Exam Flashcards
Business model -
describes how an organization creates, delivers, and captures value. (How you make profit and how you are able to create value to outperform your competitors).
Resources are:
- Human
- Financial
- Intangible
- Tangible
RCOV model -
the business model concept generally refers to the articulation between different areas of a firm’s activity designed to produce a proposition of value to customers. Showing that any implementation of any business strategy should have 2 important pillars :
resources and capabilities
Canvas model -
how can we figure it out very simply all the necessary components to how the companies are creating value.
Left side:
- Key activities
- Partnerships - the ones which helps to create the product or service (key suppliers)
- Key resources (1. human resources, 2. tangible resources (they are losing value), 3. intagible resources (licenses, patents, knowledge), 4. financial)
- Costs
Right side:
- Customers (segments of customers)
- Channels (how does the product find the customer (online, physical store))
- Customer Relationships (how do I connect with potential and existing customers)
- Revenues
Globalization -
refers to the development of closer economic, cultural, and political relations among all the countries as a result of advances in transport and communications. Globalization can be seen as the growing interdependence of locations and economic actors across countries and regions.
Internationalization -
describes the process of designing products to meet the needs of users in many countries or designing them so they can be easily modified, to achieve this goal.
George YIP:
identifies and describes the key drivers of internationalization: market drivers, competitive drivers, cost drivers, government drivers.
Market drivers:
are customer needs and tastes become more common, the existence of global customers and transferable marketing between difference countries.
Cost drivers:
are scale economies, favourable logistics, and country specific differences.
Government drivers:
are numerous and include eliminate all tariff and non tariff barriers, liberalise trade policies, subsidies outlawed, ownership restrictions and technical standards compatible for all industries.
Competitive drivers:
are competitors’ global strategies and country interdependence.
Geopolitics -
the study of the impacts of geography on national policies and international relationships.
CAGE framework:
identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. A CAGE framework example of cultural difference is how the people of the new market will use and interpret the company’s offer.
According to CAGE:
- The more 2 countries differ across these 4 dimensions, the riskier the foreign market is.
- The more similarities there are, greater the potential of foreign market is.
According to Ghemawat:
The main goal of any international strategy is to manage the large distances that arise at the borders of any market and finding the right balance between economies of scale through standardisation and responsiveness to local conditions: adaptation.
Exportation -
The most direct way to benefit from international markets.
2 sub categories of exportation:
- Direct - direct contact between the exporter and the foreign customers: the company produces in their home market and then sells products to customers abroad.
- Indirect - - Exporter sells products to a third party (distributor) which then re-sells them within the foreign market. Entry mode widely used by smaller or less experienced businesses.
Licensing -
Contractual arrangements in which a licenser or franchiser allows a licensee or franchisee to use its intellectual property in return for a fee or royalty (+initial payment - sometimes).
Contract Manufacturing -
Agreement under which the manufacturer is contracting the production to another organization to produce on their behalf in the targeted foreign market.
Joint ventures -
An agreement between – at least - two companies joining temporarily to undertake a particular project. Basically a “1+1 = 3 process”: 2 organizations agree together to build and run a new company.
Strategic allience -
A non-equity cooperation agreement between two (or more) independent firms. Advantage: to gain mutual competitive advantage through cooperation in production, R&D, purchasing, marketing, or distributing.
Foreign direct investment by acquisition -
Providing immediate status of local company.
Providing market share (with established customer base), local market knowledge and pre-existing infrastructure, resources, and capabilities (supply chain, existing teams…)
Greenfield investment -
The ultimate and most risky entry mode. Where you start abroad from scratch: buy/rent the land, build the facilities, and operate the business. The costliest “entry market option”
Porter’s Diamond Model -
Model designed to help understand the competitive advantage that nations or groups possess due to certain factors available to them.
Diamond Model answers to 2 questions:
- Why does one nation become the most competitive for a certain industry?
- Why are companies from one country able to sustain competitive in a particular industry?
There are 4 factors that determine national advantage:
- Firm strategy, structure and rivalry
- Demand conditions
- Factor conditions
- Related and supporting industries
2 additional factors:
- Government
- Chance
Factor conditions:
Resources (human, natural, etc.)
Two types of resources:
- Basic: basic resources (unskilled labour and natural resources) THIS DON’T CREATE COMPETITIVE ADVANTAGE
- Advanced: skill labor, specialist capital
Demand conditions:
Home market demand. The more demanding the home market the greater the pressure on companies to innovate and improve.
Related and Supporting industries:
The success of one industry can be dependent of the success of related industries or suppliers
Firm, strategy, structure and rivalry
It is important to be competitive. For example, rivalry causes a drive to innovate.
