Term
| Factors effecting a nations competitiveness |
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Definition
factor endowments
demand conditions
related and supporting industries
firm strategy, structure and rivalry |
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Term
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Definition
land, labor, capital
must be industry and firm specific
rare valuable difficult to imitate |
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Term
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Definition
demands that consumers place on an industry
drives firms to compete and get better |
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Term
| related and supporting industries |
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Definition
| enable firms to manage inputs more effectively |
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Term
| firm strategy, structure and rivalry |
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Definition
strong consumer demand
strong supplier base
high new entrant potential from related industries
domestic rivalry leads to search for new markets |
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Term
International Expansion
Motives |
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Definition
increase market size (economies of scale)
take advantage of arbitrage opportunities
enhance a products growth potential
optimize location on value chain activity
explore reverse innovation |
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Term
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Definition
| an opportunity to profit by buying and selling the same good in different markets |
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Term
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Definition
| new products developed by developed country multinational firms for emerging markets that have adequate functionality at a low cost |
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Term
International Expansion
Risks |
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Definition
Political
Economic
Currency
Management |
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Term
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Definition
social unrest, military turmoil, demonstrations etc.
could lead to...
destruction of property
disruption of ops
non-payment |
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Term
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Definition
market diversification
developing stakeholder coalitions
wooing key influencers
putting key stakeholders on their boards |
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Term
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Definition
| piracy and counterfeiting |
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Term
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Definition
global dispersion of value chain
outsourcing
off shoring |
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Term
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Definition
lower wages
benefits
energy costs
regulatory costs
taxes |
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Term
| off-shoring disadvantages |
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Definition
higher total wage and indirect costs
coordination costs
increased inv
reduced responsiveness
cost of protecting intellectual property |
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Term
| Global products and brands should |
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Definition
standardize all products for all markets
reduce overall costs by spreading investments over a large market |
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Term
| Assumptions of a global product |
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Definition
homogenous customer needs and interests
people prefer lower prices at high quality
global markets produce economies of scale |
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Term
| Incorrect about assumptions of a global product |
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Definition
markets vary widely between nations
growing interests in many features
firms strategy should not be solely product driven |
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Term
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Definition
Global
Transnational
International
Multidomestic |
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Term
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Definition
high pressures to lower costs
low pressure for local adaptation
centralized and controlled from corporate office
standard products |
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Term
| Strengths of Global Strat |
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Definition
integration across business
economies of scale
uniform standards |
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Term
| Weaknesses of Global Strat |
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Definition
limited to adapt
increased dependence on one facility
high tariffs and trans costs |
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Term
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Definition
high pressures to lower costs
high pressure for local adaptation
seeks global competitiveness via trade offs
assets and capabilities disbursed to most beneficial areas |
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Term
| Strengths of Transnational Strat |
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Definition
economies of scale
adapts to local markets
locates activity in optimal locations
increased flow of knowledge and learning |
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Term
| Weaknesses of Transnational Strat |
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Definition
challenges in determining right locations
managerial challenges in fostering knowledge transfer |
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Term
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Definition
low pressures to lower costs
low pressure for local adaptation
requires diffusion and adaptation of the parent company's knowledge and expertise to foreign markets
goal is world wide exploitation of parent company's knowledge |
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Term
| Strengths of International Strat |
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Definition
leverage and diffusion of knowledge
lower costs because less tailored product |
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Term
| Weaknesses of International Strat |
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Definition
limited to adapt in local markets
in ability to take advantage of new ideas and innovations occurring in local markets |
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Term
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Definition
low pressures to lower costs
high pressure for local adaptation
emphasis on differentiation of product to adapt to local market
decentralized decisions
products tailored to local use
markets can expand rapidly |
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Term
| Strengths of Multidomestic Strat |
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Definition
ability to adapt to the market
ability to detect opportunities and attractive niches |
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Term
| Weaknesses of Multidomestic Strat |
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Definition
no economy of scale
greater difficulty in transferring knowledge
over adaptation |
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Term
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Definition
alternative to full globalization
commonalities of culture |
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Term
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Definition
exporting
licensing or franchising
strategic alliance or joint venture
wholly-owned subsidiary |
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