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Mgmt of Int Business > Chapter 6 > Flashcards

Chapter 6 Flashcards

1
Q

The name of Chapter 6

A

Entering Foreign Markets

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2
Q

liability of foreignness

A

The inherent disadvantage foreign firms experience in host countries because of their nonnative status

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3
Q

dissemination risk

A

The risk associated with the unauthorized diffusion of firm-specific assets

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4
Q

regulatory risk

A

Risk associated with unfavorable government regulations

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5
Q

obsolescing bargain

A

A deal struck by an MNE and a host government, which changes the requirements after the entry of the MNE

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6
Q

trade barrier

A

Barrier blocking international trade

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7
Q

tariff barrier

A

Taxes levied on imports

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8
Q

trade war

A

A country imposes tariffs or quotas on imports and other countries retaliate with similar forms of trade protectionism

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9
Q

nontariff barrier

A

Trade and investment barriers that do not entail tariffs

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10
Q

currency risk

A

Risk stemming from exposure to unfavorable movements of the currencies

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11
Q

currency hedging

A

A transaction that protects traders and investors from exposure to the fluctuations of the spot rate

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12
Q

strategic hedging

A

Spreading out activities in a number of countries in different currency zones to offset any currency losses in one region through gains in other regions

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13
Q

location-specific advantage

A

Advantage associated with operating in a specific location

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14
Q

agglomeration

A

Clustering economic activities in certain locations

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15
Q

first-mover advantage

A

Advantage that first movers enjoy and later movers do not

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16
Q

late-mover advantage

A

Advantage associated with being a later mover

17
Q

First-Mover Advantages Examples in the Text

A

Proprietary, technological leadership
- Apple’s iPhone

Relationships with key stakeholders such as governments
- Citigroup
- JP Morgan Chase

Avoidance of clashes with dominant firms at home
- Sony
- Honda

18
Q

Late-Mover Advantages Examples in the Text

A
  • Amazon free rides on Flipkart’s investment in educating customers in India
  • Tesla as well as BMW, GM, and Toyota wait until the Nissan Leaf resolves technical uncertainties
  • Greyhound is stuck with the bus depots, whereas Megabus simply uses curbside stops
19
Q

scale of entry

A

The amount of resources committed to foreign market entry

20
Q

nonequity mode

A

Mode of foreign market entry that does not involve the use of equity

21
Q

equity mode

A

Mode of foreign market entry that involves the use of equity

22
Q

ownership advantage

A

Advantage associated with directly owning assets overseas

23
Q

internalization

A

The process of replacing a market relationship with
a single multinational organization spanning both countries

24
Q

internalization advantage

A

Advantage associated with replacing a market relationship with an internal organization

25
Q

OLI advantages

A

Ownership, location, and internalization advantages, which are typically associated with MNEs

26
Q

entry mode

A

A form of operation that a firm employs to enter foreign markets

27
Q

turnkey project

A

Project in which clients pay contractors to design and construct new facilities and train personnel

28
Q

build-operate-transfer (BOT) agreement

A

A special kind of turnkey project in which contractors first build facilities, operate them for a period of time, and then transfer them back to clients

29
Q

research and development (R&D) contract

A

Outsourcing agreements in R&D between firms

30
Q

co-marketing

A

Agreements among a number of firms to jointly market their products and services

31
Q

joint venture (JV)

A

A “corporate child” is a new entity is jointly owned by two or more parent companies

32
Q

wholly owned subsidiary (WOS)

A

Subsidiary located in a foreign country that is entirely owned by the MNE

33
Q

greenfield operation

A

Building factories and offices from scratch (on a proverbial piece of “greenfield” formerly used for agricultural purposes)

34
Q

country-of-origin effect

A

The positive or negative perception of firms and products from a certain country

35
Q

LLL advantages

A

Linkage, leverage, and learning advantages, which are typically associated with MNEs from emerging economies

36
Q

reciprocity

A

An informal agreement based on mutual exchange of gratifications

37
Q

institutional void

A

Institutional conditions of a country lacking market-supporting infrastructure

Mgmt of Int Business (14 decks)

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