Week 1 [Ghemawat, 2008]

Question 1

What are ‘Horizontal MNCs’?

[Ghemawat, 2008]

Answer 1

Perform (many of) the same activities in different countries

Question 2

What are ‘Vertical MNCs’?

[Ghemawat, 2008]

Answer 2

Arbitrage differences across countries by geographically separating activities (often by vertical stage)

Question 3

“AAA strategies for dealing with differences”
What does the ‘AAA’ stand for (3)?
[Ghemawat, 2008]

Answer 3

1. Adaption (=local responsiveness, adjust to differences)
2. Aggregation (=scale & scope economies, integration, overcome differences)
3. Arbitrage (=exploit differences, rather than overcome/adapt)

Question 4

What are four (4) types of arbitrage?

[Ghemawat, 2008]

Answer 4

1. Labor
2. Capital
3. Tax
4. Knowledge