Ch 12: Strategy of International Business

Actions managers take to attain the firm's goals

A ratio or rate of return that the firm makes on its invested capital

percentage increase in net profits over time

Performing activities that increase the value of goods or services to consumers

The various value creation activities a firm undertakes

Totality of a firm's organization, including formal organizational structure, control systems and incentives, organizational culture, processes, and people.

3 part structure of an organization, including its formal division into subunits such as product divisions, its location of decision-making responsibilities within that structure, and the establishment of integrating mechanisms to coordinate the activities of all subunits

The metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits

Devises used to reward appropriate managerial behavior

The manner in which decisions are made and work is performed within any organization

Values and norms shared among an organization's employees

Employees of the organization, the strategy used to recruit, compensate, and retain those individuals and the type of people that they are in terms of their skills, values, and orientation

Firm skills that competitors cannot easily match or imitate

Cost advantages from performing a value creation activity at the optimal location for that activity

When different stages of value chain are dispersed to those locations around the globe where value added is maximized or where costs of value creation are minimized

Systematic production cost reductions that occur over the life of a product.

Cost savings from learning by doing

Cost advantages associated with large-scale production; reductions in unit cost achieved by producing a large volume of a product

Needs that are the same all over the world, such as steel, bulk chemicals, and industrial electronics

Firm focuses on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies

Increasing profitability by customizing the firm's goods and services so that they provide a good match to tastes and preferences in different national markets

Attempt to simultaneously achieve low costs through location economies, economies of scale, and learning effects while also differentiating product offerings across geographic markets to account for local differences and fostering multidirectional flows of skills between different subsidiaries in the firm's global network of operations

Trying to create value by transferring core competencies to foreign markets where indigenous competitors lack those competencies