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Perfect Competition assumes what four things?
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-large number of informed buyers/sellers of a homogenous product-buyers/sellers posses perfect information-no obstacles to entry or exit-resources are fully mobile
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_____________ _____________: is one in which a firm's competitive position in one country is significantly affected by its position in other countries
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Global industry
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Risk-adjusted rates of return should be constant across firms and industries. What is the name of this notion?
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The Industry Organization (IO) Paradigm
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The nature of competition in an industry is the combined outcome of competitive pressures generated by: The Five Fundamental Forces Model. What are these 5 forces?
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1. rivals battling for market share2. the entry of new rivals seeking market share3. the efforts of firms outside of the industry to convince buyers to switch to substitute products4. the push by suppliers to charge more for inputs5. the push by buyers to pay less for products
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The Five Forces Model defines the structure and competition in an industry in a way that reveals what four things?
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1. what forces are driving changes within an industry2. the strength of each driving force3. which forces shape strategic conduct4. that strategic moves rivals are likely to make
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There are seven forces which might transform the structure of an industry, what are they?
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1. changes in market growth rate2. technological developments3. shifting customer purchasing patterns4. manufacturing innovations (revise cost/efficiency)5. government regulations/policies6. entry or exit of major firms7. diffusion of business expertise across countries
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Operationally, firms create value through what two ways?
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1. cost leadership2. product differentiation
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List the activities involved in the Value Chain
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Designproductionmarketingdistributionsupport
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The Value Chain Configuration might be influenced by what 7 things?
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-cost factors (wages, inflation)-business environments (risk)-cluster effects -logistics (just-in-time practices)-digitalization-economies of scale-customer needs
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Value Chain Coordination may be influenced by what 4 things?
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1. operational obstacles (communications, currencies)2. cultural differences (info sharing, time)3. learning effects 4. subsidiary networks (real-time connectivity and functional integration)
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List and explain two pressures in support or global integration
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1. globalization of markets: customers want low cost products2. globalization of production: efficiency gains via standardization
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List and explain two pressures for local responsiveness
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1. Customer Divergence: differences in culture, national attitudes, and economic and usage conditions2. Host Government Policies: economic freedom, workplace and product regulations, buy-local legislation
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What are the four strategic alternatives for expansion into foreign operations?
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1. International strategy2. Multidomestic strategy3. Global strategy4. Transnational sltrategy
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Which strategic alternative for expansion into foreign operations leverages the firm's core (domestic) competencies?(control and decision making at headquarters)(international operations are secondary to domestic)-what is a flaw of this system?
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1. International StrategyFlaw: ethnocentric view might lead to missed opportunites
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Which strategic alternative for expansion into foreign operations grants decision making authority to local managers and emphasizes responsiveness to local conditions?-what is a flaw of this system?
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2. Multidomestic StrategyFlaw: may lead to duplication in activities
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