Environment Chapter 10

- the process of closer integration and exchange between different countries and people worldwide, made possible by falling trade and investment barriers, advances in telecommunications and reductions in transportation costs

• responsiveness framework- Strategy framework that juxtaposes that pressures an MNE faces for cost reductions and local responsiveness to derive four different strategies to gain and sustain competitive advantage when competing globally; international strategy, localization strategy, global-standardization strategy, and transnational strategy

The need to tailor product and service offerings to fit local consumer preferences and host-country requirements

• strategy that involves leveraging home-based core competencies by selling both the same products and services in both domestic and foreign markets; advantageous when the MNE faces low pressures for both local responsiveness and cost reduction

Strategy pursued by MNE’s that attempts to maximize local responsiveness, with the intent that local consumers will perceive them to be domestic companies; strategy arises out of the combination of high pressure for local responsiveness and low pressure for cost reductions; aka multi-domestic strategy

• Strategy attempting to reap significant economies of scale and location economies by pursuing a global division of labor based on wherever best-of-class capabilities reside at the lowest cost

A firm’s strategy to gain and sustain a competitive advantage when competing against other foreign and domestic companies around the world

Strategy that attempts to combine the benefits of a localization strategy with those of a global-standardization strategy; sometimes called glocalization

a firm’s investments in value-chain activities abroad

Assumption that consumer needs and preferences throughout the world are converging and thus becoming increasingly homogenous

Additional costs of doing business in an unfamiliar cultural and economic environment, and of coordinating across geographic distances

A company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries