Mqm 385 Ch 8 Test 2

Front 1

3 trends toward globalization implications

Back 1

industries are becoming global in scope

shift from national to global markets

steady decline in barriers to cross border trade and investment

Front 2

porters diamond 4

Back 2

factor endowments or conditions

local demand conditions

competitiveness of related and supporting industries

intensity of rivalry

Front 3

factor endowments or conditions

Back 3

the cost and quality of factors of production

basic factors: land, labor, capital, and raw material

advanced factors: technological, managerial, infrastructure

Front 4

local demand conditions

Back 4

home demand plays an important role in the impetus for upgrading competitive advantage

companies are most sensitive to the needs of their closest customers

Front 5

intensity of rivalry

Back 5

different nations characterized by different management ideologoies

strong association between vigorous domestic rivalry and the creation and persistence of competitive advantage in an industry

Front 6

expanding the market by leveraging products

Back 6

taking goods or services developed at home and selling them internationally

Front 7

location economies

Back 7

economic benefits from performing a value creation activity in the optimal location

leveraging the skills of global subsidiaries

applying these skills to other operations withing firm's global network

Front 8

pressures for cost reductions

Back 8

greatest in commodity products

differentiation is difficult

low cost location competitors

consumers are powerful - low switching costs

excess capacity

Front 9

pressure for local responsiveness

Back 9

differences in customer tastes and preferences

differences in infrastructure and traditional practices

differences in distribution channels

host government demands

being locally responsive tends to raise costs

Front 10

standard globalization strategy

Back 10

reaping the cost reductions that come from economies of scale and location economies

business model based on pursuing a low cost strategy on a global scale

strong pressures for cost reduction and the demand for local responsiveness is minimal

Front 11

localization strategy

Back 11

customizing the companys goods or services so that they provide a good match to tastes and preferences in different national markets

substantial differences across nations with regard to consumer tastes and preferences and where cost pressures are not too intense

Front 12

transnational strategy

Back 12

difficult to pursue due to its conflicting demands

simultaneously: achieves low costs, differentiates across markets, fosters a flow of skills between subsidiaries

Front 13

international strategy

Back 13

mulitnational companies that sell products that serve universal needs (little differentiation) and do not face significant competitors (low cost)

Front 14

basic entry decisions

Back 14

which overseas markets to enter (where)
timing of entry (when)
scale of entry (how)

Front 15

first-mover advantages and disadvantages

Back 15

adv - preempt and build share

dis - pioneering costs

Front 16

exporting

Back 16

most manufacturing companies begin their global expansion as exporters and later switch

Front 17

licensing

Back 17

a foreign licensee buys the right to produce a company's product for a negotiated fee

most of the oversees capital

Front 18

franchising

Back 18

specialized form of licensing

sells intangible property, insists to follow strict rules as to how it does business

Front 19

joint ventures

Back 19

typically 50/50 - very favored

Front 20

wholly owned subsidiaries

Back 20

parent company owns 100% of subsidiaries stock - setup or acquire

Front 21

global strategic alliances

Back 21

cooperative agreements between companies from different countries that are actual or potential competitors

range from short term to formal joint ventures

Front 22

global strategic alliance advantages

Back 22

facilitate entry into a foreign market

share fixed costs and associated risks

bring together complementary skills and assets

set technological standards for its industry

Front 23

global strategic alliances disadvantages

Back 23

give competitors a low cost route to gain new technology and market access

alliances can end up giving away technology with very little gained in return

Front 24

partner selection

Back 24

a good partner


shares the frims vision

unlikely to exploit

conduct research

Front 25

success for strategic alliances 3

Back 25

partner selection

alliance structure

manner in which alliance is managed