MNE Topic 2 Flashcards

1
Q

three sets of conflicting external pressures/forces

A

daily challenges, account for strategies

  1. forces for cross-border integration & coordination
  2. national differentiation and responsiveness
  3. worldwide innovation and learning
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2
Q

main forces for global integration and coordination

A
  1. exploitation of EOS& scope
  2. exploit differentials in costs of factors of production (raw materials/labour)
  3. competitive positioning (global chess)
  4. rise of liberalised trade environment

1,2, = globalisation -> transformed themselves

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3
Q

economies of scale

A

proportionate increases in amounts of inputs employed in production = lower unit costs -> Grant 2013

  • increase production -> make sure domestic can buy -> domestic small therefore go abroad to get demand
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4
Q

economies of scope

A

cost of joint production (or development or distribution) of 2 or more products = less than cost of producing them separate (Bartlett and Beamish 2018)

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5
Q

competitive positioning

A

Japanese in automotive sector
using profit to subsidise loss in other markets

e.g. BA -> profit in long distance -> subsidise loss in short distance = push out competitors

  • financial and strategic interdependencies
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6
Q

liberalised trade environment

A

cost of importer = lower
trade agreements

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7
Q

waves of globalisation

A
  • pace of globalisation = accelerated and complexity
  1. 1830-1900 (phone/rail)
  2. 1900-1930 (electricity & steel)
    Great Depression and war 2
  3. 1948-1970 (US dominant = least harm from war 2) - reduce trade barriers
    end of boom 1970s
    new economic system 1980s
  4. 1980 - (tech trigger, personal computer/internet, service sectors = tourism)
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8
Q

international trade environment

A

today = more restricted vs one at beginning of 21st century
-Brexit = job loss (automation) - political reasons
- purchasing power of emerging -> buy from advanced -> global customers
- globalisation can be blamed for job losses but this is due to tech advances and we are more productive
- number of players is increasing - emerging economies increasing
- war and covid

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9
Q

forces for national differentiation and responsiveness - main forces for local responsiveness

A
  1. National
  2. Host governments demands (policy)
  3. growing pressure for localisation
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10
Q

National force for local responsiveness

A
  1. culture
    - consumer behaviour (e.g. differences in tea)
    - doing business (e.g. Sweden libertarian country)
  2. infrastructure - local standards (TV transmission/voltage) and distribution channels (supermarket and local bazaar)
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11
Q

Hofstede and Globe Studies

A

relate to the way of doing business
1. power distance
2. uncertainty avoidance
3. individualism
4. masculinity

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12
Q

Host Governments demands force for local responsiveness

A
  1. national laws and regulations
  2. host country pressures and demands
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13
Q

Growing pressure for localisation force for local responsiveness

A
  1. culturally sensitive flexibility and responsiveness
  2. appeal to nationalism - e.g. Brexit
  3. mass customisation - advance tech and automation and AI -> effective way
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14
Q

forces for worldwide innovation and learning

A

increased need for rapid & coordinated worldwide innovation driven by

  1. shortening PLC
  2. Increased R&D costs (more complex products as new techs) ->cross patenting share resources with other companies or share license -> strategic alliances - get money back ASAP
  3. emergence of global tech standards
  4. competitors ability to develop and diffuse innovation globally (trends everywhere
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15
Q

How to respond to the different forces

A

= industry effect = mapping industries according to their degree of globalisation (varies)
- dominating forces/strength of forces (globalisation vs local response)

  • degree of globalisation evolves -> 1990s onwards = many transnational, some de-globalised after wave of globalisation
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16
Q

Types of industries

A
  1. global = forces for global integration dominate
  2. multinational/multidomestic = forces for national responsiveness dominate
  3. transnational = forces for both global integration & national responsiveness are strong
  • differ in respective strengths of globalisation vs localisation pressures (spectrum -> global -> multinational)
17
Q

transnational industry

A

MNEs = build the capacity to learn from many env in which they operate

18
Q

types of forces

A
  1. economic = centralise activities across border to benefit and capture EOS/EOscope (integrate/coordiante in centralised)
  2. social/political (differentiate activities across nations)
  3. tech (new trends/ capabilities in place, diffuse products in faster way)
19
Q

why does company go abroad - 5 reasons

A
  1. MS (expand)
  2. taxation
  3. demand (comp cant fulfil) = customer base
  4. production factors
  5. diversify risk