chapter 12 Flashcards
hierarchical mode
The firm owns and controls the foreign entry mode / organization
The sales representative resides in the home country of the manufacturer and travels abroad to perform the sales function
Domestic-based sales representative
An extension of a legal part of the manufacturer (often called a sales office)
Foreign branch
A local company owned and operated by a foreign company under the laws and taxation of the host country
Subsidiary
Main reasons for establishing local production (4)
- To defend existing businesses
- To gain new business
- To save costs
- To avoid government restrictions
degree interaction between sub and region vs. degree of value transfer to sub
- High intera. & high transf
- Low intera. & high transf
- High interac & low transf
- Low interac & low transff
- Integration
- Separation
- Assimilation
- Marginalisation
The regional HQ (lead country) will usually play the role of coordinating and stimulating sales in the whole region
Region centers
Integration and coordination of operations across national boundaries in order to achieve synergies on a global scale
Transnational organization
Acquire an existing company, rapid entry, access to distribution channels, existing managemetn and acquiring experience
Acquisition
building own operations from scratch, possibility to incorporate the latest technology, avoiding integration conflicts, costly
Greenfield
Three stratgic motives that affect HQ location
- Mergers and acquisitions
- Internationalization of leadership and ownership
- Strategic renewal
