Flashcards in chapter 7 Deck (29):
has to do with the rise of market capitalization around the world
what are challenges with globalization
balancing between emerging markets & developed markets
explains why some nations and their industries outperform others
diamond of national advantage
a nation’s position in factors of production
refer to the demands that consumers place on an industry
Factor endowments involve factors of production:
Factors of production must
be industry and firm specific
A company decides to become a multinational firm in order to:
Increase market size
Take advantage of arbitrage opportunities
Enhance a product’s growth potential
potential threat to a firm’s operations in the country due to fluctuations in the local currency’s exchange rate.
potential threat to a firm’s operations in a country due to the problems that managers have making decisions in the context of foreign markets.
= potential threat to a firm’s operations in the country due to ineffectiveness
new products developed by country multinational firms for emerging markets that have adequate functionality at a low cost.
an opportunity to profit by buying and selling the same good in different markets
a characteristic of legal systems where behavior is governed by rules that are uniformly enforced.
rule of law
using other firms to perform value-creating activities that were previously performed in-house.
shifting a value-creating activity from a domestic location to a foreign location.
a strategy based on a firm’s diffusion and adaptation of the parent company’s knowledge and expertise to foreign markets, used in industries where the pressures for both local adaptation and lowering costs are low.
a strategy based on firms’ centralization and control by the corporate office, with the primary emphasis on controlling costs, and used in industries where the pressure for local adaptation is low and the pressure for lowering costs is high
strategy based on firms differentiating their products and services to adapt to local markets, used in industries where the pressure for local adaptation is high and the pressure for lowering costs is low
a strategy based on firms optimizing the trade-offs associated with efficiency, local adaptation, and learning, used in industries where the pressures for both local adaptation and lowering costs are high.
increasing international exchange of goods, services, money, people, ideas, and information; and the increasing similarity of culture, laws, rules, and norms within a region such as Europe, North America, or Asia
groups of countries agreeing to increase trade between them by lowering trade barriers
producing goods in one country to sell to residents of another country
= a contractual arrangement in which a company receives a royalty or fee in exchange for the right to use its trademark, patent, trade secret, or other valuable intellectual property
a contractual arrangement in which a company receives a royalty or fee in exchange for the right to use its intellectual property; it usually involves a longer time than licensing and includes other factors, such as monitoring of operations, training, and advertising
ventures allow firms to increase revenues and reduce costs as well as enhance learning and diffuse technologies.
Strategic Alliance or Joint Venture
a business in which a multinational company owns 100% of the stock.
reveals the most corrupt countries in the world
Transparency International Corruption Perceptions Index (CPI)