Chapter 8 - MGMT 466

1. extends a product life cycle
2. gain easier access to raw materials
3. opportunites to integrate operations on a global scale
4. opportunites to better use rapidly developing technologies
5. gain access to consumers in emerging markets

1. increased market share 2. economies of scale and learning
3. location advantages

1. identify international opportunites (basic benfits: increased market size, econ of scale/learning, locational adv)
2. explore resources & capabilities (international strategy: either international business-level strategy OR corporate: multidomestic, global, or transnational strategy)
3. use core comps (modes of entry: exporting, licensing, strategic alliances, acquisitions, new wholly owned subsidiary)
4. management problems and risk
5. strategic competitiveness outcomes: improved performance OR enhanced innovation

Strategy through which the firm sells its goods/services outside its domestic market

1. Factors of production
2. Demand conditions
3. Related and supporting industries
4. Firm strategy, structure, and rivalry
Surrounding components:
Informal institutions - culture; Formal institutions - regulatory; Political

International strategy in which strategic and operating decisions are decentralized to the strategic business units in individual countries or regions for the purpose of allowing each unit the opportunity to tailor products to the local market need for local responsiveness: high
need for global integration: low

International strategy in which a firm's home office determines the strategies business units are to use in each country or region
need for local responsiveness: low
need for global integration: high

International strategy through which the firm seeks to achieve both global efficiency and local responsiveness
need for local responsiveness: high
need for global integration: high

Liability of foreignness and regionalization

Set of costs associated with various issues firms face when entering foreign markets; include unfamiliar operating environments; econ, admin, and cultural differences; challenges of coordination over distances (four distances: cultural, admin, geographic, econ)

Entry mode through which the firm sends products it produces in its domestic market to international markets characteristics: high cost, low control

Entry mode in which an agreement is formed that allows a foreign company to purchase the right to manufacture and sell a firm's products within a host country's market or a set of host countries' markets characteristics: low cost, low risk, little control, low returns

Collaboration with another company in a different setting in order to enter one or more international markets characteristics: shared costs, shared resources, shared risks, problems of integration (ex. two corp. cultures)

Entry mode through which a firm from one country acquires a stake in or purchases all of a firm located in another country characteristics: quick access to new markets, high costs, complex negotiations, problems of merging with domestic operations

Entry mode through which a firm invests directly in another country or market by establishing a new wholly owned subsidiary characteristics: complex, often costly, time consuming, high risk, maximum control, potential above-average returns