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SM Module 7 Vocab + Main Ideas
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SM Module 7 Vocab + Main Ideas
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SM Module 7 Vocab + Main Ideasinternational strategy
- strategy through which the firm sells its goods/ services outside its
domestics market
- oftentimes become quite diversified geographically
- can extend product life cycle
- gain access to materials needed
- must be based on one or more core competencies
multinational enterprise (MNE)
- firm that operates in at least two diff. nations
- AKA transitional/ global corp./ multinational firm/corp.
foreign direct investment
purchase of investment in company by investor located in another country-
as compared to portfolio investment
two basic benefits of successfully using international strategies
1. increased mkt. size: economies of scale and learning
2. dvlpmnt. of a comp. adv. through location: access to low-cost input
factors and dvlp. new competencies
business- level international strategy
firms select among the generic strategies of cost leadership, differentiation,
focused cost leadership, focused differentiation, and integrated cost
leadership/ differentiation
disadvantages of international expansion
1. liability of foreignness
, 2. loss of reputation
3. loss of intellectual property
liability of foreignness
- set of costs associated with various issues firms face when entering
foreign markets
- operating environments; economic, admin., and cultural differences from
their home institutional environments- and challenges of coordination over
distances
- CAGE framework
3 steps of implementing international strategy
1. chose strategy
2. chose destination country
3. chose entry mode
corporate- level international strategy
firms consider multi-domestic, global, and transitional international
strategies
multi-domestic strategy
- international strategy in which strategic and operating decisions are
decentralized to the strategic bus. units in individual countries or regions,
allowing each unit the opportunity to tailor products to the local mkt.
- firm's need for local responsiveness is high while its need for global
integration is low (i.e. political and legal structures and social norms vary by
country)
global strategy
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