International business strategies Flashcards
what is globalisation
Globalization is a term used to describe how trade and technology have made the world into a more connected and interdependent place.
What is the liability of foreigness
is the inherent
disadvantage foreign firms experience in host
countries because of their outsider status.
advantages of globalisation
- economies of scale
- opportunity to benefit from skilled workers
disadvantages of globalisation
- increased competition
- environmental concerns.
- may face protectionist measures
what is pestle.
an framework which analyses the external environment.
Political
Economic
Social
Technological
Legal
Environmental
What is the CAGE framework
capture essential information you need to consider when entering a new market and highlight how big a difference there is between what you currently do and what you will need to do.
Cultural
Adminstrative
Geographic
Economic
name some examples of cultural differences found in the cage framework.
Language
Ethnicity
Religion
Values and social norms.
name some 3 examples of Administrative differences found in the cage framework
Trade Agreements
Currency translations
Legal System
Visas?
Name some examples of economic differences found in the cage framework.
Income per capita
minimum wage
interest rate
Name some geographical differences found in the cage framework.
Physical distance.
Boarder (Land or sea)
Climate
Timezones
Transportation
Limitations of the cage framework.
- focuses on the country rather than the market
- requires a lot of research.
how do countries expand internationally without losing their mojo
- Identify the dimensions of difference
- give everyone a voice
- train everyone in key norms
- Heterogenous everywhere. 9encourage diversity)
what are the advantages to being a first mover.
- stronger brand reputation
- create entry barriers for future competitors
- build relationships with stakeholders like suppliers or the government.
disadvantage of being a first mover
- uncertain demand
- high research and demand costs.
- copycat business may join the market and erode profits
benefit of being a late mover
- the advantage of learning from those who have moved earlier
what are the different modes of entry
- exporting
- franchising/ liscensing
- joint venture
- wholly owned subsidiary.
there is growing control and investment the further you go down the list.
what is a predator strategy
predator strategy” refers to a competitive approach where a company aggressively seeks to dominate or eliminate its rivals in the market.
methods of a predator strategy
- Predator pricing
- innovative and high investment into R&D
- vertical intergration
what is the difference between related and unrelated differentiation.
related- expanding into products or services with relationships to the existing business
unrelated- expanding into product or services beyond the current capabilities and value configuration, i.e. with no relationships to existing business.
when refering to geographical expansion what does limited international scope compared to extensive international scope mean.
limited international scope- French company expanding to Germany
extensive- french company expanding to China.
benefits and drawbacks of organic growth
+maintain control and profits
+easy integration
-slow and risky
- may face resource barriers
benefits and drawbacks of M&A
+fast access to new market and resources
-integration problems
-expensive
benefit and drawbacks of alliances
+Gradual/reversible move
+Limit involvement
+learning opportunities
-share profits
-may create a competitor
MNE / MNC definition
A multinational enterprise or corporation is a company that has business operations in at least one country other than its home country.
what is a DMNE
Developed Markets: These are countries that have reached a high level of economic development, typically characterized by advanced industrialization, high per capita income, and well-established infrastructure. Examples include the United States, Germany, Japan, and the United Kingdom.
What is an EMNE
Emerging markets typically have lower per capita income levels, developing infrastructure, and a growing middle class. They offer significant growth opportunities for investors due to their expanding consumer markets and untapped resources. Examples include China, India, Brazil, and South Africa.
Newly industrialised like singapore
what is the intergration responsiveness framework used for
The framework aims to help MNCs strike a balance between two conflicting pressures:
Global Integration: This refers to the extent to which a company seeks to standardize its operations and products/services across different markets.
Local Responsiveness: This refers to the ability of a company to adapt its products/services, marketing strategies, and operations to meet the specific needs and preferences of local markets.
name the 4 sections of the integration responsiveness framework
Global Transnational
International Localisation
describe the global intergration model
MNCs following this strategy prioritize global integration over local responsiveness.
They strive for standardization of products, processes, and marketing strategies across all markets to achieve economies of scale and cost efficiencies.
(McDonalds, Coke, Ikea)
describe transnational integration
They seek to leverage economies of scale and global synergies while also adapting to local market conditions and preferences.
(Toyota and samsung)
describe localised integration
focus on individual customer market needs
describe international strategy
prioritize global integration nor local responsiveness.
open innovation definition
collaborative research among various internal units and with external organizations
how does open innovation work in practice
- Aquire start ups
- strategic alliances with competitors
- hire top talent from other companies
barriers to open innovation
- cultural differences
- Trust and transparency issues. Some countries have weaker IPR regimes and unclear legal norms.
- discrepancies in risk appetite
what are weak signals
examples of weak signals
Weak signals are often early indicators of potential disruptions, market shifts, or emerging trends.
social media mentions, search engine data
what is dynamic pricing?
is a pricing strategy in which businesses adjust the prices of their products or services in real-time
what is SDG washing
sustainable development goals. “SDG washing” refers to the practice of misrepresenting or overstating the extent to which a company or organization contributes to the United Nations Sustainable Development Goals (SDGs) without genuinely aligning their activities with the goals.
global supply chains
global supply chains” refers to the cross-border organization of the activities required to produce goods or services and bring them to consumers through inputs and various phases of development, production and delivery.
why pollution environmental concerns may persist in a global supply chain
- MNCs place orders that exceed suppliers’ capacity or impose unrealistic deadlines.
- Most lower-tier suppliers are not well known, so they receive relatively little attention and pressure from the media, NGOs, and other stakeholders.
