Chapter 2 - Process of internationalization of the company Flashcards
Determinants for selection of target countries
- Factors related to the firm itself: market positioning, new product development
- Factors related to country: cost of productive factors, economic policy
- Factors related to industry: level of rivalry between companies, suppliers
definition of competitive advantage & factors
characteristics of a firm that differentiates it from others by placing it in a superior comparative position
- must be related to key success factor in market
- must be substantial to make a difference
- must be sustainable facing changes in environment
Porter’s diamond - condition factors
endowment of relevant & specialized production factors that are scarce and difficult to immitate
Porter’s diamond - home demand conditions
domestic demand gives their companies a clearer or earlier picture of the new needs of customers
Porter’s diamond - related & supporting industries
presence of other sectors that supply, collaborate or provide their services to the reference sector
Porter’s diamond - firm strategy & structure
inner rivalry pressures competitiveness
definition of industrial districts and clusters
agglomerations to firms connected by the same economic activity and located in a specific geographic environment
on advanced economies
- definition: postindustrial countries characterized by high per-capita income, highly competitive industries and well-developed commercial infrastructures
- who: Australia, Canada, Japan, New Zealand, USA, most European countries
- purchasing power, few restrictions on international trade & investment & host the world’s largest MNEs
on developing countries
- definition: low-income countries characterized by limited industrialization & stagnant economies
- Africa, most of south Asia, Latin America
- highly developed in historical/cultural terms but hindered by high infant mortality, malnutrition, short life expectancy, illiteracy
on emerging market economies
- former developing economies that have achieved substantial industrialization
- mainly in Asia, Eastern Europe, BRIC
- rapidly improving living standards & growing middle class with rising economic aspirations
on ethnological/silent language
cultures differ in the way they communicate through non-verbal means
- perception of time: sequential and scarce (germanic culture) fluid, circular (arabic culture)
- perception of space: social distance
- material goods: importance of financial wealth as a sign of status
- friendship: short, superficial
- agreement: western in writing, eastern verbal
- context
HOFSTEDE’S research power distance definition
extent to which people in certain societies accept inequality in power distribution
HOFSTEDE’S research individualism/collectivism definition
individuals look after their own or immediate relative interests
HOFSTEDE’S research uncertainty avoidance definition
ambiguity & unpredictability is not accepted and there is a continual search to codify, plan, regulate the environment
HOFSTEDE’S research masculinity/femininity definition
high value given to assertive, competitive behavior
