Chapter Nine

Question 1

Globalization

Answer 1

A process of closer integration and exchange between different countries and peoples worldwide

Question 2

Multinational Enterprise

Answer 2

Deploys resources and capabilities in the procurement prediction and distribution in at least two countries

Question 3

Foreign direct investment

Answer 3

Investments in value chain activities abroad

Question 4

International strategy

Answer 4

To sustain a competitive advantage. Competing against foreign and domestic companies around the world

Question 5

Porter’s diamond framework

Answer 5

Measures the ability of companies in an industry shoes origin is in a particular country to be successful in the international area

Question 6

Factors of Porter’s Diamond

Answer 6

Factor conditions, demand conditions, related and supporting industries, and strategy, structure and rivalry

Question 7

Factor Conditions

Answer 7

Importance of local and specialized resources, especially developed rather than natural endowments (Hollywood being local to skilled labor)

Question 8

Related and supporting industries

Answer 8

Competitive advantage occurs with local inputs (cluster strength in computers and computer softwares)

Question 9

Demand conditions

Answer 9

Fussy domestic customers drive quality and innovation (Swiss watches may be attributed to the obsessive punctuality of the Swiss)

Question 10

Strategy, structure, and rivalry

Answer 10

Strong domestic rivalry drives innovation, efficiency, and improvements (success of Japanese auto bc nine companies in Japan)

Question 11

Four global strategies

Answer 11

International strategy, multi domestic strategy, global-standardization strategy, and transnational strategy

Question 12

International strategy

Answer 12

Leveraging home-based core competencies, selling same product in both domestic and foreign markets

Question 13

Multidomestic strategy

Answer 13

Maximize local responsiveness. Consumers will perceive them to be domestic companies (Netflix customizes programming of channels to different countries)

Question 14

Global-standardization strategy

Answer 14

Economics of scale and location economics. Pursuing a global division of labor on best-of-class capabilities reside at the lowest (changing language to match local)

Question 15

Transnational strategy

Answer 15

Combination of localization strategy (high responsiveness) with global standardization strategy (lowest cost position attainable) (Mcdonalds uses brand name but makes concessions to local tastes too)

Question 16

CAGE Framework

Answer 16

Cultural, Administrative, Geographic, and Economic evaluations

Question 17

Cultural

Answer 17

Different religions, languages, ethnicities,. Lack of mutual trust. Lack of social network

Question 18

Administrative

Answer 18

Lack of shared currency. Lack of colonial ties. Lack of trade or political association

Question 19

Geographic

Answer 19

Absence of common borders or communication links. Different timezones and there is a physical distance

Question 20

Economic

Answer 20

Different per capita incomes. different cost structures