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Class notes of lectures International Management
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LesnotitiesINTRODUCTION + CONELEARN
Competitive advantage
A comparative advantage can never be the source of an competitive advantage.
Comparative advantages: what you are good at. Like low labour costs in China, but everybody who
starts up a business in China can use these low labour costs. So the comparative advantage cannot be
a competitive advantage because it’s available to everybody.
What is culture?
Culture is the collective programming of the mind. Actions are understood and we can anticipate
how people will react. Having the same culture means having the same mindset. It is difficult to grasp
all aspects.
Conflicts within the same cultural framework are relatively easy to solve, because there are certain
ground rules. Problems that arise between cultures are a lot more difficult to solve because they
have another mindset or problems across frames (so culture is the same as frame, systems).
Often big opportunities lie outside that framework/culture, because if you only operate within the
same culture/framework there is no innovation. The innovative people question the framework we
live in and try to change it. All the disruption companies are thinking outside the framework/culture.
Cultural dimensions Hofstede:
5 dimensions of culture IBS
Power distance
o About how to view inequality in physical & intellectual capabilities
o High power distance culture:
Inequality is good (e.g. age & seniority matter)
Everyone has a place, some are high & others are low
The powerful deserve privileges & should not hide their power
Uncertainty avoidance
o About how tolerable they are to uncertainty
o High uncertainty avoidance culture
Conflict should be avoided
Authorities are always correct
Laws & rules should be followed
Individualism/ collectivism
o About relationship between an individual and the people around him
o Individualistic culture:
People are responsible for themselves
Individual achievement is ideal
People should not be emotionally dependent on groups
o Collectivistic culture:
An individual’s identity is based on his group membership
Group decision making is best
Groups protect individuals in exchange for loyalty to the group
Rewards & recognition go to the group
Masculinity/ femininity
o About the relationship between gender and work roles
o Masculine culture
Gender roles should be clearly distinguished
Men are assertive and dominant
, Men should be decisive
Work has priority over other duties; work-life balance in favour of work
Advancement, success & money are important
Long term orientation
= Confucian dynamism
o About attitudes towards time, persistence, status, protection of face, respect for
tradition & reciprocity of gifts & favours
o High long term oriented cultures
Strategic planning is important
You need to be willing to invest
Slower results are accepted
Persistence to achieve goals
Sensitivity to social relationships
Pragmatic adaption: focus on what can be useful to you
Strategy in 3 steps
Why do we need a strategy?
To reach your LT goals, to create a competitive advantage, to make profit, social purpose, and to
achieve consistency (align everything internally & eternally). A lot is about framing & looking at the
long term, it’s about making money in a sustainable & durable way.
The strategy frame is more important than today’s sales, yet a lot of people forget that.
=> Strategy is the search for LT outperformance
Are we making money?
Industry analysis
Happens to be in the right market, at right time in right place
Competitive advantage
Unique competences, strategic assets
Sustainable comp advantage in our industry
Resource based view
= start form getting to know your own resources & start looking at competitive advantages
Afterwards: look at resources & countries you should be in etc.
You need to know, understand, evaluate & adapt. If you’re making money and you don’t know why,
it’s bad. This way you can’t keep up the success; it can even lead to failure because you think you’re
doing good.
You have to ask yourself 3 basic questions: if you’re making money, is it because:
- You’re in the right industry (market, place & time)?
- Because of a sustainable competitive advantage in what you do?
→ Competitive advantage & generic strategies
- Because you have unique competences/ strategic assets that others don’t have?
= Core competence
→ Resource-based view
Resource based theory CA&S
Conditions for R&C to be a source of a sustainable competitive advantage
They’re scarce
They’re valuable
Imperfect mobility
o Most R&C are immobile, 2 exceptions
o Employees/ individuals are mobile
Can go to the highest bidder & leave the firm
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