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Lecture notes

Class notes 11 Managing Internationalisation

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  • Module
  • Managing Internationalisation
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  • Katholieke Universiteit Leuven (KU Leuven)

notities van de elfde les van managing internationalisation waarin zowel de powerpoint als uitleg tijdens de lessen aan bod komen alsook de besproken video case van deze les. notes from the 11th lesson of managing internationalisation covering both the powerpoint and explanations during the less...

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Document information

  • December 20, 2022
  • 15
  • 2022/2023
  • Lecture notes
  • F. de beule
  • All classes

Subjects

  • man int
  • lesson 11
  • class 11
  • business sciences
  • kul
  • managing internationalisation
  • f de beule

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  • Katholieke Universiteit Leuven (KU Leuven)
  • Handelswetenschappen Master
  • Managing Internationalisation
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Les 11: GVCs, GPNs, and international sourcing
Importing is more international than exporting, more firms import than export
 Exporter will take care of all the administration

Focus on purchasing and production and different ways to organize production

GVC’s= global value chain
GPN= global production networks
 Focus on the same aspects but the way they tackle networks is different
 GPN: how things are organized
 In international businesses more GVC and the activities are split up

A lot of GVC are under stress  covid and war in Ukraine

Robustness= GSC is the strength of your supply chain during a crisis
 War, Natural disaster,…

Resilience= how back you come back after a crisis
 How fast can you get back to production after crisis?

Redundancy= there is an overlap in a supply chain
 If you only have one source of materials and there is a problem with  no redundancy

What you want? Cheapest good at best quality
 Trade-off between quality and price

When you do sourcing, we believe labor cost is the most important
 Also important is could be a plant that can run 24/7

VIDEO CASE: KIPLING
VRAAG 1: What different entry modes would you consider and why?

 Each HQ has their own production chain to have some space and backup
 A joint venture (investment mode, partly invest) with other brands
 PROBLEM: you invest into production capacity with other brands, but do they need the
same materials and production??
 Joint venture with local manufacturers, because you are a small start up
 Joint venture with Belgian manufacturers country of origin effect
 License
 Outsourcing = country manufacturing
 You are not doing it yourself, you’re asking someone else
 You don’t need to invest in a production plant
 It’s not just about the money
 You can have many or just a limited number of contract manufactures
 Why limited?
• Manage relationship with a few instead of a lot to maintain
• Follow up less manufactures, less controlling

Which money are you gonna use?
You don’t need money, you are just going around looking for licensers

VRAAG 2: Why did China become the production plant for the world?


Les 11 13/12/2022 Pagina 1 van 15

, The contracters become international and you tag along with them, it is not the lead firm that
choose.

If the contractor is not shifting than he will not be able to maintain that relationship, he convinces
you to change places and seduces you with reduction in price.

There is always a balance between price and quality, so don’t follow to risky regions.




Capital refers to western influences, so they call it equity joint ventures.

The more developing you are the more stricter you as a government.

It is becoming more expensive, so get a local company to invest.

VRAAG 3: Where has sourcing moved to more recently? Why (not) move out of China?
Countries?
 Bangladesh
 Mexico
 Eastern Europe

Why move out of China?
 Because of the increasing labor costs
 WTO
 Covid-policy
 Legalsystem  rule of law, but in China it is rule by law= you apply the system to your liking
 Human right issues: it is a hands of type of approach
 They want the same policy to be applied in Taiwan
 It is for their own benefit rather than the benefit of the guest country

Why would you invest in China?
 Because of the large market, biggest market on earth
 The policy is getting better: China would be an improved destination for investment




Les 11 13/12/2022 Pagina 2 van 15

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