Hoofdstuk 11 International Strategies

Question 1

Value of international strategies

Answer 1

Enable a firm to exploit environmental opportunities or neutralize environmental threats

Question 2

Potential sources of economies of scope

Answer 2

• To gain access to new customers for current products or services (preferences can vary, not all non domestic customers are able to buy the products due to inadequate distribution channels, trade barriers or wealth differences; make use of different phases in the life cycle in different countries; increase in sales leads to economies of scale)
• To gain access to low-cost factors of production (raw materials, labor, and technology)
• To develop new core competencies (learn from experiences, learn from international operations dependent on the intern to learn, the transparency of business partners and the receptivity to learning, and leverage this learning)
• To leverage current core competencies in new ways
• To manage corporate risk (hard for equity owners to do so internationally)

Question 3

The local responsiveness/international integration trade-off

Answer 3

Local responsiveness: addressing local needs of non domestic customers and increasing demand, expose traditional core competencies to new competitive situations, and detailed local knowledge to leverage traditional competencies.

International integration: economies of scale can only be fully exploited with tight integration across all the markets in which a firm operates

Question 4

Transnational strategy

Answer 4

Firms threat their international operations as an integrated network of distributed and interdependent resources and capabilities. A firm’s operations in each country are not simply independent activities attempting to respond to local market needs; they are also repositories of ideas, technologies, and management approaches that the firm might be able to use and apply in its other international operations

Question 5

Risks in pursuing international strategies

Answer 5

Financial risks: currency fluctuation and inflation
Political risks: changes in the political rules of the game can have the effect of increasing some environmental threats and reducing others

Question 6

Rarity of international strategies

Answer 6

Less rare: economies of scope, changes in the organization of the international economy help facilitate trade through an agreement, improvement in technological infrastructure, and emergence of various communication, technical, and accounting standards

Rare: resources and capabilities that a particular firm brings are rare

Question 7

Imitability of international strategies

Answer 7

• Direct duplication (Costly hen resources or capabilities are path dependent, uncertain or socially complex)
• Substitutes (everything is partial substitute)

Question 8

Organization of international strategies

Answer 8

• Market governance: Exporting (arm’s-length market relationship and limiting investment; low cost and limited risk exposure but few economies of scope)
• Intermediate market governance: Strategic alliances (all economies of scope but opportunistic behavior will increase because of distance and differences in practices and culture)
• Hierarchical governance: M&A (all economies of scope and more organizational control, but substantial investment and risk)