MNE Topic 3 Flashcards
why go international
how achieve this
build a competitive strategy
undertaking different strategic action
strategic intent goals
- global scale efficiency (scale & scope)
- multinational flexibility/responsiveness (adaptability)
- worldwide learning and innovation (R&D and idea sourcing)
- sometimes simultaneous sometimes contrasting
3 means to achieve a competitive advantage
- EOS
- Economies of scope
- National differences
Economies of scale
cost adv obtained due to size
Economies of scope
cost adv through sharing common certain resources/products
-common distribution channels
-global brand name
-pooling knowledge in different markets
-sharing R&D
National differences
- culture
- tastes
- behaviour
- local comp
- costs
- currency stability
Multinational flexibility
- diff market opps from env
- best one/attractive-> may change
- understanding & risk
-risk = policy, economic perf, ER, labour, resources, preferences, comp
worldwide innovation and learning
stimuli (trends) -> resources needed (capital/knowledge/tech)
Strategic objectives
(WHAT)
1. achieve global scale efficiency
2. implement with locally responsive flexibility
3. develop cross border learning capabilities
global scale efficiency
variation between value of output (revenue) over cost of factor
Strategic means
(HOW)
1. develop and leverage EOS
2. Sense and respond to national differences
3. Recognise and capture scope economies
MNE Environments
diversity of environments & capabilities
multiple learning opportunities = obj worldwide learning
CAGE Distances
- cultural
- administrative
- geographical
- economic
- require time and inv management
cultural distance
attribute of society from interactions
- values/norms/dispositions
- customs
- foods
- languages
- ethnicities
- religions
- lack of trust
e.g. Heineken crossing differences
administrative distance
- legal framework (Law -> civil, common, religious, pluralistic)
- political structure
- currency convertibility/stability
- trade restrictions (regulatory/practice)
- judiciary
- human rights practice/speech freedom