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Internation business strategies Flashcards

(46 cards)

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1
Q

strategy

A

an intergrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competive advantage

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2
Q

competitive advantage

A

firm achieves a competitve advantage by implementing a value-creating strategy that current and potential competitors are not simultaneously implementing/ cannot implement due to cost

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3
Q

above average return

A

return that exceed return that investor expect for a given risk levels

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4
Q

external analysis: 4 assumptions

A
  1. external environment affect how firm choose strategy
  2. similiar competitors will try to implement strategy
  3. resources difference are short lived. long term: everyone has the same resource
  4. strategic decisions makers want to make profit
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5
Q

external analysis: 5 forces

A 
potential entrants: new entry of competitors 
suppliers: suppliers' bargaining postion
buyers
threats from substitue product/ service 
rivalry from existing firms
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6
Q

internal analysis: 4 assumption

A
  1. firms acquire different resources
  2. unique in how they use the resources
  3. resources are not mobile between firms
  4. difference resources/ capabilities form the bases of competitive advatage, not their structural characteristic
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7
Q

internal analysis: resource based views

A

when firms acquired/ bundle their core competence well, leads to superior value that customers will pay for
VIRIN model

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8
Q

external analysis: competitive advantage

A

takes offensive/defensive actio ns against the 5 forces

identify/ position/ influence/ anticipate

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9
Q

internal analysis: competitive advantage

A

competitive advantage are difficult to sustain because core competence can be replicated or substituted
environmental change

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10
Q

internal analysis: VRIN model

A

V: valuable
R: Rare capabilities
I: hard to imitate. firms might have a historical unique brand name, ambiguous use/cause of competence, socially complex
N: nonsubstitutable capabilities

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11
Q

Cost leadership

A

set of action taken to produce goods/services with the lowest price relative to others and acceptable quality

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12
Q

differentiation

A

integrated sets of actions taken to produce goods or services (at an acceptable cost) that are different in ways that are important to them
appropriate when customer are value differentiated features than cost

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13
Q

cost leadership: key strategy elements

A

scale efficient plants
control of overheads
avoidane of marginal customer accounts

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14
Q

cost leadership: resources and organizational requirements

A 
access to capital
process engineering skills
frequent reports
tight cost control 
specialization of jobs & functions 
incentives for quantitative targets
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15
Q

differentiation : key strategy elements

A 
emphasis on branding
brand advertising
design 
service
quality
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16
Q

differentiation: resource & organization requirements

A 
marketing 
product engineering
creativity
product R&D
qualitative measurement & incentive 
strong cross functional coordination
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17
Q

3 sources of competitive advantage in internationalization

A

global efficiencies, multinational responsiveness, flexibility, leveraging competencies/ learning

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18
Q

Competitive advantage: Leveraging competencies & learning worldwide

A

transferring capabilities/ competencies that are not easily imitated/ substitute
transfering distinctive competencies: companies with unique competencies can expand global markets that lack the same competencies
competencies can be created anywhere within multinational operations (subsidiaries/ suppliers/ rivals)

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19
Q

competitive advantage: global efficiency: 3 subcategory

Study These Flashcards
A

split into 3
location efficiencies
economies of scale
economies of scope

20
Q

global efficiency: location efficiencies

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A

base earch value creating activity where most favourable conditions exist (optimize value chain)
factors:
economic/political/ cultural conditions/logistics/factor costs
local skills needed to improve product- locate in industry cluster

21
Q

global efficiency: economies of scale

Study These Flashcards
A

having operations in more than one country increase total volume of production, allowing production facilite

22
Q

global efficiency: economies of scope

Study These Flashcards
A

diversifying portfolio of products to lower cost

23
Q

competitive advantage: multinational responsiveness/flexibility

Study These Flashcards
A

realising international growth through adaptation to local conditions
local taste/ custom/ regulation/ need/demographics/ physical factors

24
Q

2 conflicting pressure on IB strategy

Study These Flashcards
A

global integration and local responsiveness

leads to 4 types of international business strategy

25
pressure for global integration
globalization of market multilateral & regional reduction in trade barriers if homogenixation of consumer demand, then compete on price maximize efficiency gains of standardization on homogenous tastes
26
pressure for local responsiveness
divergent consumer tastes &preference due to culture, history, nationalism economic distance, distribution channels host gov. policies: variation in product, service standards, health, environment, financial regulation optimize effectiveness of addressing heterogenous local demands
27
motive for global integration (7)
standardize products & processes to maximize scale, experience and learning effects capitalize on converging preferences source materials/inputs directly engage global rivals build global image leverage expanding cross national connectivity respond to globalization exploit improvement on global logistic/ communication
28
motives for local responsiveness
customize products & services to local preferences/values promote a local profile/goodwill by supporting national agenda tap local inputs/ capabilities adapt to circumstance/environment accomodate differences in distribution channels& services
29
global strategy
firm views world as single market primary goal is to create standardized products low cost because value chain is built on location economics, products may be high quality target global niche decision are centralized: tight HQ coordination low pressure for local responsiveness+ high pressure for global integration
30
international strategy
applying competencies from home to overseas operation (leveraging competencies) foreign markets lack these competencies centralized HQ control foreign operation led by expatriates from home country low pressure for local responsiveness+ low pressure for global integration eg. Apple
31
localization strategy
management see overseas operation as portfolio of independent business adapted to national preference & condition customisation: maximum local responsiveness separate production, marketing, R&D in each market decentralization low experience curve/ location economies high cost structure high pressure for local responsiveness & low pressure for global integration eg. IKEA (changes), Walmart
32
translational strategy
complex process of leveraging competencies/ learning world wide shared decision making- decentralized balance between concentration for location economies/low cost and dispersion to meet local preferences high pressure for local responsiveness and global integration eg. Zara
33
responsiveness vs differentiation
differentiation: what makes firms different from others responsiveness: adapt to local condition McDo making vegetarian burgers--> responsiveness to indian culture, but not differentiating if everyone else is doing it
34
frugal innovation
innovation that aims to radically lower the price for products aiming at bottom of pyramid consumers more price oriented, but also culture oriented
35
product life cycle
new product: product in hom country, export maturing product: rivals emerged, some production shift to other industrialized countries, some imports to home, others shift production standardized product: cost is now factor, assembly shift to emerging market, home start primarily import
36
exception life cycle theory
luxury good--> low cost, people start doubting it short life cycle product might not make it low cost stage product locate near rare specialist, can't be imported
37
life cycle theory overtaken by globalization aspect
simultaneous introduction of product in other parts of the world offshoring/near shoring/ reshoring globally dispersed production: components come from different places, assembly in different place increase number of product/service with global leadership
38
National diamond
``` competive successful industry arises by interacting with 4 elements Factor condition deman conditions related/supporting industries firm strategy, structure, rivalry ``` plus maybe chance and governement
39
National diamond: Factor condition
basic factors : (must be supported by advance to succeed) natural resources, climate, location, demographics advance factor: communication, skilled labour, research, technology
40
National diamond: Demand condtion
``` size sophisication (variety) demanding customers (quality) ```
41
national diamond: related+ supporting industries
provide advantage in innovation and upgrading through: quick/ constant flow of information ongoing exchange of ideas+innovation successful industries within a country tend to be grouped into clusters of related industries
42
National diamond: firm strategy, structure and rivalry
vigorous domestic rivalry improves a company's competitiveness intense competitiveness of japanese markets forces manufacturers to continually developed + fine tune new products
43
national competitive advantage: poltical implication
promoting free trade is in home country best interest bc promote rivalry not always in the short-term interest of the firm government can't make their own clusters, but they can help clusters grow
44
national competitive advantage: location implication
disperse production activities to countries where they can be performed most efficiently
45
national competitive advantage: first-mover implication
invest substantial financial resources in building first mover, or early- mover advantage
46
limitation of national competitive advantage
implicit stages model of internalization: become competitive in home market then internationalize increasingly points on diamonds are virtual rather than domestic risk becoming rationale for government to side with certain companies

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