final 2 international business

•     -political stable nations   
•  -free market system 
•    -no dramatic upsurge in inflation or private sector

•  -politically unstable developing nations 
•    -speculative financial bubbles have led to excess borrowing  
•    -mixed or command economies 

• -strategic commitments: a decision that has a long term impact and is difficult to reverse   
•  -large scale entry  
• -all eggs in one basket 

• commitment of significant resources,
• easier to attract customers (will remain in market),
• may cause rivals to rethink market entry

•  fewer resources to commit elsewhere,
• strategic inflexibility 

small scale entry

time to learn about the market, limits company exposure

may be difficult to build market share, difficult to capture first mover advantages 

agreement where licensor grants rights to intangible property to another entity for a specified period of time in return for royalties

•   -reduces development cost and risks of establishing foreign enterprise             
•      -lack capital venture             
•      -unfamiliar or politically volatile market       
•   -overcomes restrictive investment barriers 

  -lack of control           -creating a competitor 

•  -advantages       
•   -no risk of losing technical technical competence to a competitor        
•   -tight control of operations       
•   -realize learning curve and location economies 
•    -disadvantage       
•   -bear full coat and risk
•      -most sought out way of entering a market

franchisers sells intangible property and insist on rules for operating business 

•  -advantages     
•          -reduces costs and risk of establishing enterprise               -relatively easy to set up business

•  -may prohibit movement of profits from one country to support operations in another country         
•      -semi-vertical relationship: Control by franchisor 

•    -country factors   
•  -technological factors   
•  -production factors 
•    -locating manufactoring facilities

• -Political economy     -culture     -relative factor costs 
•    -formal and informal trade barriers     -rules regarding FDI

 -fixed costs     -mass customization      -minimum efficient scale          -mass consumption     -low cost and product customization     -flexiable manufactoring (lean production)

 -2 product features, effect location decisions     -value to weight ratio     -product services universal needs

  -concentration     -decentralization 

   -would you chose centralization     -trade offs low productions cost     -speialized investments, doesn't have      -doesnt have bother use asset     -doesnt have another use 

 

  -propriety product technology production          -facilitating specialized investments      -lower costs     -improved scheduling          -no supply chain 

   -strategic flexiablity      -lower costs     -offsets -> business of practices

  -industrial or complex products          -short distribution          -few print or electronic media available

•    -long distribution channels           -consumer goods   
•       -sufficient print and electronic media available 

•    -income level and competitive conditions determine elasticity   
•  -price elasticity tend to be greater in countries with low income levels   
•  -price elasticity tends t be greater in countries where there are many competitors      

• global/standardization
• locialzation/mutli domestic
• transnational strategy
• international  

• -standardize products  
•         -best use of the experience curve and of location economics       
•   -utilize product standardization     
•     -no need for local responsiveness       
•   -centralization of the operation integration and coordination          -not good if local responsiveness demand is high 

• -opposite of 1, very distinctive from one another     
•     -must take each market with different strategies 
•         -maximize local responsiveness       
•   -customize the product and marketing strategy to national demand     
•     -all value creation activities performed in each national market 

•           -combination of 1 and 2 
•         -cant do it a the same time, but you can do it     
•     -core competences can develop in any of the firms worldwide operations   
•       -flow of skills and product offerings occurs throughout the firm not only at home to foreign subsidiary (global learning)       
•   -makes sense where pressure with both low cost pressure and local responsiness

 -doomed to fail          -sell and market product as one would at home