Week 1 [Porter, 1986] Flashcards
What does the [Porter, 1986] ask/focus on?
[Porter, 1986]
“What does international competition mean for competitive strategy” –> Focused not on how to become an MNE, but how to formulate a strategy for MNEs.
What is a ‘multi domestic’ industry?
[Porter, 1986]
Competition in each country is essentially independent of competition in other countries
What is a ‘global’ industry?
[Porter, 1986]
A firm’s competitive position in one country is significantly influenced by its position in other countries.
–> An industry is ‘global’ if there is some competitive advantage to integrating activities on a worldwide basis
What is [Porter, 1986] unit of analysis?
Industry (in general)
What is the concept of the value chain?
[Porter, 1986]
Concept = Firm (collection of “things” that add value) as a collection of discrete value activities
- Value Chain as overview of “things”
- -> Also; “A firm that competes internationally must decide how to spread the activities of the value chain among countries”
According to [Porter, 1986], what can lead to a firm’s competitive advantage (2)?
- Low (relative) cost
2. Differentiation
What different competitive scopes (-> look at hos industries differently use the value chain) are being used (4)?
[Porter, 1986]
- Segment scope (product varieties, customer types)
- Industry scope
- Vertical scope
- Geographic scope
What is said about ‘downstream’ activities and C.A.?
[Porter, 1986]
Downstream activities create competitive advantages that are largely country specific.
- E.g. reputation, brand name, service network
- Culture, use your language, be local
What is said about (using) ‘upstream’ activities?
[Porter, 1986]
Upstream (and support) activities can be decoupled from where the buyer is located.
Upstream activities can be conducted in global locations.
What is the difference between [Porter, 1986] globalization and now?
[Porter, 1986] states that some part of the value chain can be moved and other parts have restrictions.
Now -
Upstream - tariffs, etc. might force you to move activities closer rather than offshore
Downstream - can be global too (e.g. Apple providing service over the phone and Social media is globalized w/ local features, but no local offices)
What does ‘concentrated’ mean?
“Industries are dispersed/concentrated”
[Porter, 1986]
Performing an activity in one location and serving the world from it.
–> Standardize
What does ‘dispersed’ mean?
“Industries are dispersed/concentrated”
[Porter, 1986]
Performing every activity in every country
–> Tailor
What are four (4) strategic choices that can be made (2x2)?
[Porter, 1986]
2x2 Pressures for A; ‘Global integration’ x B; ‘Local responsiveness’
- Home replication
- Localization - B
- Global standardization - A
- Transnational - AB
