Lecture 8

Question 1

Why has the world not become flat and completely integrated as predicted by this random wanker Levitt?

Answer 1

Local companies are still better at producing goods that locals want to consume, giving MNCs a run for their money

Question 2

What percentage of total investment is FDI?

Answer 2

10%

Question 3

What are the three pressures for cost reductions?

Answer 3

Commodity type products (competing for lowest price)
Low cost to a consumer of switching between products
Liberalisation of world trade

Question 4

What are the four pressures for local responsiveness?

Answer 4

Consumer tastes and preferences
Infrastructure and traditional practises
Distribution channels (MNCs must adapt to how consumers in a host country are used to receiving products
Host government demands

Question 5

What is the international strategy?

Answer 5

Keep the product exactly the way it is because you like it like that
Doesn’t bother to respond to local demand

Question 6

What is the localisation strategy?

Answer 6

The product is completely customised based on local preferences

Question 7

What is the global strategy?

Answer 7

Low cost strategy that does all its stuff separately in the cheapest possible places but doesn’t adapt to local needs

Question 8

What is the transnational strategy?

Answer 8

Try to customise to some degree while at the same time keeping costs down

Question 9

What kind of strategy did Dominoes use?

Answer 9

Localisation, becoming transnational

Question 10

What is the key element that must be present for franchising to work?

Answer 10

Trust that international employees are loyal