BLOCK 3 ( CH 8 AND 10)

Question 1

WHAT IS STRATEGIC PLANNING?

Answer 1

it is the process of evaluating a firm’s env and internal strengths and identify short and long term activities and implement them

Question 2

WHAT ARE THE BIG FOUR?

Answer 2

1) ethnocentric
2) polycentric
3)regioncentric
4) geocentric

They are predispositions that help a firm choose the decisions they will implement

Question 3

WHAT IS ETHNOCENTRIC?

Answer 3

(the profitability)- it relies on the value and interest of the parent company in making s.p

firms try to run their business in the same way that the one at home

profit is brought back into home country

Question 4

WHAT IS POLYCENTRIC ?

Answer 4

(legitimacy)- public acceptance- it tailors s.p according to the culture of the host country and blends with it

profit is reinvested back into host country to grow and expand

Question 5

WHAT IS REGIONCENTRIC?

Answer 5

combination of 1&2- uses strategy to access both local and regional needs - focus on region such as EU rather than 1 country

profit is distributed within regions

Question 6

WHAT IS GEOCENTRIC?

Answer 6

combination of 1&2- view on global basis
large business use this approach= true meaning of multinational

they produce global products with local variations

profit is distributed within global basis

Question 7

WHAT ARE 5 FACTORS AFFECTING FDI?

Answer 7

1)macro conditions
2)degree of receptivity to foreign enterprises
3)degree of capital liberalisation
4)trade protection/ free trade agreement
5)transport and communication tech