Unit V Discussion Board Please make sure that it is your own work and not paste off of someone else work. Please watchout for spelling errors and grammar e
Unit V Discussion Board Please make sure that it is your own work and not paste off of someone else work. Please watchout for spelling errors and grammar errors. Use APA format when doing this assignment. This a DBA course and have to be done on this level.
Book Reference: Hill, C. W. L. (2021). International business: Competing in the global marketplace (13th ed.). McGraw-Hill Education. https://online.vitalsource.com/#/books/9781264123926
Read the AB InBev, Beer Globally, and Creating Value on page 377 of the course textbook. Answer the following questions:
What strategy was AB InBev pursuing when it was creating value in the beer industry globally? What strategy paradigm was used regarding profitability? DBA 8710, International Business and Global Strategy 1
Course Learning Outcomes for Unit V
Upon completion of this unit, students should be able to:
5. Contrast the bargaining power of suppliers and the bargaining power of buyers.
5.1 Determine the bargaining power of a buyer, and determine why strategies might change.
Chapter 13, pp. 372–400
Required Unit Resources
Chapter 13: The Strategy of International Business, pp. 372–400
In an economic sense, it is a buyer and supplier world. Without each, no products are bought, sold, created,
designed, or even used. As we contrast the bargaining power of suppliers and buyers, we will examine
strategies, value creation, leveraging, and economies of scale, and we will start with the importance of
communication along with the psychological capital that is needed.
An international agreement involves a meeting of the minds. There is no doubt that both parties must know
what they are agreeing to (i.e., the obligations, benefits, and potential consequences). The greatest challenge
in international negotiation lies in misunderstanding the culture of the parties involved. Note that there may be
cultural differences as to how rules are negotiated for integrity, politeness, use of deception or coercive
approaches/methods, and body language; therefore, it is highly important to work collaboratively and consider
diversity when creating organizational policies.
For international negotiations, that preparation includes understanding the culture of the company or person
with whom you are negotiating. Take time to learn the local customs and culture to evaluate bargaining power
abilities. A few points to take into consideration include being flexible, knowing where to negotiate, developing
relationships, focusing on interests, avoiding generalizations, listening and acting ethically, knowing when to
use an interparty, knowing foreign expectations, developing a negotiation plan, socializing before working
together, ensuring that the opening demands are carefully crafted (i.e., they should not be too modest),
providing enough time for negotiations, avoiding a my way or the highway attitude, having face-to-face
negotiations, and using a win-win tactic. It is important to have clear objectives of the negotiation, a well-
planned strategy, and a plan for implementing the strategy.
From understanding the mindfulness needed to understanding the challenges of negotiation, there are other
important components to consider. One of these is global psychological capital, which represents the
personality variables that underlie effectively working with people of different nationalities. The first of these
competencies is passion for diversity. This signifies a person’s passion for traveling and getting to know
people from other parts of the world. Passion for diversity is a crucial component in an individual’s ability to
understand his or her bargaining power! The more knowledge and curiosity that an individual possesses, the
higher the chance to understand your counter’s strategy, purpose, and goals.
We all understand that in international business, one must have a quest for adventure. This refers to one’s
willingness to take risks, test his or her ability, and handle challenging and unpredictable situations in the
global environment. High self-assurance is another ideal quality for individuals working in a global setting.
UNIT V STUDY GUIDE
The Strategy of
DBA 8710, International Business and Global Strategy 2
UNIT x STUDY GUIDE
Assessing self-assurance involves determining how energetic and self-confident someone is and how
comfortable someone is in uncomfortable situations. Across cultures, it is generally accepted that an
individual’s personality is consistent and does not easily change; therefore, for someone to see improvement
in his or her global psychological capital, it requires immersion and regular coaching to understand the
complexities of international negotiations. For example, in negotiation, you must have a passion for diversity.
What does it mean to have passion for diversity? If you have a passion for diversity, you most likely have the
characteristics described below.
Passion for Diversity
One enjoys exploring other cultures and tendencies.
One enjoys getting to know people from other parts of the world.
One enjoys traveling and living in another country.
Do you have a thirst for international negotiation? Review the checklist below.
Thirst for International Negotiation
Do you have an interest in dealing with challenging situations?
Are you willing to take risks?
Are you willing to test your abilities?
Do you enjoy dealing with unpredictable situations?
Once the passion for international negotiation has been established, it is important to start with strategy.
Strategy is about attaining goals for the firm, but it is much more than this. You must know your own strategy
first! What does it consist of? Most strategies are created based on the following criteria: generating profits,
having a return on investment (ROI), entering new marketplaces, creating value, and increasing margins
based on demand in the future (Hill, 2021). Value in your international business can be increased by sales
easier than by margins alone. For example, if a customer can see more value in a company’s products, the
company can expand its pricing structure, offer warranties, and offer money-back guarantees. When
understanding the bargaining power of a supply or product, one needs to understand the creation of value
from the product. Most companies are not as successful as Apple, yet many dream of having Apple’s
negotiating power with suppliers and buyers. That was not always the case for Apple. For years, Apple
struggled finding a home for manufacturing. It was only because of their core competencies and incredible
knowledge of how to utilize them that allowed them to expand in ways not possible several years ago.
We know that any company can increase their growth by selling products on an international level; however,
many of the companies that are now multinationals started out manufacturing their product(s) in their home
country first (Hill, 2021). When negotiating, where is your company? Are they just starting out, or are they
already a multinational entity? The success of an international business is dependent on understanding your
core competencies regarding your product! This includes production, sales, shipping, management, and
others. These core competencies are essential to knowing your leveraging abilities to sell and move products.
Think of it in relation to Maslow’s hierarchy of needs. The bottom of the pyramid would be your core
competencies. This allows a company to show value or perceived value in order to utilize bargaining power to
sell or buy. Apple has a core competency in the production of iPhones. It can produce high-quality, well-
designed phones at a price that consumers are willing to spend for the protection of data, durability, and ease
of software. This leverage allows Apple to use its core competencies to exercise its bargaining power across
Apple creates global effects known as economies of scale. This is when a company begins to create
something in mass quantity, which then reduces the cost to the consumer or seller of products. This is a
dream of many companies to operate at such a level. Imagine having so much power that you can lower your
unit cost, increase profitability, and have sellers constantly knocking at your door. One way to accomplish
DBA 8710, International Business and Global Strategy 3
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such a goal would be to lower fixed costs for many products, and you could make your costs even lower by
selling to more countries. As sales increase globally, Apple’s bargaining power with suppliers increases,
which can allow the company to successfully utilize economics of scale in the purchasing of raw materials and
bargain down the cost to increase profitability. Sears, Roebuck and Company is an excellent example of this
in the early 20th century. If you wanted to buy something, then you got a Sears, Roebuck and Company
catalog, ordered the product, and it would be delivered. Walmart is the example from the late 20th century.
With stores and superstores all across the United States, they used their massive overall sales numbers and
bargain basement to outprice competitors so they would either have to do business with Walmart or compete
against them. Amazon would be a modern example.
Consider the following question: What strategy does your company want to implement? Then, how do we use
our bargaining powers to acquire the best deals possible for our products and services? Companies focus on
product development first, and then they focus on research and development (R&D) in their own home
country. If the company is lucky, they have used some bargaining power to find a manufacturing location
within another country where they would hope to conduct business. While this may raise costs, it opens the
world of international business to companies that could only dream of using this strategy just a decade ago.
Managing costs allows international companies to thrive in an ever-evolving international environment.
Hill, C. W. L. (2021). International business: Competing in the global marketplace (13th ed.). McGraw-Hill
Suggested Unit Resources
In order to access the resources below, utilize the CSU Online Library to begin your research.
The article below attempts to evaluate the effectiveness of using coercion and reward power to appropriate
value in buyer-supplier negotiations.
Reimann, F., Shen, P., & Kaufmann, L. (2016). Effectiveness of power use in buyer-supplier negotiations: The
moderating role of negotiator agreeableness. International Journal of Physical Distribution & Logistics
Management, 46(10). https://doi.org/10.1108/ijpdlm-11-2015-0278
The article below uses the lens of social exchange theory to investigate the influence of incentives on supplier
performance under various conditions of buyer-supplier dependence.
Terpend, R., & Krause, D. R. (2015). Competition or cooperation? Promoting supplier performance with
incentives under varying conditions of dependence. Journal of Supply Chain Management, 51(4), 29–