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15 Cards in this Set

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International Business
Definition
The study of transactions taking place across borders for the purpose of satisfying the needs of individuals and organizations
Name two types of Internatinal Business
Export/Imports

FDI
What organization is responsible for regulating International Trade
WTO
What are the ways MNE's Compete
1. Drawing up strategies that focus on regions and geographic areas ensuring they address the needs of their local customers.
2) Innovation
3) Maintaining competitive position by addressing the determinants of national competitive advantage
3 ways
What are the ways for MNEs to maintain competitive position by addressing the determinants of national competitive advantage?
1. Creating the necessary factor conditions (Land / Labor / capital)
2. Strong local demand for the goods and services produced.
3. Having related and supporting industries that are int'lly competitive.
4. Having a suitable strategy and structure and domestic rivalry that encourages continued innovation
4 things
What is an MNE?
A company that is hq in one country but has operations in two or more countries.
Characteristics of MNE's include:
1. Affiliated firms that are linked by ties of common ownership.
2. A common pool of resources.
3. A strategic vision that guides all the affiliates.
Common ownership, resources, vision
Internationalization Process
One of going abroad at incremental stages on the premise that foreign markets are risky.
What is the typical flow of internationalization process
License -> Export -> Sales Office --> FDI
Reasons to become an MNE
1) Desire to protect from risks and uncertainties of domestic business cycle.
2) access world mkt.
3) Response to increased Foreign Competition
4) Desire to internalise in order to reduce costs.
5) desire to overcome tariff barriers
6) to take advantage of technological expertise by manufacturing goods directly rather than allowing others to do it under a license agreeement.
6 reasons dwfitt
dom bus cycle
world mkt
foreign competition
internalize --> reduce cost
tariff barriers
technological expertise
What is a political concern of MNEs
They hire and fire based on global needs.
MNEs rely on strategic mgt process based on 5 phases
1) Id of firm's basic mission.
2) External and internal environmental analysis.
3) Formulation of objectives and overall plans
4) Implementation of these plans
5) Evaluation and control of operations
MNEs use strategies based on two things...
FSAs (Firm Specific Advantages)

CSAs (Country Specific Advantages)
Sources of FSAs
1) Proprietary technology due to R&D activities

2) Skills specific to the organizational structure of the firm (managerial, mkting, etc)

3) Product differentiation, trademarks, brand names.

4) Large size, reflecting scale economies

5) Large capital requirments for plants of the min efficient size.
5 Sources
Sources of CSAs
1) Natural Resources

2) Low cost labor force

3) Trade barriers restricting imports.