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Year 2 Semester 1 > MNE Topic 8 > Flashcards

MNE Topic 8 Flashcards

1
Q

entry modes

A

non equity based modes = small scale
1. exporting
2. licensing
3. franchising

equity based modes = large scale
1. joint ventures
2. wholly owned subsidiary

increasing control & risk

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2
Q

Uppsala model of internationalisation

A
  • develop in domestic/ home mkt first
  • largest obstacle = lack knowledge & resources
  • overcome = incremental decision making and learning
  • start small commitment then increase
  • non equity modes at start & graduate to equity modes over time
  • likely to enter physically close foreign mkt first

license, agent export, own export, local packaging, FDI

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3
Q

Uppsala model

A

internationalising increasing = increasing geographic diversification & increasing market commitment

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4
Q

examples of internationalisation/ international expansion

A
  1. J & J - Montreal 1919 33 years after founding
  2. Sony - 11 years for first export to US
  3. Gap - founded 1969 first overseas London store 1987
  4. Marcopolo
    1949 - established
    1961 first export
    1964 - own export dpt
    1990 - first FDI, 92 = JV, 97 - acquisition
    2000 - enter through licensing and FDI
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5
Q

3 criticisms of Uppsala model

A
  1. not all follow sequential model
    - commitment lvl, geographic distance
  2. engage several modes simultaneously
  3. some follow lead firms
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6
Q

successful internationalisation

A
  1. scale and internalised resources
    not necessities for successful internationalisation
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7
Q

Born Global Firm

A

-near founding seek superior international business perf

  • apply of knowledge-based resources -> sales globally
  • shorter average age for first export = 2 years
  • larger % of sales from overseas mkts = 76% 14yrs

emergence facilitated by changes in PESTLE and globalisation

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8
Q

International New Ventures

A

-from inception seeks to derive sig comp adv from use of resources and sale of outputs in multiple countries

-distinguishing feature -> international origins

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9
Q

5 examples of Born Global firms

A
  1. skype
  2. whatsapp
  3. Facebook
  4. logitech
  5. cochlear
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10
Q

types of born global firms

A
  1. export/import start up
  2. multinational trader
    NEW INTERNATIONAL MARKET MAKERS = 1/2
  3. geographically focused start up e.g. tech/productivity
  4. global start up -> best - long lasting success
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11
Q

5 drivers of BG firms

A
  1. globalisation
  2. small home markets -> survival
  3. market knowledge
  4. innovation
  5. ease of forming
    networks and alliance -> leveraging foreign distributorship
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12
Q

globalisation as driver of BG firms

A
  • deregulation and economic liberalisation
  • homogeneity in tastes and preferences (universal needs)
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13
Q

market knowledge as driver of BG firms

A
  • international mkting orientation
  • growth and proliferation of niche markets
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14
Q

innovations as a driver of BG firms
4 elements

A
  • technological competence
  • intangible knowledge based capabilities
  • international entrepreneurial orientation (unique and quality)
  • modern communications and transport infrastructure
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15
Q

4 Roles of founders of BGs

A
  1. acquire requisite resources from earlier experience of founders
  2. personal relationships and social capital = rapid internationalisation
  3. conceive, recognise, exploit opps in international markets -> prior international exp (work/education)
  4. less risk averse/proactive/ tolerate ambiguity
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16
Q

6 ways governments promote emergence of BG firms

A
  1. free trade agreements (easy exports)
  2. FDI policies - export oriented - subsidies and special eco zones
  3. IP protection - patent/copyright
  4. innovation hubs/incubators - resource linkages
  5. capital mkt strengthening
  6. shaping entrepreneurial culture - award schemes
17
Q

2 ways governments promote BG firms through capital market strengthening

A
  1. financing and guarantor schemes
  2. venture capital provision
18
Q

country institutions and BGs

A
  1. regulatory = regs, policies = support new business
  2. cognition - knowledge/skills from people (education)
  3. normative - celebrate entrepreneurial activity & innovative thinking
19
Q

4 developmental trends of BGs

A
  1. start in small countries (home mkt need to expand)
  2. begin - scarce financial, human, tangible resources
  3. newness/smaller - flexibility = key benefits for succeeding in foreign mkts
  4. internationalising by exporting/non equity (being with)
20
Q

3 BG strategies

A
  1. differentiation = charge premium
  2. cost leadership = charge lower overall
  3. focus = use differentiation or cost leadership
21
Q

differentiation

A

relatively unique products
generally differentiating offering from rivals

22
Q

cost leadership

A

compete on low production, mkting, admin costs

23
Q

focus

A

concentrate on particular buyer group
segment of product line or geographical market

24
Q

5 distinctive features of BG strategy

A
  1. intangible knowledge based capabilities = establish export mkts
  2. asset parsimony
  3. distinctive product/offering (strong diff)
  4. proactive pursue global mkt nicer = FMA
  5. networks created through licensing, independent, franchise, own sales, mkting (alternative governance structures)
25
Q

export markets

A

tech, processes, business models

knowledge = unique asset -> innovation -> competitive advantage

26
Q

asset parsimony

A

use of minimum amount of assets to deliver org outputs

27
Q

3 challenges BGs face

A
  1. expropriation and opportunism
  2. de-globalisation -> rising nationalism and potential trade war restrictions
  3. disruptive innovation -> product obsolescence
28
Q

expropriation and opportunism

A
  • use of alternative governance structures
  • minimal use of internalisation -> limited ownership of foreign assets
29
Q

acquisition of BG firms

A

eventually acquired

  1. Microsoft acquired Skype 2011 $8.5 billion
  2. Facebook acquired WhatsApp 2014 $19 billion
  3. Apple acquired Beats audio 2014 $3 billion
30
Q

4 reasons to sell a BG?

A
  1. cash out - focus on next, serial BG entrepreneur
  2. Resource for upscaling - next lvl, complementary capabilities
  3. protection - security for unwanted sharks, defend against disruptors
  4. avoid comp - dodge elephants
31
Q

Born Again Global firms

A

old firms = show sudden internationalised rapid, previous no enthusiasm -> dont conform to stage models or conceptualisations

internationalise rapid 2-5 years of first international involvement

dramatic change in strategic focus = critical incidents

32
Q

3 reasons for the emergence of born again global firm

A
  1. change ownership
    -mngment buyout
    -takeover
    -change strategic priorities
  2. acquisitions
    -foreign firms/international connected firms
    -inward tech transfer
    -distribution rights
  3. client followership
    -domestic client internationalises
33
Q

Canpro Global

A

born again global firm

founded 1970s
internationalise services in Us and Middle East
corporate restructuring and branding and acquisition = growth period = increase international sales 25% previous

2012 = services in 14 countries sales 300% in previous 3 years

Year 2 Semester 1 (19 decks)

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