Global Level Strategy

Question 1

What does international trade mean?

Answer 1

Exchange of goods and services between countires

Question 2

What does foreign direct investment mean?

Answer 2

Owning part of a company in another country.

Merger or acquisition.

Question 3

What are the different patterns of internationalisation?

Answer 3

Sheltered industries

Trading Industries

Multi-domestic industries

Global industries

Question 4

Explain sheltered industries

Answer 4

Low FDI and Low IT

Railroads, hairdressing, diary.

Localised, small-scale perishable and difficult to move.

Question 5

Explain trading industries

Answer 5

Low FDI and High IT

Aerospace, airline, agriculture

Transportable, large scale of economies.

Question 6

Explain multi domestic industries

Answer 6

High FDI and Low IT

Packaged groceries, hotels, international chain of restaurants

Products are national differentiated, internationalised through direct investment.

Question 7

Explain global industries

Answer 7

High FDI and High IT

Automobiles, Oil, Semi-conductors

Large scale manufacturing companies, trade and direct investment is important.

Question 8

What is Porter’s Diamond Framework?

Answer 8

How industries within a country develop resources and capabilities to develop an international competitive advantage.

Question 9

Explain the elements of Porter’s Diamond Framework.

Answer 9

Factor conditions
• Highly specialised home-grown resources and capabilities

Related supporting industries
• Industries that support your business

Demand conditions
• Is there a demand for the product?
This is important as customers drive
quality and innovation.

Strategy, structure, and rivalry
• How firms interact with a domestic market.

Question 10

What are the benefits of global strategy?

Answer 10

Cost benefits of scale and replication 
Serving global customers
Exploiting national resources (very important)
Learning benefits (very important)
Competing strategies (very important)