments is never the solution to a nations competitive problems.7th-Relience in natural resources is viewed by Porter as insuficient to create worldwide competitive stature.8th- The Porter model does not adequately address the role of MNEs.

Estos 10 paises (Dinamarca, Italia, Japn, Singapur, Korea del Sur, Suecia, Suiza, UK, USA y Alemania Occidental) de los cuales uno ya no existe, o bien formaban parte de la trada EU- USA-Japon o de un pas industrializado. Dado que lno todos los pases del mundo tienen la misma fortaleza economica a los estudiados por Porter, es bastante improbable que este modelo sea aplicable sin modificacin.Por ejemplo el gobierno puede usar tasas como una barrera directa de entrada a los productos extranjeros o bien pueden aplicar subsidios con el objetivo de penalizar a las empresas forneas. Obviamente estas acciones pueden crear daos a la propia economa local.De una manera similar, los cambios tecnolgicos en computadoras as como en tecnologa de consumo han acontecido tan rpido ni los lderes del mercado, en muchos casos, han podido anticiparlos. Como el mismo Porter afirma en su libro : las compaas y no las naciones compiten en los mercados internacionales.Los cuatro pasos para el desarrollo de competitividad nacional son:Factores: las industrias exitosas solo basan sus logros en los factores de produccin como los recursos naturales o la masa laboral existente en el pas; de tal manera, aunque sean exitosas de manera internacional, estas empresas no dejan de competir, bsicamente, en precios.Inversin: las compaas invierten en modernas instalaciones y tecnologa y trabajan para mejorar esta inversin a travs de la modificacin.Innovacin: : las empresas trabajan para crear nueva tecnologa y nuevos mtodos a travs de la innovacin interna y con la ayuda de proveedores y otras empresas de sectores relacionados.Riqueza: en esta etapa las empresas comienzan a perder su ventaja competitiva, aumenta la rivalidad y la motivacin a invertir desciende.

Las filiales extranjeras en el pas no son reconocidas por Porter como fuentes de ventaja competitiva.Porter considera que los recursos naturales no son suficientes por si mismas para determinar una ventaja competitiva, sin bien es cierto que pases como Canad, han desarrollado una serie de compaas que han convertido la ventaja competitiva en recursos naturales del pas en algo propio de la compaa a la hora de procesar y ms tarde refinar esas fuentes de ventaja competitiva propias del pas.Algunos investigadores han sugerido incluir la actividad de MNEs en el esquema de Porter como un tercer pilar externo. De hecho parece que existen buenas razones para cuestionar si la actividad de las MNE est tratada en la terna de determinantesestrategia de empresa, estructura y competencia; tal es as que muchos investigadores han cuestionado como la misma rivalidad puede incluir multinacionalidad para empresas globales y excluir de ella a las multidomsticas. Segn Dunning, existe una amplia evidencia que sugiere que las MNE estn influenciadas en su competitividad por la configuracin del diamante en otros pases ms que en el propio sin menoscabar la competitividad de los pases de orgen. As pues parece que una conclusin es irrefutable: diferentes diamantes necesitan ser construdos y analizados para diferentes pases.

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The Double Diamond The Canadian ExperienceThe Canadian market has always been seen as too small to support the development of economies of scale requiered in modern industry.It has been the practice to provide the base for developing large-scale resource business that are designed to exploit the natural resources of the country.Export strategies have emphasized commoditiy products that have been developed in isolation from major customers.The canadian gol regarding import, had been to use tariff an non tariff measures to provide a protected environment for developing secondary industry.By the time it had become clear that a more international focus was needed and the 1967 Canada- US Auto Pact demonstrated the significant economic benefits would result form the elimination of tariffs.1. Durante el proceso de firma del acuerdo para la eliminacin de tarifas comerciales entre ambos pases en referencia a coches y repuestos, acuerdo que ms adelante sirvi como base para el acuerdo de libre comercio, se observ que las plantas canadienses haban llegado a alcanzar economas de escala al producir para el mercado norte americano en su conjunto, ms all de fabricar exclusivamente para el mercado canadiense. En cuanto a estrategia corporativa, el resultado de la integracin norteamericana ha desembocado en el desarrollo del DOBLE DIAMANTE CANADA- US, que muestra que los dos pases, por motivos estn integrados en un solo mercado.12


The Double DiamondThe Canadian ExperienceBusiness in Home RegionSupporting Industries (Supply chains)Government conditionDemand condition (Customers)Factor conditions (Resources)Government conditionSupporting Industries (Supply chains)Demand condition (Customers)Factor conditions (Resources)Host Country DiamondHome Country DiamondBusiness outside Home RegionBusiness outside Home RegionBajo este nuevo esquema, las empresas canadienses estn ahora en competencia directa con las empresas norte ameriacanas que operan en el diamante. Para sobrevivir a esta rivalidad con las empresas americanas, las empresas canadienses tienen que desarrollar una capacidad competitiva de mayor nivel que la que venan desempeando hasta el momento previo a la integracin de mercados. Ya no pueden basarse en su diamante nacional ni en su base de recursos naturales. Tanto la innovacin como la competencia en costos ha de ser igualmente importante, lo cual requiere estrategias que permitan el acceso al diamante norteamericano; y por tanto los managers canadienses necesitan una doble perspectiva (de doble diamante) para la toma de decisiones.El TLC firmado entre ambos pases cre una serie de presiones sobre las filiales canadienses de empresas americanas, muchas de las cuales fueron creadas con el propsito de superar las barreras arancelarias generadas por el gobierno canadiense y generar mayores operaciones locales. Estas filiales seran ahora innecesarias, tanto as que muchas de ellas han dejado de existir y el resto estn en competencia directa con sus hermanas americanas. As, en el momento que dejen de ser competitivas, el negocio pasara al lado sur de la frontera.Mientras tanto, las mayores compaas canadienses trabajan en dos caminos diferentes:Tratando de desarrollar una posicin competitiva en el mercado norte americano y tambin en el mercado mundial.Tratando de operar bajo una perspectiva norte americana para conseguir sentar las bases de un crecimiento globalmente competitivo. Esto incluye considerar a Estados Unidos y Canada como un nico mercado, integrando as los dos diamantes para desarrollar e implementar una estrategia. En concreto esto requiere:Desarrollar productos y servicios innovadores que cubran las necesidades, simultaneamente, del mercado canadiense y norte americano.

Apoyandose en las industrias auxiliares y en la infraestructura de ambos pases, comprender que ms probable que el diamante norte americano tenga mercados ms profundos y eficientes para esas industrias.Hacer un uso libre y completo de los recursos humanos disponibles en ambos pases.13


The Double Diamond Strategic Clusters Once a country has recognized the benefit of the DD perspective, it should identify successful and potentiallyStrategic Cluster: is a network of business and supporting activities located in a specific region, where flagship firms compete globally and supporting activities are home based (although some can be foreign owned).Some of the critical business inputs and skills may come from outside the country, with their relevane and usefulness being determined by the membership of the strategic cluster.A succesful strategic cluster will have one or more large MNE as its center; they are the flagship firms.

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The Double Diamond Benefits from ClusteringA well developed concentration of related business spurs three important activities:Increase productivity: through specialized inputs, access to informations, synergies and access to public goods.More rapid innovation: through cooperative research and competitive striving.New business formation: filling in niches and expanding the boundaries of the cluster mapClustering helps cities and counties direct their economic development and recruiting efforts.It also encourages communities to focus efforts on existing industries rather than try to attract companies one at a time to an area.15



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The Relevance of PPPs on National CompetitivenessPPP is an arrangement where private parties participate in or provide support for the provision of infraestructure.PPP describes a government service or private business venture which is funded and operated through a partnership of governmet and one or more private sector company.PPP is NOT the procurement of an asset but the payment of a stream of services under specified terms and conditions17


The Relevance of PPPs on National CompetitivenessKey BenefitsExpedited completion compared to conventional delivery method. Cost savings.Improved quality and system performance fro the use of innovative materials and management techniques.Subsitution of private resources and personnel for constrained public resources. Acces to new sources of private capital.

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The Relevance of PPPs on National CompetitivenessWhy PPPs?Financial need:budget deficit, large debt.Aging or deteriorating infrastructure.Growind demand on public sector services.Search for factor efficiency and creativity.Strides to introduce competition.Lack of domestic experience or skills.Risk transfers.Bandwagon effect.19


The Relevance of PPPs on National Competitiveness Pre-Requisites of a Successful PPP ProgramPolitical commitment (continuity of policy)Enabling legislation: concession, laws, tax anomaliesExpertise: deliver the capacity-building in both sectors)Project prioritization: focus to improve success rates.Deal flow and standarization: regularity of deals based on standards contracts.20


The Relevance of PPPs on National Competitiveness Pre-Requisites of a Successful PPP ProgramBOT: Build Operate Transfer.BOO: Build Own Operate.BOOT: Build Own Operate Transfer.DBF: Design Build Finance.DBFO: Design Build Finance Operate.DBO: Design Build Operate.BLT: Build Lease TransferBTO: Build Transfer Operate.DBFOM: Design Build Finance Operate Manage.LROT: Lease Renovate Operate Transfer.BOOR: Build Own Operate Remove21


PPPs - Public Private Partnership Project Procurement OptionsPublic responsibilityPrivate responsibilityTraditional Public Sector ProcurementBuild-Operate-Transfer (BOT)Buid- Own- OperateDesign-Build-Finance-Operate22


The Relevance of PPPs on National Competitiveness Advantages and Disadvantages of PPP Relationships: PPP Type- ContractingMain Features:Contract with private party to desing and build public facility.Facility is financed and owned by public sector.Key driver is the transfer of design and construction risk.Application:Suited to capital projects with small operating requirement.Suited to capital projects where the public sector wishes to retain operating responsibility.Stregngths:Transfer of design and construction risk.Potential to accelerate construction programme.Weaknesses:Possible conflict between planning and environmental considerations.May increase operational risk.Limited incentive for whole life costing approach to design.Does not attract private finance.23


The Relevance of PPPs on National Competitiveness Advantages and Disadvantages of PPP Relationships: PPP Type- BOTMain Features:Contract with private party to desing ,build and operate a public facility for a defined period after which the facility is handed back to the PSThe facility is financed by th PS and remains in public ownership throughout the contract.Key driver is the transfer of operating risk in addition to design&construction risk.Application:Suited to projects that involve a significant operating content such as water & waste projects.Stregngths:Transfer of design and construction risk.Potential to accelerate construction programme.Risk transfer provides incentive for adoption of whole life costing approach.Weaknesses:Possible conflict between planning and environmental considerations.Contracts are more complex and tendering process can take longer.Contract management and performance monitoring systems required.Cost or re-entering the business if operator proves unsatisfactory.Does not attract private finance and commits public sector to providing long term finance.24


The Relevance of PPPs on National Competitiveness Advantages and Disadvantages of PPP Relationships: PPP Type- BOTMain Features:Contract with private party to desing ,build and operate a public facility for a defined period after which the facility is handed back to the PSThe facility is financed by th PS and remains in public ownership throughout the contract.Key driver is the transfer of operating risk in addition to design&construction risk.Application:Suited to projects that involve a significant operating content such as water & waste projects.Stregngths:Transfer of design and construction risk.Potential to accelerate construction programme.Risk transfer provides incentive for adoption of whole life costing approach.Weaknesses:Possible conflict between planning and environmental considerations.Contracts are more complex and tendering process can take longer.Contract management and performance monitoring systems required.Cost or re-entering the business if operator proves unsatisfactory.Does not attract private finance and commits public sector to providing long term finance.25


The Relevance of PPPs on National Competitiveness Advantages and Disadvantages of PPP Relationships: PPP Type- DBFOMain Features (as BOT plus):Variant forms involve different combinations of the principle responsabilities.Application:Suited to projects that involve a significant operating content such as roads, water & waste projects.Stregngths (as BOT plus):Attracts private secto finance and debt finance discipline.Delivers more predictable and consistent cost profile.Greater potential for accelerated construction programme.Increased risk transfer provides greater incentive for private sector contratctor to adopt a whole life costing approach to design.Weaknesses (as BOT plus):Funding guarantees may be requieredChange management system required.

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The Relevance of PPPs on National Competitiveness Advantages and Disadvantages of PPP Relationships: PPP Type- ConcessionMain Features :As for DBFO except private party recovers costs from user chargers.Key drivers is the polluter pays principle and utilising private finance and transferring design construction and operating risk.Application:Suited to projects that provide an opportunity for the introduction of user charging.Particulary suited to roads, water and waste projects.Stregngths (as DBFO plus):Facilitates implementation of the polluter pays principle.Increases level of demand risk transfer and encourages generation of third party revenue.Weaknesses (as DBFO plus):May not be politically acceptable.Requires effective management of alternatives/substitutes e.g. alternative transport routes, alternative waste disposal options.

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WeThe basis of Porters diamong Present a double diamond model and how it works under the Canadian modelSet the basis of knowledge for PPP, learn about the main types and how they work, their benefits and drawbacks.

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topic 2-lesson 6 2015

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