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International Strategic Mangement > ISM > Flashcards

ISM Flashcards

1
Q

Strategic Alliance

A

+ Share risk and costs
+ Access complimentary resources and distribution networks
- Learning race

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2
Q

Solutions to learning race

A
  • Well defined learning area
  • Different physical location
  • Create alliance specific advantages
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3
Q

M&A

A
  • Full and direct control of foreign market

- Net cost of M&A must be lower than cost of FD and SA

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4
Q

Problems of M&As

A
  • Cost of integrating targets underestimated
  • Benefits are overestimated
  • Synergie fail
  • Managerial Hubris (they can run it better than current)
  • Empire-building theory (managers want more power)
  • Entrenchment theory (key employees)
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5
Q

4 types of Managers

A
  1. Global business managers - the top, strategists
  2. Country managers - sense local opportunities
  3. Functional managers - specialists
  4. Corporate managers - overall leaders
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6
Q

Reduce agency costs

A
  1. The carrot - incentives

2. The stick - Internal and external monitoring

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7
Q

How to create competitive advantage

A
  1. Market-based ‘Outside in’

2. Resource based ‘Inside out’

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8
Q

5 Market forces Porter

A
  1. Entry
  2. Rivalry
  3. Substitutes
  4. Powerful buyers
  5. Powerful suppliers
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9
Q

How do resources create a competitive advantage?

A
  1. Valuable - generate value
  2. Rare
  3. Inimitable
  4. Non-substitutable

VRIN

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10
Q

Isolating Mechanisms

A
  1. Impediments to Imitation

2. Early-mover advantage

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11
Q

Impediments to imitation

A
  • Legal
  • Economies of scale
  • Greater access to inputs and customers
  • Intangible barriers
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12
Q

Early Mover Advantage

A
  • Learning Curve
  • Reputation/Buyer Uncertainty
  • Buyer Switching Costs
  • Network effect
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13
Q

Characteristics of Innovation

A
  1. Type (Product, Process, Service etc)
  2. Level (Radical vs Incremental)
  3. Location (Architectural vs Component)
  4. Effect (Enhancing vs Destroying)
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14
Q

The Assignment Issue

The Multi-Domestic Organisation

A
  • Few global managers from dominant nationality

- Local personnel progress within subsidiary

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15
Q

The Assignment Issue

The Global Design

A
  • Multi-cultural managers move around

- Managers integrate local personnel aspiring to a global career.

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16
Q

Characteristics for Expat success

A
  • Tolerence of ambiguity
  • Flexibility of behaviour
  • Non-judgmentalness
  • Meta-communication skills
  • Goal-orientation
  • Empathy
  • Sociability
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17
Q

Types of Expat

A
  1. Flight (the Isolated expat)
  2. Fight (the Militant expat)
  3. Follow (the assimilated expat)
  4. Fit (the Cosmopolitan expat)
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18
Q

The localisation issue

A

The need to recruit and motivate local personnel.

  • Helps break the language barrier
  • Necessary by host government
  • Cost reducing
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19
Q

Market Strategy includes…And is about…

A

All voluntary Economic Transactions

  • Porter: Positioning against 5 market forces
  • Barney: Aquiring/Accessing VRIN resources and capabilities
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20
Q

Theory of non-market strategy focuses on…

A

Using Institutional differences

21
Q

Elements of the non-market

A
  1. Institutions
  2. Issues
  3. Interests (stake-holders)
  4. Information
22
Q

Why is a non-market strategy required?

A

Market is entirely voluntary actions. Non-market is partially voluntary but also involuntary. Thus, firm without a non-market strategy may be at a competitive disadvantage

23
Q

How the non-market impacts firm behaviour

A
  1. Fiscal (race to the bottom)
  2. Legal (regulations)
  3. Political (governmental politics, activists)
24
Q

How business impacts the non-market

A

Called Corporate Political Strategy

  1. Financial Incentives Strategy (political contributions)
  2. Constituancy-building strategy (together with other affected firm to have more influence)
  3. Information Strategy (lobbying)
25
Q

Why has globalisation paused?

A
  1. The financial crisis

2. Increased Social Rejection; nationalism, inequality, war and immigration

26
Q

Further challenges ahead

A
  • AI
  • Climate change (1bn refugees by 2050)
  • Debt level
27
Q

What is strategy?

A

An integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantage.

28
Q

Export Model

A
  • Differentials in price and/or demand is exploited

- Cost of supply = transportation costs

29
Q

Multi-national model

A
  • Operations replicated abroad, saves transportation costs

- Customers pay foreign prices for domestic goods

30
Q

The Global Model

A
  • The firm splits up the supply chain to exploit differentials in price demand and costs.
31
Q

Localisation advantages

A
  1. Proximity
  2. Flexibility
  3. Quick response time
32
Q

Causes of globalisation

A
  • Political (free trade + deregulation)
  • Technological factors (travel + coms cost reduced, economies of scale)
  • Social (linguistics standards, cultural convergence)
  • Competitive standards
33
Q

Advantages of internationalising

A
  • Cost benefit
  • Revenue benefit
  • Learning benefit
  • Arbitrage benefit
34
Q

DIsadvantages of internationalising

A
  1. Liability of foreignness
  2. Localisation Advantages
  3. Location-bound advantages
35
Q

Why don’t all countries specialise and investment cluster

A
  • Market distortions (taxes, regulations, tarrifs)

- Lack of perfect information

36
Q

The Upsala Model

A

Firms first establish operations domestically. Then export to nearby countries. Only after several years abroad to they establish wholly or partially owned operations abroad. Gradually commit.

37
Q

Born Global

A

Firms that export immediately after being established. Succeed without established home base

38
Q

Elements of country attractiveness

A
  1. Country Risk Analysis
  2. Market Opportunities
  3. Industry Opportunities
39
Q

Country Risk Analysis

A
  • Political risk
  • Economic risk (exchange rates, inflation)
  • Competitive risk (corruption, cartels)
  • Operational risk (infrastructure, regulations)
40
Q

Market Opportunities

A

Market size, growth and quality

41
Q

Industry Opportunities

A
  • Resource Endowments

- Investment incentives.

42
Q

What is CSR

A

Encourages firm to comply with the spirit rather than the rule of law.

43
Q

The Economic side

A

Maximise shareholder value. Managers who do not make anti-social decisions will be replaced. Pro-social behaviour if: branding, first-mover advantage, prevents gov from interfereing.

44
Q

Transaction costs

A
  1. Search & Information costs
  2. Bargaining
  3. Policing and enforcement costs
45
Q

Level of transaction cost depends on:

A
  1. Asset specificity (redeployed)
  2. Uncertainty/Complexity (blueprints)
  3. Frequency of use
46
Q

Foreign Distributors

A
  • “Beachhead strategy”

- Low risk

47
Q

Should the firm internationalise?

A

Are its FSA’s location bound

48
Q

IR strategy

A
  1. Global
  2. International
  3. Transnational
  4. Multi- domestic
49
Q

Organisational form

A
  1. Global Functional Model
  2. Geographic Model
  3. Single Matrix model
  4. The Multi-business global product model
  5. The Multi-business geographic model
  6. The Multi-business matrix model

International Strategic Mangement (1 decks)

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