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International Management > 10 Alternative Modes Of Internationalization > Flashcards

10 Alternative Modes Of Internationalization Flashcards

1
Q

Alternative modes of internationalization

A

1) licensing
2) turnkey
3) joint venture

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2
Q

Licensing and two forms of it

A

Licensing: monetize trademarks and other IP used by independent businesses
- franchising: achieve expansions of brand through franchised locations that maintain and operate under uniform systems, standards, and brand
- license IP (intellectual property): e.g. licensing patents (R&D)

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3
Q

Franchisor vs franchisee

A

Franchisor: company (McDonalds)
Franchisee: you (opening another location)

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4
Q

Turnkey and a special case of it

A

Turnkey contract: for profit operation that’s ready to use (delivering big installations: e.g. hospitals, factory)
- BOT (build, operate, transfer)
E.g. Pont Vasco da Gama: consortium of companies BUILD bridge, have right to OPERATE for 25 yrs & then TRANSFER to state

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5
Q

Joint venture and special case of it

A

2+ patties pool resources to accomplish task (project/other business activities) - everyone responsible profit, losses, costs
- consortium: looser agreement, collaborate only for project (airbus and Boeing formed airbus to build commercial planes in Europe)

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6
Q

What forces managers to apply marketing rules in a differentiated manner?

A

Differences be domestic and international environment

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7
Q

What forces managers to apply marketing rules in a differentiated manner?

A

Differences be domestic and international environment

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8
Q

What leads to problems arising in international marketing

A
  • neglecting differences bw environments
  • interpreting incorrectly detected differences
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9
Q

Global brand vs global company

A

1) global companies normally have global brands (nespresso)
2) global companies may also have local brands (esp FMCG: Nestum)
3) international companies may have global brands (SOGRAPE - owner of Mateus rose, CHANEL No5., Rolex - only produces in Switzerland)

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10
Q

Chanel no 5 as a global brand

A
  • 100 yrs
  • founder Gabrielle Chanel
  • breakthrough: new style of adv: film stars and moments of life
  • ad campaigns over the decades: products to people to lifestyles
  • movie industry inspired: big stars, great film directors, fat budgets
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11
Q

Disadvantages standardization

A
  1. message translation: difficult due to word/phrase specificity (esquimos have 30 words for snow)
  2. legal constraints: ads that aren‘t legal in some countries (e.g. alcohol)
  3. moral standards: some campaigns: highly critiqued in some countries (body exposure problem in Denmark, not in US)
  4. message content: certain promotional theme might not workout in some countries while being successful on others (food ads: Europe-tase, US-convenience) (house appliances: EU - quality, US: novelty)
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12
Q

Promotion policy

A

Types of messages, to whom they are addressed, way they are presented differ according to country

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13
Q

Push pull strategy

A

PUSH: put loads of ads to sell
PULL: receive attention automatically (apple)

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14
Q

What influences the push-pull strategy - promotion policy

A
  1. type of distribution system
  2. cost/availability of media to reach target segments
  3. consumer attitude towards information source
  4. product price as percentage of income
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15
Q

Standardization advantages - promotion policy

A
  1. cost reduction
  2. prevents international customers from getting confused by diff messages
  3. accelerates products penetration rate on target markets
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16
Q

Example standardization

A

All same product: Persil - Omo - skip

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17
Q

Branding policy - what is a brand

A

Label used to identify products or services

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18
Q

Branding policy - what is a brand

A

Label used to identify products or services

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19
Q

Typical decisions on branding policy - 1) to have or not have a brand

A
  • Investment needed to properly manage brand
  • consider not having brand (especially early stages of development)
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20
Q

Producer brand or independent brand difference

A

e.g. Coca Cola (als Getränk hat selben Namen) oder sprite

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21
Q

Typical decisions on branding policy: 2) producer brand or independent brand:

A
  • independent brand might protect companies reputation
  • producer brand: better recognition w/ smaller investment
22
Q

Typical decisions on branding policy: 3) only one or several brands

A
  • more brands: allows for better fit to market segments BUT higher investment (to make them recognized by target market segments)
23
Q

Typical decisions on branding policy: 4) one international brand or several local brands

A

Decision impacted by international environment

24
Q

Factors against branding policy harmonisation

A
  1. linguistic factors
  2. acquired brands
  3. the CcO effect (country of origin)
  4. generic or almost generic names
25
Q

Companies typical decisions on branding policy

A
  1. to have/not have a brand
  2. producer or independent brand
  3. only one brand or several brands
  4. one international or several local brands
26
Q

Factors against branding policy harmonisation: linguistic factors

A

Some words have very different meanings from country to country
- fermented milk drink „Kowpis“

27
Q

Factors against branding policy harmonisation: acquired brands

A
  • when expand international through acquisitions, might acquire highly appreciated local brands
    -> discarding that brand might have negative impacts on sales/other indicators (nestle acquired well established brazilian milk brand longs Vida and kept its name)
28
Q

Factors against branding policy harmonisation: the CcO effect (Country of origin)

A

Products can be positively or negatively affected by their country of origin
MADE IN EFFECT

29
Q

Factors against branding policy harmonisation: generic or almost generic names

A

-if brand name is a groups of products, company who owns that brand might loose legal protection
- defining something as a group for products and as a brand differs - Swiss Army knife is protected brand in EU, not in US

30
Q

When export and import not sufficient

A
  • cheaper to produce abroad
  • transportation costs too high
  • domestic capacity not enough
  • products/services need altering (e.g. whirlpool in us/eu)
  • trade restrictions hinder imports (e.g. sumol and compal in Angola)
  • country of origin becomes an issue
31
Q

Why companies opt for FDI (examples of industries where this is then case)

A

When business is the „experience“ and location is crucial
- physical retail
- hospitality & tourism
- physical restaurants

32
Q

Forms of ownership of foreign production

A

M&A investment
Leasing
Greenfield investment

33
Q

Critical techworks: 50/50 critical software, BMW: example for what

A

Joint venture

34
Q

Two forms of collaborative equity arrangements vs two forms of collaborative non-equity arrangements

A

1) joint venture
2) equity alliance
VS
1) licensing
2) franchising

35
Q

Equity alliance

A

Company purchases equity percentage of other company

36
Q

Ahold delhaize owning 49% of pingo doce and JM owning 51% is what form of ownership?

A

Equity alliance

37
Q

Five forms of collaborative non equity arrangements

A
  1. licensing
  2. franchising
  3. management contract
  4. turnkey operation
  5. non-equity alliance
38
Q

Coca Cola licensing industrial production, bottling and distribution is what kind of non-equity arrangements?

A

Licensing

39
Q

McDonald’s is what kind of non equity arrangement?

A

Franchising

40
Q

Management contract - collaborative non equity arrangement

A

Separate enterprise manages business for a fee
-> not just selling method of doing things but actually doing them

41
Q

Management contract - collaborative non equity arrangement

A

Separate enterprise manages business for a fee
-> not just selling method of doing things but actually doing them

42
Q

Paying a fee to third parties to explore locations is what kind of collaborative non equity arrangement?

A

Management contract

43
Q

Paying a fee to third parties to explore locations is what kind of collaborative non equity arrangement?

A

Management contract

44
Q

Melia: has construction companies to build infrastructures for the hospitality business: what kind of collaborative non equity arrangements is it?

A

Turnkey operations

45
Q

Non equity alliance

A

2+ companies aiming to achieve common objective
-> but no new equity entities is formed; both still independent

46
Q

Tap being part of Star alliance is an example of what collaborative non equity arrangement?

A

Non-equity alliance

47
Q

Motives for collaborative arrangements - general

A
  • reduce costs
  • specialize in competetencies
  • avoid/counter competition
  • learn
48
Q

Motives for collaborative arrangements - specific to international business

A
  • location specific assets
  • overcome legal constraints
  • diversify geographically
  • minimize exposure to risky environments
49
Q

Objectives international business

A
  • sales expansion
  • resource acquisition
  • risk reduction
50
Q

What forms of alternative expansion did pestana group choose?

A

joint ventures
Wholly owned
Management contract
License

International Management (10 decks)

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