Welcome back. This is our final lecture, and today I want to talk about three big subject. One is global supply chain management and sustainable supply chain management, and finally, effective decision making for global, sustainable supply chain management [bbb]. First, you get global supply chain management with globalization. This, you know, global supply chain management. There are many definitions of globalization. People already have different types, you know, how to define globalization. But I want to suggest globalization from the supply chain management perspective. When you look at globalization from this SCM perspective, the goal of globalization is to maximize efficiency-driven and responsiveness-driven value on a global scale. Very naturally, it always implies that how to minimize the mismatch between demand and supply and supply and demand on a global scale. So that's the, globalization, the goal of globalization. And how we can achieve these goals and objectives? Basically, what we're doing is to spread the value chain activities and functions on a global scale. So globalization is processed through which the company spreads its value chain activities on a global scale. Over time, we move our manufacturing to China. Over time, we move our R&D to China or R&D to the US, or we build our plant in the Europe, and we find new suppliers in, Southeast Asia. So, when you look at globalization it's nothing but spreading, nothing but moving these value chain activities on a global scale, and therefore the globalization involves also structure dimension and infrastructure dimension as, as well, right? Structurally, which function I want to move to which country, to which market? And infrastructurally, how to coordinate all these activities and functions together in order to optimize the efficiency, in order to maximize the responsiveness-driven value at the same time? That's the globalization, and that's the globalization defined from the supply chain management perspective. So globalization is not a static phenomenon. It's a process, a dynamic process [bbb]. By looking at, by defining globalization as dynamic process, we wanted to get this timeline, right? We wanted to get this timeline. For instance, you know, if this is the, actual globalization timing, in other words, we actually enter, we actually enter the global market, then that's pre-entry period, right? And then after that, post-entry, as a going concern, and eventually we have to decide whether we exit that particular market or not. So I wanted to get these you know, timing issues, pre-entry and entry time, and then post-entry and then exit if necessary. What other relevant decision factors for each one of these time period. First of all, pre-entry. In other words the firm must make certain decisions before it enters the particular market and that's pre-entry decisions. First of all, the company has to define its motivation why we want to globalize. Is it because our domestic market is saturated or is it because particular, you know, the current market is full? Or the new market has more attractiveness? Or is it because of our competitors. Because my competitor enters a particular market, I want to move the market this way, because I want to, I want to, you know, I believe that that the best defense is, the you know, offense, right? In order to defend your territory, you attack my competitors you know price. Or sometimes, we want to globalize in order to enjoy our efficiency cost to deduction especially the day of the course or it because we want to diversify our risks. Or is it because we want to learn or innovate or something. We want to manage about the market. We want to get more technology, knowledge and know about a particular product and services. So once you, you must define your motivation, why you want to globalize. Of course, the motivation can change over time. Even if I start with deficiencies, my globalization motivation over time, I think that I will move towards learning and innovation motivation not just the efficiency. But whatever happens along the way, important thing is you have to start with your initial motivation. You cannot just to say that, okay, motivation can change all the time so I don't want to define any motivation right now. That's not good enough. Once you decide, once you have your motivation and then, you have to decide what you do, what you have to do when you actually enter the market? In other words, what kind of entry mode I want to take? Do I want to have my wholly owned subsidiary? Do I want to have my wholly owned subsidiary or do I want to have joint venture? Joint venture with my local partners and if joint venture, what is the percentage? I want to have minority position or I want to have majority position. If I decide to wholly own this subsidiary, wholly own the, [bbb] wholly own the subsidiary, then I have to decide whether I want to have green field entry. In other words whether I have to build my plant, build my operations from scratch, or I can do that through acquisition. In other words, whether I want to acquire existing plant, existing company, and so on and so forth. What are the factors I have to think about, when I decide this entry mode? How much of resource I have? Probably wholly owned subsidiaries requiring much more commitment, much more, much larger resource commitment than joint venture, right? And also profitability potential. If I know that if everything goes well I can have a big profit from their operations, and I don't want to share the profit with my partners, then I want to have wholly owned subsidiary. But there is another issue related to knowledge and experience, right? [bbb] Let's say I want to enter, I want to, I want to enter the Chinese market, but I don't have any information, I don't have any knowledge, especially I don't have any, you know [fff] and also I have a very little knowledge about the dealer system in China, then it's too risky for me to enter the market alone. So probably I want to go there with my partner, joint-venture partner, especially I look for the [uuu] Chinese joint-venture partners. So, whether I have enough knowledge or experience regarding the market or regarding the product will determine the entry mode as well and also the target market's culture, right? This is again related to this experience, knowledge, knowledge [iii] right? If there is a huge culture difference between my county and the foreign market, then it's risky for me to enter there alone, because the cultural difference implies that, implies my lack of knowledge about about about the market, about the customers, about the dealer system, so on and so forth. And also values and configuration coordination, which function I want to go first and then how to connect that function with my adjusting operations and my adjusting other value chain activities. So there are couple of. These are the, the key decision factors the firm, the firm has to decide when it, it considers entering a particular market. And one we enter the market, once we inside that fully market, then we have to think about how to grow. How to expand inside that market. Of course on a global scale meaning that I have my, you know, presence in many different markets and how to connect all these things together. So that's about growth and expansion, right? Scale, scope, speed. Three S. In other words, Let's say I enter this particular market with a small plant. I moved my, I moved my operations manufacturing function to the market. Then there is question about scale. Should I increase my plant? That is scale, scope. In addition to manufacturing, do I have to move my R&D function as well? That's about scope. And how fast, how fast I have to do this. How fast I increase my scale, how fast I increase my scope. So, that's everything. Scale, scope, speed. So, I think that, these three S's are related to value chain configuration. And scale implies vertical, right? Vertical, well actually it's not vertical. Scale is related to horizontal expansion, right? And when we say scope, okay. Scope is related to it scale is related to horizontal expansion and scope is related to the vertical expansion. How fast, how fast I vertically grow? How fast I horizontally grow? And obviously, we have to think about this corporate culture, corporate DNA, and how to make our operations local. In other words, localization. How can I make sure that the local people, local population accepts our operations as one of their own. That's very important for, you know, long-term growth, long-term some sustainable growth and expansion in the market. Now, finally we have to decide whether we needed to exit the market or not. Or sometimes you can say that it will stay in the market forever, that's fine. But you have to always, you know, consider the possibility to exit from the market. Maybe there are new market opportunities more attractive, or there might be some resource opportunity cost. There are better opportunities in other countries. And we have unlimited resources. Not just monetary resources, material resources, but also human resources. We don't have infinite number of well-qualified managers. And there are better and more attractive opportunities in other regions in other countries, then I want to shift my resources from that particular, you know, the current local market, current foreign market to the new market and new regions. So, when we decided, you know, whether we exit or not, we have to consider what happened in the, so far, what happened so far. Whether we have done greatly, whether we have done, you know, great. Whether we have achieved our goals. What is the potential? Is there bigger potential demanding here, or the potential where, you know, this up here sooner or later? So, those are the factors we have to take into account. When we decide whether we exit from the particular market or not.