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18 Cards in this Set
- Front
- Back
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Three dimensions of international expansion
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Country
Product Operational form |
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Choosing sites
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Where to sell
Where to produce Where to acquire |
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Scanning for Alternatives, why important?
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Not to overlook opportunities
Not to examine too many possibilities |
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Environmental Climate
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External conditions in hose countries that may affect the success of operations
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Opportunities (Market size)
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Population - (make/process)
Per capita income* Sales* Growth rate* *connections to output function |
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Opportunities (Feasibility and availability)
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Similarities
Fitness Resources Red tape |
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Risk (Political)
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Types: micro
macro How to predict: - analysis of past patterns - opinion analysis - instability assessment |
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Risk (Monetary)
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- liquidity => how easily can you convert money into cash
- liquidity and entry mode choice => JV is easier to sell to partner, WOS longer to sell to get cash |
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Risk (Competitive risk)
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-'Risk- avoidance'
- 'exchange-of-threat' = Japan invests in US, so US invests in Japan |
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Risk (Institutional risk)
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Corruption
Neggative correlation between highly globalized and corruption |
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How to compare?
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Problems with data
Comparability problems Definition of dollar, comparisons in US$ (changing exchange rate) |
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Tools for evaluation
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Opportunity-risk matrix - Does not consider yourself, focus only on host country
Country attractiveness-company strength matrix Ex: Company strength ^ |...Cell 1.....Cell 2*CC.... |..................................... |...Cell 3.....Cell 4.......... |_________________> Country Attractiveness *CC = cash cow |
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Strategic choice
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Diversification : go to many fast and the nbuild up slowly in each
Concentration : Go to one or a few and build up fast before going to others |
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What to consider?
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Growth rate
Sales stability Lead time Spillover effects Need for adaption Need for control Constraints |
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First mover advantages
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- Proprietary, technological leadership
- Preemption of scarce resources - Establishment of entry barriers for late entrants - Avoidance clash with dominant firms at home - Relationships and connections with key stakeholders such as customers and governments |
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Late mover advantages (or first mover disadvantages)
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-Opportunity for free ride on first mover investments
- Resolutions of technological and market uncertainty - First mover's difficulty to adapt to market changes |
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Illustration of first mover and late mover advantage
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-Sir Edmond Hillary (pioneer)
-Mount Everest (the industry) -...and others (late followers) Probability of dying from attempting to climb Mount Everest? Risk is lower for late follower |
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Subsequent decisions
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Reinvestment
Divestment |
