Business Model and Modes of Entry Flashcards
(31 cards)
What is a business model?
A framework that describes how an organization creates, delivers, and captures value.
Why do firms expand internationally?
Due to globalization, increased market opportunities, and technological advancements making international operations more feasible.
Why are these differences important?
They impact pricing, marketing, HR strategies, logistics, and compliance in each country.
Do all firms adapt their business models well when expanding internationally?
No, some manage the transition better than others.
How has globalization affected international business?
It has increased interconnectedness and created opportunities for even small and medium firms to operate globally.
Why do some firms succeed more than others in the same industry?
Due to better business models that align with market needs and leverage capabilities more effectively.
What is the Value Proposition in a business model?
The unique value or benefit offered to customers.
What does the Cost Structure include?
All expenses involved in operating the business model.
What kind of business model does Amazon use?
Customer-centric, tech-driven with complex logistics and multiple revenue streams (e-commerce, AWS, subscriptions).
What is the Target Customer?
The specific segment of the market the company wants to serve.
What are the pros of doing business internationally?
Larger markets, diversification, access to resources, and economies of scale.
What factors influence the choice of entry mode?
Company size, resources, goals, risk tolerance, and industry characteristics.
What are examples of national differences impacting business?
Corporate tax rates (e.g., G20 variations)
Air pollution levels
Price of standard goods (e.g., Big Mac Index)
Average annual salaries
Industrial output (e.g., auto manufacturing rankings)
Why do national differences matter?
Because they impact market entry strategies, operations, pricing, and competition.
What happens to a business model when a company expands internationally?
It often needs to adapt in areas like customer relationships, channels, cost structures, and partnerships.
How does Uber illustrate a business model?
Value Proposition: On-demand ride service
Target Customer: Urban travelers
Revenue Stream: Commission from drivers
Partner Network: Driver-partners
Channels: Mobile app
Core Capabilities: App development, algorithms, network scale
What is a value chain?
A model of all steps from product/service idea to delivery that create value for the customer.
What trade-offs are involved in market entry strategies?
Control vs. Flexibility
Resource commitment vs. Risk mitigation
What is the Partner Network?
Strategic alliances and partnerships that help in delivering the value proposition.
What are the major modes of entry into foreign markets?
Exporting
Licensing / Franchising
Joint Venture (FDI)
Wholly Owned Subsidiary (Greenfield or Acquisition)
Why is adapting a business model crucial when going global?
Because customer preferences, infrastructure, and legal environments differ significantly.
What remains despite globalization?
Significant national and regional differences—cultural, economic, political, legal—that companies must understand and adapt to.
What are Channels in a business model?
The means through which a company delivers value and communicates with customers.
What are the cons of doing business internationally?
Cultural differences, regulatory challenges, currency risk, and logistical complexity.
