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KEYWORDS Flashcards

1
Q

Home country advantages

A

Country-specific advantages that a firm has by virtue of the fact that it was founded in a specific country

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2
Q

Host country location advantages

A

The advantages from operating in the host country

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3
Q

Market seeking

A

Search for new customers and new markets

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4
Q

Resource seeking

A

Search for new resources such as physical or Human Resources, in the host country

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5
Q

Efficiency seeking

A

Search for efficiency, from scope or scale economies, technology or regulation

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6
Q

Strategic asset seeking

A

Search for assets such as core technology, up- or downstream knowledge, or reputations resources

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7
Q

Uppsala

A

Describes entry as a process

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8
Q

Born global

A

Firms can directly enter even very distant markets almost immediately without having to build a domestic base

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9
Q

Generic country attractiveness framework

A

Identifies risks and opportunities at the country, market and industry level

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10
Q

Country risk analysis

A
  1. Political risks
  2. Economic risks
  3. Operational risks
  4. Cultural risks

The point? To understand that there is no place like home

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11
Q

Market opportunities

A
  1. Market size
  2. Market growth
  3. Market quality
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12
Q

Industry opportunities

A
  1. Industry competitive structure
  2. Resource endowment
  3. Investment incentives grated by government
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13
Q

CAGE model

A

Firms from developed countries have less difficulty entering developed countries

Cultural distance
Administrative and political distance
Geographic distance
Economic distance

Closer countries are more attractive

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14
Q

Alliances

A

More favorable in the face of high environmental uncertainty and knowledge dispersion because collaborations increase strategic flexibility and rapid learning

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15
Q

Acquisitions

A

Better in situations with less need for strategic flexibility and when the transaction aims to utilize sustaining economies of scale and scope efficiently

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16
Q

Business strategy

A

Concerned with HOW a firm competes with a particular market

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17
Q

Corporate strategy

A

Concerned with WHERE a firm competes i.e. the scope of its activities

Dimensions of scope;
- vertical scope
- geographical scope
- product scope

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18
Q

Transaction cost economics

A

Dedicated to answering the question of where a transaction should take place; internally or externally

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19
Q

Types of transaction costs

A
  1. Search and information costs
  2. Bargaining costs
  3. Policing and enforcement costs
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20
Q

Bounded rationality

A

The decision making is bounded by uncertainty

21
Q

Bounded reliability

A

Homo economicus is assumed to be a self interested individual

22
Q

Level of transaction costs

A
  1. Asset specificity
  2. Uncertainty / complexity
  3. Frequency
23
Q

Strategic alliances

A

Formal arrangements between otherwise independent firms, who pool resources, to achieve a mutually agreed goal

24
Q

Joint venture

A

Partners form a jointly owned enterprise to peruse the goals of the alliances

25
Problems with M&A
1. Costs of integrating the target are often underestimated 2. Expected benefits from the deal are often overestimated
26
Forces for globalization
- cost benefit of scale - serving global customers - learning in multiple national environments
27
Forces for nationalization
- transportation and communication costs arising from geographical distance - differences in customer needs and behavioral norms
28
The global functional model
Worldwide centralization at functional level; global R&D, global marketing, global HRM. All strategic decisions are made at HQ level
29
The geographical model
Worldwide decentralization of decision making; European manager, North American manager Strategic decisions are made at the regional level
30
The single matrix model
Equal power is given to both function and geography; European manager & global R&D manager
31
Multi-business global product division model
Product managers are given full strategic and operational responsibilities for their product line across territories; global pens manager, global sticky-tape manager
32
Multi-business geographic model
Country managers act autonomously and are given full strategic and operational responsibilities for all product lines in their territory
33
Multi-business matrix model
Shared power; function, region, product
34
Agency costs
Losses that are made when the agent fails to act fully in the interest of the principal, increase; 1. Uncertainty 2. Information asymmetry
35
Corporate governance
The system of mechanisms, processes and relations used to control and direct a firm
36
Industry-based view
Suggest that the firm must position itself against five external environmental forces; - threat of rivalry - threat of substitutes - threat of new entrants - power of suppliers - power of buyers And competitive advantage comes from the firm’s ability to structure itself to face this
37
Resource-based view
Focusses on the internal resources of the organization in considering the source of competitive advantage
38
Resources
Factors that are owned of controlled by the firm; - tangible - intangible - human
39
VRIN
Resources can be evaluated using the VRIN framework Valuable Rare Inimitable Non-substitutable
40
Impediment to imitation
- Legal restrictions - superior access to inputs and customers - market size and scale economies - intangible barriers to imitation
41
Early mover advantage
- learning curves - reputation and buyer uncertainty - switching costs - network effects
42
4 dimensions of innovation
- type - level; radical vs incremental - location - effect; competence enhancing vs destroying
43
Institution-based view
Highlight the importance of formal and informal institutions in explaining firm performance Two fundamental claims; 1. That individuals and organizations are limited by what is ‘expected’ of them by their institutional environment 2. Conforming to expectations confers ‘legitimacy’
44
Non-market strategy
Is about - advantages for our firm - disadvantages for our competitors
45
Non-market analysis
Four I’s; 1. Interest 2. Institutions 3. Information 4. Issues
46
Corporate social responsibility
Self regulating mechanism, which encourages the firm to comply with the spirit of the law Goal is to have firms make a positive social impact
47
Corporate political activity
Involves the activities taken by organizations to acquire, develop and use power to obtain an advantage
48
Liability of foreignness
Set of costs based on a particular company’s unfamiliarity with and lack of roots in a local environment
49
Isomorphism
Type of entry mode that imitates local/domestic competitors

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