Chapter 7 Flashcards
Identify international opportunities
Increased market size
Return on investment
Economies of scale and learning
Advantage in location
International Strategies
International business-level strategy
Multi domestic strategy
Global strategy
Transnational strategy
Modes of Entry
Exporting Licensing Strategic alliances Acquisitions Establishment of a new subsidiary
International strategy
A strategy based on firms diffusion and adaptation of the parent company’s knowledge and expertise to foreign markets, used in industries where the pressures for both local adaptation and lowering costs are low.
Not concerned with modifying.
Example: Drugs, people that need them will buy them. Drug company doesn’t really modify them
Multi domestic Strategy
Provide products that are suitable for local markets
example: Americans bath once a day so buying shampoo is normal.
Global Strategy
Commodity (useful or valuable) products. Standardization
Transnational Strategy
Does both multidomestic and global. Standardized products but do have some modifications
Entry Modes of International Expansion
Exporting:
Exporting:
Producing goods in one country to sell to residents of another country
Fairly easy for the US
Entry modes of international expansion
Licensing:
Licensing: company receives a fee in exchange for the right to use its intellectual property
Entry modes of international expansion
Wholly owned subsidiary
Wholly owned subsidiary: a business in which a multinational company owns 100% of the stock.
Most risky
Degree of ownership and control from LEAST to MOST
Least: Exporting Licensing Franchising Strategic Alliance Joint Venture Wholly owned Subsidiary MOST
