Can You Explain the Strategy of International Business Flashcards

Actions taken by managers to achieve company goals (maximizing value and returns to shareholders)

1) increase profitability: reducing costs, adding value to increase prices of products 2) increase profit growth: selling more products in current market, entering new markets

1) low cost strategy: decreasing costs of production 2) differentiation strategy: setting apart their g/s from those of their competitors, increasing attractiveness of products

To maximize profitability, a firm must: a) pick a position on the efficiency frontier with sufficient demand b) configure internal operations to support that position c) right organization structure to execute strategy

-design, creation, delivery; marketing; support and after sale service
-R&D (design, creation), production (creation of g/s), marketing and sales (brand positioning and advertising), customer service (after sale service and support)

-inputs that allow primary activties to occur -information systems (managing inventory, tracking sales, pricing roducts, selling products) -logistics function (controls transmission of physical materials through value) -human resource (skilled workers to perform; identify, recruit, develop skilled managers) -company infrastructure (organizational structure, control systems, culture of the firm)

- totality of a firm's organization -organizational structure (division of organization into subunits, location of decision making responsibilities, establishment of integrating mechanisms) -controls and incentives(measures performance of subunits and rewards managerial behavior) -processes(how decisions are made and work is performed) -culture (norms and value sstems) -people (type of people who work at the organization)

1) expanding the market 2) realize location economies 3) realize greater cost economies from experience effects 4) leveraging subsidiary skills

-take g/s developed at home and sell them internationally -core competence- skills within the firm that competitors cannot easily copy or imitate

-enables firms to reduce costs and create perceived value -source of a firm's competitive advantage -important for firms to transfer core competencies to foreign markets

-performing value creation activity in the optimal location -low cost strategy- lowers costs of value creation and helps the firm achieve low cost position -differentiation strategy- enables firms to differentiate product offerings -global web- value added is maximized or costs of vale creation are minimized

- experience curve- reductions in productions costs that have been observed to occur over the life of a product -learning effects- cost savings that come from learning by doing -economies of scale- reductions in unit cost by producing large volume of a product (b/c of ability to spread fixed costs over large volume, large market size, increase in bargaining power with suppliers)

-valuable skills are developed at home and tranferred to foreign operations -valuable skills can arise anywhere in global network -establish incentive system to encourage emploees to acquire new skills -process for identify new skills -transferring skills within firm

-low cost pressures occur when competitiors are based in low cost locations, there is persistent excess capacity, and consumers face low switching costs (serve universal needs) -local responsiveness pressures occur b/c of difference in tastes and pressures, infrastructure, distrubtion channels, host gov't demands

International, transnational, global standardization, localization