chapter 1 Flashcards
1.WHY EXPAND?
STEP 1: Operating Environment
Physical and societal factors
- political policies and legal practices
- cultural factors
- economic factors
- geographical influences
1.WHY EXPAND?
STEP 2: Operations
- sales expansion
- resources acquisition
- risk minimization
- . STRATEGY
1.WHY EXPAND?
STEP 3: Competitive factors
- major advantage in price, marketing, innovation, or other factors
- number and comparative capabilities of competitors
- competitive differences by country
1.WHY EXPAND?
STEP 4: Modes
- importing and exporting
- tourism and transportation
- licensing and franchising
- turnkey operations
- management
1.WHY EXPAND?
STEP 4: Functions
- marketing
- global manufacturing and supply-chain
- management
- accounting
- finance
- human resources
1.WHY EXPAND?
STEP 4: Overlaying alternatives
- choices of countries
* organization and control mechanisms
1.WHY EXPAND?
Internalization
moving physically your company abroad.
- WHERE TO EXPAND?
- Geographic
- cultural
- Administrative
- Economic
A natural advantage may exist because of:
- given climatic condition
- access to particular resources
- the availability of labor
an acquired advantage may exist because of:
- superior skills
- better technology
- greater capital assets
CURRENCY VALUES AND INFLATION RATES
- Currency fluctuations
- High inflation in a host country
- High inflation in a home country
- Currency fluctuations:
affects a firm’s competitiveness and. ultimately, its profitability
2.High inflation in a host country:
(the country where you are moving the company to) negatively affects the value of a firm’s foreign receipts
3.High inflation in a home country:
negatively affects the costs of a firm’s foreign-sourced inputs.
3.HOW TO EXPAND?
The five building blocks of a multinational/ INTERNATIONAL company
- Investment
- Human resources.
- Technology.
- Trade
- Environment
