mgmt4210 final 4

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  1. global expansion - promises
    • Access to (cheaper) input factors
    • Access to new markets
    • Access to new competencies
  2. global expansion – risks
    • The liability of foreignness (Limited social capital (ties to local suppliers, distributors, alliance partners), Limited reputational capital, Limited local knowledge)
    • Knowledge leakage
    • Reputational risks (if you cede too much controls to the local partners)
    • Foreign exchange risks
    • Political risks
  3. Exporting – pros and cons
    • No local presence or infrastructure
    • No need for sharing of sensitive info
    • Cheap and easy
    • limited control over how products distributed/priced
  4. Licensing/ Franchising– pros and cons
    • a measure of control
    • knowledge leakage
  5. Joint Venture– pros and cons
    • Moderate amount of up-front investments
    • Significant level of control
    • Often a legal requirement
    • knowledge leakage
    • Cooperation/coordination challenges
  6. Acquisition– pros and cons
    • Gets access to a fully built up local player without the liability of foreignness
    • Complete control
    • significant up-front investment
    • Adverse selection challenges
    • Integration challenges
  7. Greenfield– pros and cons
    • Complete control
    • Shape subsidiary in one’s own image
    • significant up-front investment
    • Liability of foreignness
  8. 4 types of strategies for globalized operations and features
    • International strategy: for high differentiation company like Rolex (luxury(, who does not need to adapt, eg. exporting
    • Multidomestic strategy: differentiation, sacrifices efficiency in favor of emphasizing responsiveness to local requirements
    • Transnational strategy: balance the desire for efficiency with the need to adjust to local preferences (integration of both)
    • Global (standardization) strategy: sacrifices responsiveness to local requirements within each of its markets in favor of emphasizing efficiency
  9. Porter’s diamond framework- National competitive advantage factors
    • Competitive intensity within industry
    • Supporting industries/ complementors
    • Factor conditions
    • Demand conditions
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mgmt4210 final 4
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mgmt4210 final 4
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