+
Cards In This Set
| Front | Back |
|
What are the things that motivate a company to expand internationally?
|
• Increase size of potential markets
• economies of scale
• Taking advantage of arbitrage opportunities
• Extend PLC
• Optimize the physical location for every activity in its value chain
performace enhancer
cost reduction
|
|
Potential risks of international expansion
|
Currency risks
economic risks
political risks
certain types of management risks
|
|
What are some Political and economic risk
|
9 Social unrest
9 Military turmoil
9 Demonstrations
9 Violent conflicts and terrorism
9 Laws and their enforcement
|
|
Least corrupt countries
|
FINLAND, ICELAND, NEW ZEALAND
|
|
What are some currency risks?
|
9 Currency exchange fluctuations
9 Appreciation of the U.S. dollar
|
|
Management risks
|
9 Culture
9 Customs
9 Language
9 Income levels
9 Customer preferences
9 Distribution system
|
|
Offshoring and outsourcing:
|
Outsourcing
9 occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house.
• Offshoring
9 takes place when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location.
|
|
2 opposing pressures as you expand international (Cost and adapting to local markets)
|
Reducing costs and adapting to local markets
• Strategies that favor global products and brands
9 Should standardize all of a firm’s products for all of their worldwide markets
9 Should reduce a firm’s overall costs by spreading investments over a larger market
|
|
Three assumptions
|
1. Customer needs and interests worldwide are becoming more homogeneous
2. People are willing to sacrifice product preferences for lower prices at high quality
3. Economies of scale in production and marketing can be achieved through supplying global markets
|
|
Fees that a multinational receives from a foreign licensee in return for its use of intellectual property are usually called
|
Royalities
|
|
All of the factors below have made India's software services industry extremely competitive on a global scale
|
A. large pool of skilled workers
B. Large network of public and private educational institutions
C. large growing market and sophisticated customers
|
|
Assumptions that may not always be true
|
1. Product markets vary widely between nations
2. In many product and service markets, there appears to be a growing interest in multiple product features, quality and service
• Technology permits flexible production
• Cost of production may not be critical to product cost
• Firm’s strategy should not be product-driven
|
|
4 diff types of strategies of international expansion
|
global
transnational
international
multi-domestic
|
|
International Strategy:
|
A strategy based on firms’ diffusion and adaptation of the parent companies’ knowledge and expertise to foreign markets, used in industries where the pressures for both local adaptation and lowering costs are low.
• based on diffusion and adaptation of the parent company’s knowledge and expertise to foreign markets.
• primary goal is worldwide exploitation of the parent firm’s knowledge and capabilities
|
|
Global Strategy:
|
a strategy based on firms’ centralization and control by the corporate office, with the primary emphasis on controlling costs, and used in industries where the pressure for local adaptation is low and the pressure for lowering costs is high
• Competitive strategy is centralized and controlled largely by corporate office
• Emphasizes economies of scale
|
