1) international trade

2) importing

3) exporting

4) international investments

5) international portfolio invesment

6) foreign direct investments

-seek opportunities for growth (mkt diversification)

-earn higher margins

-gain new ideas about products

-better serve key customers

-be closer to supply sources

-gain access to lower-cost factors of production

-develop economies of scale

-confront international competitors

-invest in relationship with foreign partner

1) worldwide reduction of barriers to trade and investment

2) transition to mkt-based economies and adoption of free-trade in China, Soviet Union etc

3) industrialization

4)integration of world financial markets

5) advances in technology

1) integration and interdependence of national economies

2) rise of regional economic integration blocs

3) growth of global investment and financial flows

4) convergence of buyer lifestyle and preferences

5) globalization of firms production activities

1) focal firm:initiator of an int'l business transaction including MNEs and SMEs, conceives, designs, and produces the offerings intended for consumption by customers

2) distribution channel intermediary: specialist firm, provides logistics and marketing services

3) facilitator: firms with special expertise in legal advice, banking, customs clearance etc.

a) licensor: firms enters contractual agreement with a foreign partner

b) franchiser: firm that grants another the right to use an entire business system in exchange in $$

c) Turnkey contractor: focal firms that plan, finance, organize, manage project and then hand it over to a foreign market

FDI-based explanations (fdi stock= total value of assets of MNE)

-monopolistic: controls 1+resources, mon. relative to mkts and     competitors

-internalization: acquires 1+ value-chain activities

-Dunnings Eclectic Paradigm:ownership, location, internalization

Non-FDI-based explanations

-international collaborative: cooperation between 2+ firms

-networks and relational assets: stock of the firms economically benefical LT relationships

Porter Diamond Model= competitive advantage orginates from presence and quality in the country of

1) firm strategy, structure, rivalry: nature of domestic rivalry and conditions in nation that det. how firms are created, organized, managed

2) factor conditions: nation's position in factors of production

3) demand conditions: nature of home-market demand for specific products

4) related and supporting industries: suppliers etc. that excel in particular industries

1) developing products and services

2) communicating and interacting with foreign business partners

3) screening and selecting foreign dist. and other partners

4) negotiating and structuring int'l bus. centers

5) interacting w/ current & potential customers from abroad

6) preparing for overseas trade fairs and exhibitions

7) preparing advertising and promo materials

ex. role of customer much higher in Japan

country risk: exposure to potential loss or adverse effects on company operations/ profitability caused by developments in a country's political/ legal environment

examples:

-gov't intervention, protectionism, barriers to trade

-bureaucracy, redtape, administrative delays

-lack of legal safeguards for intellectual property rights

-legislations unfavorable to foreign firms

-economic failures and mismanagement

-social and political unrest/ instability

-proactive environmental scanning

-strict adherence to ethical standards

-allying with qualified local partners

-protection through legal contracts

-safeguarding intellectual property rights

-research to gather knowledge & intelligence

-choose most appropriate entry strategies

-take advantage of foreign trade zones

-seek favorable customs classifications for exported products

-take advantage of investment incentives & other government support programs

-lobby for freer trade and invesment

-free trade area

-customs union

-common market

-economic union

-EU

-EFTA

-NAFTA