Ch 10 - Entering Foreign Markets Flashcards
(18 cards)
location-specific advantages
The benefits a firm reaps from the features specific to a place.
cultural distance
The difference between two cultures along identifiable dimensions such as individualism.
institutional distance
The extent of similarity or dissimilarity between the regulatory, normative, and cognitive institutions of two countries.
first-mover advantages
Benefits that accrue to firms that enter the market first and that late entrants do not enjoy.
late-mover advantages
Benefits that accrue to firms that enter the market later & that early entrants do not enjoy.
scale of entry
The amount of resources commuted to entering a foreign market.
modes of entry
Methods used to enter a foreign market.
non-equity modes
A mode of entry (exports and contractual agreements) that tends to reflect relatively smaller commitments to overseas markets.
equity modes
Mode of entry (joint ventures and wholly owned subsidiaries) that indicates a relatively larger, harder to-reverse commitment.
turnkey projects
Project in which clients pay contractors to design and constant new facilities and train personnel.
build-operate-transfer (BOT) agreement
A nonequity mode of entry used to build a longer-term presence by building & then operating a facility for a period of time before transferring operations to a domestic agency or firm.
research and development (R&D) contracts
Outsourcing agreement in R&D between firms. Firm A agrees to perform certain R&D work for Firm B.
co-marketing
Efforts among a number of firms to jointly market their products and services.
joint-venture (JV)
A new corporate entity created and jointly owned by two or more parent companies.
wholly owned subsidiary (WOS)
A subsidiary located in a foreign country that is entirely owned by the parent multinational.
greenfield operations
Building factories and offices from scratch (on a proverbial piece of “green field” formerly used for agricultural purposes).
country-of-origin effect
The positive or negative perception of firms and products from a certain country.
LLL advantages
A firm’s quest of linkage (L) advantages, leverage (L) advantages, and learning (L) advantages. These advantages are typically associated with multinationals from emerging economies.
