Chapter 2 Flashcards
Mexican factories located along the US-Mexico border that receive preferential tariff treatment.
Maquiladoras.
International organization that promotes world trade by lowering barriers to the free flow of goods across borders.
World trade organization (WTO)
Free trade agreement between Canada, Mexico, and the US
NAFTA
European trade group that has 27 member states.
European Union.
Purpose or rationale for an organizations existence.
Mission
How an organization expects to achieve its missions and goals.
Strategy
Firms achieve missions in 3 conceptual ways:
Differentiation, cost leadership and response.
Creation of a unique advantage over competitors.
Competitive advantage.
Distinguishing the offerings of an organization in a way that the customer perceives as adding value.
Differentiation
Engaging a customer with a product through imaginative use of the five senses, so the customer “experiences” the product.
Experience differentiation
Achieving max value, as perceived by the customer.
Low cost leadership
Set of values related to rapid, flexible and reliable performance.
Response
Method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage.
Resource view
Way to identify those elements in the product or service chain that uniquely adds value.
Value-chain analysis
Method of analyzing the five forces in the competitive environment.
Five forces model
Method of determine internal strengths, weaknesses, and external opportunities and threats.
SWOT analysis
Activities of factors that are key to achieving competitive advantage.
Key success factors
Set of skills, talents, and capabilities in which a firm is particularly strong.
Core competencies.
A graphed link of competitive advantage, KSF’s and supporting activities.
Activity map
Transferring a firms activities that have traditionally internal to external suppliers.
Outsourcing
Theory which states that countries benefit from specializing in goods and services in which they have relative advantage and they benefit from importing goods and services in which they have a relative disadvantage.
Theory of competitive advantage.
Firm that engages in cross-border transactions
International business
Firm that had extensive involvement in international business, owning or controlling facilities in more than one country.
Multinational corporation
Strategy in which global markets are penetrated using exports and licenses.
International strategy
Strategy in which operating decisions are decentralized to each country to enhance local responsiveness
Multidomestic strategy
Strategy in which operating decisions are centralized and headquarters coordinates the standardization and learning between facilities.
Global strategy
Strategy that combines the benefits of global-scale efficiencies with the benefits of local responsiveness.
Transnational strategy.
Theory stating that if an external provider can perform activities more productively than the purchasing firm, then the external provider should do the work. Purchasing firm focuses on core competencies and drives outsourcing.
Theory of comparative advantage
Strategy that imports/exports or licenses existing product. Examples: US steel and Harley Davidson
International strategy
Strategy that standardized product, uses economies of scale, cross-cultural learning. Examples: Texas Instruments, caterpillar, otis elevator.
Global strategy
Strategy that uses existing domestic model globally, franchise, joint ventures, subsidiaries. Examples: Heinz, McDonald’s, Hard Rock Cafe
Multidomestic strategy
Strategy that moves material, people or ideas across national boundaries. Uses economies of scale, cross-cultural learning. Examples: Coca-Cola and nestle
Transnational strategy
