Lesson 4-6 Flashcards
Name the THREE GENERIC SOURCES FOR COMPETITIVE ADVANTAGES.
- Adaptation
- aggregation
- arbitrage
Name the components of the multimarket firm
Explain the concept corporate advantage
Explain the three generic corporate business models.
Mention the three parenting style options
Explain the BCG-portfolio Matrix
Explain the three definitions of multinational enterprises (MNE)
Peng, 2009, p. 127: A MNE is an enterprise that
• enters foreign markets via equity modes through foreign direct investment (FDI).
• A firm that merely exports/imports with no FDI is usually not regarded as an MNE.
Bartlett & Beamish, 2011, p. 2: Enterprises that have
• substantial direct investment in foreign countries AND
• actively manage and regard those operations as integral parts of the company, both strategically and organizationally
OECD, 1984: An enterprise
• comprising entities in two or more countries, regardless of the legal form and fields of activity of those entities;
• which operates under a system of decision making permitting coherent policies and a common strategy through one or more decision-making centers; and
• in which the entities are so linked, by ownership or otherwise, that one or more of them may be able to exercise a significant influence over the activities of the others, in particular to share knowledge, resources, and responsibilities
MNES BENEFIT FROM OLI-ADVANTAGES (JOHN DUNNING) - mention these
Ownership
• e.g., better ability to manage and coordinate cross-border activities
Location
• e.g., geographical features or agglomerations
Internalization
• e.g., by replacing the market relationship between an importer and an exporter with a single organization spanning both countries, cross-border transaction costs are reduced and efficiencies may be increased
Mention the geopraphical (internation) diversification.
Mention the graphs and implications of international diversification
Explain the 2x2 matrix with product scope on one axis and geographical scope on the other.
Mention the three perspectives on diversification
Mention some of the roles of foreign subsidiaries
The roles can be distinguished by a rather limited number of role dimensions
• the external context of the subsidiary (e.g., relevance of host country, complexity of the environment)
• the internal context of the subsidiary (e.g., strategic orientation of the MNE; level of local resources or competencies of the subsidiary)
• coordination variables (e.g., level of autonomy)
• strategy/task of the subsidiary (e.g., primary motives for its establishment, share of internal or external sales, knowledge inand outflows, markets served, etc.)
Based on the role of the subsidiary, it becomes easier to decide other central questions of international management, e.g., the coordination/control of subsidiaries, or, more generally, the appropriate headquarters-subsidiary relations
Explain the three different internatiol approaches:
European
American
Japanese
Elaborate on the link between Strategic Goals and subsidary Type
Explain the “rule of four”
What are the generic international Strategies?
Explain the integration-responsiveness (IR) framework? NOTE IMPORTANT TO KNOW THIS ONE!
What are the 3 components when developing an international strategy?
- Objective of the firm
- “Aspirational goal that motivates the organization and represents the best milestone on the path to long-term shareholder value creation” (Collis, 2014, p. 152)
Scope of the firm
• Product offering in any country • Geographic boundaries of the firm •
Advantage from international activities
(Product? Compete? Locate? Organize?)
• FSAs or CSAs
• Implementation (organization design)
What should MNE take into consideration when choosing which product to enter a market with?
What are the questions and considerations to make when choosing which country to internationalise to?
Where to enter? How to find the right location?
Where to enter? Match strategic goals with locations. What are the 4 parameters to measure this on?
Provide an example of a tool for location choice.
Mention some examples of both equity and non-equity entry modes
Elaborate on some of the entry mode characteristics.
Two parameters exist:
- Levels of control over foreign activities
- Amount of resources comitted to foreign market
Explain the characteristics and some of the related tradeoffs between entry-modes
Mention some of the PROS and CONS of non-equity modes
Mention some of the PROS and CONS of equity modes
Where to locate - strategic fit?
Mention some of the considerations between international strategy vs. where to locate.
Mention some of the forces that shape market entry strategies?
Mention some of the motives for M&A
Mention the symptoms of M&A Failure?
In Brief, describe the transaction Process in M&A. The phases are: Preparation, Execution & Integration.
Mention different types of Mergers
Mention some of the concerns for different stakeholders during M&A
LEGO and Quantafuel
Mention the five major stages in the evolution of an alliance
Mention some of the motives for alliance formation
Mention some of companies motives for alliances
Two types of alliances exist: Non-equity alliance and Equity Alliance. Mention some of the characteristics of the two.
Explain how to select the right partner - there are six different fits - mention these as well.
Mention the 5 steps in the selection process when undertaking a strategic alliance
Provide an example of multimarket competition and how companies reach to lower prices etc.
Explain the concept of mutual forbearance
- When firms are in contact several times and in several places, multimarket competition can lead to a particular phenomenon called “mutual forbearance”.
- Mutual forbearance is a tacitly collusive behavior, that reduces the intensity of rivalry.
- Mutual forbearance is a reduction of the intensity of the competition through familiarity and deterrence. Trying to avoid a price war, competitors can have interests to slow down their commercial behavior on each others market.
- The basis of the mutual forbearance theory is firms’ ability to offer credible mutual retaliation and threats and seriously bind each other’s competitive moves.
- The disciplining mechanism in MMC is the threat of potential retaliation across markets, which could seriously damage a firm’s competitive relationships with rivals and lead to results undesirable to all parties involved.
Give examples of competetive moves and provide examples of companies performing those strategies.
