1) Born

2) Growth

3) Mature

4) Decline

1) Changes in demographics

2) Shifting consumer tastes and needs

3) Technological substitution

1) Maintain leadership stance

2) Pursue niche strategy

3) Harvest profits

4) Exit early

5) Consolidate

A pattern that shows, over long periods that technological discontinuities tend to appear at rare and irregular intervals in industries.

When a punctuated equilibrium appears it triggers an era of ferment due to a technology discontinuity occuring.

Push - 1) Force of competition

2) Shift towards democracy

3) Reduce trade barriers

4) Advancing technology

Pull - 1) Potential for sales growth

2) Obtaining resources

1) Mergers/acquisitions/joint ventures/strat. alliances

2) Foreign direct investment (FDI)

3) Licensing and franchises

4) Outsourcing

5) Exports/imports

6) Establish subsidiaries (branch operations)

Pros - 1) Encourages economic benefit

2) New technologies

3) Provides financial support for poor countries

4) Creates jobs

5) Brings countries together and co-operates

Cons - 1) No allegiance to specific country

2) Profits don't remain in host country

3) Hard to control MNCs as gov., key function are centralized in other countries

Trade theory that dominated 15th-17th century. Accumulate financial wealth (holdings of treasure) through trade surpluses (exports > imports)

This theory is incorrect because it assumed the world has a zero-sum game (fixed amount of wealth) meaning you can only get wealth by decreasing other countries wealth

1) Low-priced foreign goods can compete with domestic goods, loss of sales and loss of jobs domestically

2) Imports > exports results in trade deficit which means more money flows outta country, gotta reduce imports

1) Tariffs (taxes on goods coming in)

2) Quotas (imports limited)

3) Subsidies (encourage exports by giving subsidies to domestic companies)

Why is Trade Protectionism or Mercantilism bad? (3)

What Do They Usually Create?

1) Trade retaliation (other country puts a tariff on our goods in return)

2) Increased costs to consumers

3) Reduced competition between domestic firms

They usually create less production, loss of jobs and economic decline

1) General Agreement on Tariffs and Trade (GATT)

2) World Trade Organization (WTO)

3) International Monetary Fund (IMF)

4) World Bank - helps lesser developed countries be financially stable, borrows funds from developed countries and loans them out

1) Free trade area (no tariffs or trade barriers, lowest degree of integration)

2) Customs union (removal of tariffs and trade barriers b/w member countries, better then 1), doesn't include nonmember countries)

3) Common market (Flow of labour and capital across borders, better then 1) 2), trade policies for nonmembers)

4) Economic Union (Harmonized fiscal/monetary/tax policies, higher level of integration than 1) 2) 3))

1) European Union (EU) - common market

2) Asian trading bloc (Asean and Apec)

3) North American Trading Bloc (FTA and NAFTA)

1) What goods and services are produced and distributed

2) How good and services are produced and distributed

At the top is the gov. general (passive administrative role, follows advice of PM), below him is

prime minister (PM, leader of Canada),

parliament (passing legislations)

and judiciary (court system)

1) Tax collector (income tax, sales, property, tariffs, alcohol, tabacco)

2) Business owner (crown corporations)

3) Regulator (lower imperfect comp., act in public interest)

4) Guardian of business (bailouts and subsidies)

Deregulation is the reduction of laws and regulations,

ex// banks allowed to do insurance, loans not just 1 thing

Privatization is selling a crown corporation to the private sector

1) Provides services a profit maximizing company would not (ex// education)

2) Protect industries that vital to economy (Canada Post)

3) Nationalize industries that are monopolies (LCBO)

4) Implement public policies that can safeguard or protect national interests

Pros - 1) Protecting young industries

2) Increases foreign direct investment (creates jobs)

3) Maintaining balance of trade (no trade deficit)

4) Protecting domestic business from unfair competition

1) Promotes political agenda and not profit, can create jobs but are they sustainable?

2) Creates uneven playing field

3) Creates dependancy and benefits only a few

4) Contradicts free/open markets

5) Lose trust in politicians

1) Stakeholders and Objectives - May not agree

2) Employees' Objectives - strikes from employees or private sector restructuring and laying off many employees

3) Public's objectives - Is it safe for environment? Will it be bought by foreign competition?

1) Cost leadership - reduce costs to gain a competitive advantage

2) Product differentiation - increase the perceived value, make a brand name product

3) Focus - target specific groups of people

Corporate-Level Strategy (2)

What needs to be targeted?

1) What businesses or markets a firm should compete in

2) How these businesses or markets can be managed to create synergy

Need to diversify in order to enter multiple businesses, only one business is not profitable enough in today's day

1) Intrafirm dynamics (motive for diversification)- involves growth and self-interest to diversify, achieves economics of scope (cheaper to be in 2 businesses then 1 alone)

2) Interfirm (motives) - involves market power enhancement, response to competition and imitation

1) Related diversification - expands core businesses or markets into related businesses (achieves horizontal integration), also achieves economies of scope

2) Unrelated diversification - diversify into a market that is not similar to current market it is in, low synergy and most firms believe they can make synergy through mgmt. skills

3) Vertical integration - refers to an extension/expansion of firm by removing/making productive processes (ex// instead of selling your goods at grocery store, make a store and sell them there)

Means to Diversify (3)

Types of Strategic Alliances (3)

1) Internal development - requires large resource commitment and time to develop to markets

2) Mergers and acquisitions

3) Strategic alliances

-Nonequity alliance (2 firms working under a contract)

-Equity alliance (1 firm with partial ownership in the other)

-Joint ventures (2+ firms contributing resources to make a seperate entity)

1) Increased competition creates more innovation

2) Can operate efficiently

3) No longer need involvement from public sector, private sector can handle the business

4) Government makes money

1) Technological Discontinuity

2) Era of Ferment

3) Dominant Design

4) Era of Incremental Change