Ch 12: Strategy of International Business

  1. Strategy
    Actions managers take to attain the firm's goals
  2. Profitability
    A ratio or rate of return that the firm makes on its invested capital
  3. Profit growth
    percentage increase in net profits over time
  4. Value Creation
    Performing activities that increase the value of goods or services to consumers
  5. Operations
    The various value creation activities a firm undertakes
  6. Organizational Architecture
    Totality of a firm's organization, including formal organizational structure, control systems and incentives, organizational culture, processes, and people.
  7. Organizational Structure
    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
  8. Controls
    The metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits
  9. Incentives
    Devises used to reward appropriate managerial behavior
  10. Processes
    The manner in which decisions are made and work is performed within any organization
  11. Organizational Culture
    Values and norms shared among an organization's employees
  12. People
    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
  13. Core Competence
    Firm skills that competitors cannot easily match or imitate
  14. Location Economies
    Cost advantages from performing a value creation activity at the optimal location for that activity
  15. Global Web
    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
  16. Experience Curve
    Systematic production cost reductions that occur over the life of a product.
  17. Learning Effects
    Cost savings from learning by doing
  18. Economies of Scale
    Cost advantages associated with large-scale production; reductions in unit cost achieved by producing a large volume of a product
  19. Universal Needs
    Needs that are the same all over the world, such as steel, bulk chemicals, and industrial electronics
  20. Global Standardization Strategy
    Firm focuses on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies
  21. Localization Strategy
    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
  22. Transnational Strategy
    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
  23. International Strategy
    Trying to create value by transferring core competencies to foreign markets where indigenous competitors lack those competencies
Card Set
Ch 12: Strategy of International Business