International strategy

Question 1

Reasons for international strategy

Answer 1

• extend product lifecycle
• Access to raw materials and lower production costs
• Integrate operations onto a global scale
• Access to emerging consumer markets
• Opportunities to better use rapidly developing technologies

Question 2

Benefits of internationalisation

Answer 2

Increased market share
Return on investment
Economies of scale and learning
Location advantages

Question 3

4 features of Porters diamond model

Answer 3

factor conditions
firm strategy, structure and rivalry
Home demand conditions
Relating and supporting industries

Question 4

3 types of international corporate level strategies

Answer 4

• Multi domestic strategy
• Transnational strategy
• Global strategy

Question 5

Multi-domestic strategy

Answer 5

Strategic and operating decisions decentralised to allow businesses in each country to customise to their own market

Question 6

Global strategy

Answer 6

Standardisation across markets, controlled by home country

Question 7

Transnational strategy

Answer 7

Close global co-ordination alongside local flexibility

Question 8

(Entry mode) Characteristics of exporting

Answer 8

High cost
low control and customisation

Question 9

(Entry mode) Characteristics of licensing

Answer 9

Low cost
Low risk
Little control
Low returns

Question 10

(Entry mode) Characteristics of alliances

Answer 10

Shared costs, resources and risk
Integration issues

Question 11

(Entry mode) Characteristics of Acquisitions

Answer 11

Quick access to new markets
High cost and complex
Issues integrating operations

Question 12

(Entry mode) Characteristics of wholly owned subsidiary

Answer 12

Complex
Costly
High risk
Potential high profitability
100% control