The objective of this session is to better assess the relative certainties and key uncertainties that businesses face, and what this means for your own company’s concerns. The global economy is the result of inflation, recession, stagflation, oil price shocks, exchange rate volatility, trade frictions, and some recent major geopolitical changes.
We will examine how and why global economic conditions have profound strategic and tactical implications for senior executives’ choice-sets to deal with changing environments. The goal is for participants to gain a concrete understanding of the frameworks used to evaluate risks and opportunities in international markets, and their limitations.
We will tackle 3 themes, illustrated by current examples:
(1) The macro environment: business cycles, capital markets, risk, the role of policy (the current economic and financial crises, inflation, interest rate policies, stimulus packages…). Managing the business cycle for competitive advantage begins with the study of why, how, and when the business cycle moves and how such cyclical movements affect the magnitude and timing of key strategic, tactical, and functional decisions of the firm.
(2) International capital flows, exchange rates and competitiveness (the U.S. dollar, the Chinese RMB, the Euro, and new players)
(3) Looking for growth: new markets and new players in old markets (China, Sovereign Wealth Funds …)
We will use two cases, one about an MNC in the truck industry (Volvo) and one about the automotive clustering in Europe. We will illustrate some of the challenges of having a global strategy in the truck industry, as well as highlight a new industrial policy to reduce some of the uncertainties and to accompany MNCs’ global strategies.