mktg 440 Flashcards
exam 2 (101 cards)
1
Q
industry
A
Firms produce substitutes and a swayed by rate of return
2
Q
Trade policy that effects competition
A
Shifts resources to more productive use
3
Q
Factors that affect competition (5)
A
- New entrants
-barriers for new entrants
-substitutes
-microfactors
-macrofactors
4
Q
Barriers for new Entrants
A
- economies of scale
-Production differentiation
-Capital Requirements
-switching costs of changing suppliers
-access to distribution channels
-favorable access to raw materials
-government policy
-expected customer response
5
Q
Core competencies
A
Understand the needs of the customer and meet them
-adapt to mkt development
6
Q
Global vs. Global competition methods
A
- Cross-country subsidiarization
-counterparry
-globally coordinated move
-target global competitors
7
Q
Cross country subsidiarization
A
using profit in one country to subsidize
8
Q
counterparry
A
defend against competitive attack by counter attacking
9
Q
Globally coordinated moves
A
The employing of simultaneous actions across countries to gain competitive advantage over global or local rivals
10
Q
Global vs local competition methods
A
-defender
extender
contender
dodger
11
Q
defender
A
plan and prepare to defend local market
12
Q
Extender
A
extend business in overseas markets using ccs and practices learned in domestic market ex: south african breweries
13
Q
contender
A
Contend in overseas market by first exploiting segments that global competitors do not have
14
Q
dodger
A
not enough resources to compete, so cooperate (sell out, become local distributor for mnc)
15
Q
Keiretsu
A
network of interlocking corporate affiliates -system or order
16
Q
(SOE)
A
- State owned enterprise
companies majority ownership held by government
17
Q
soe advantages
A
local market protection
cheaper financing
18
Q
soe disadvantages
A
less international experience
general inneficiency
19
Q
Family owned
A
strongest competitors to MNC of local business groups
20
Q
ADV. local business groups
A
market knowledge
handling of government relations
21
Q
disadv. local business groups
A
no global brand name
limited global presense
excessive diversification
22
Q
How home countries influence competitiveness
A
- gov subs
-toleration to monopolies
-national champions
-toleration to intellectual property theft
23
Q
effects of country origin on consumers
A
- dilution
-experts less affected
24
Q
negative effects of country of origin
A
-work to make the name good
25
political forces
-instability
-pressure groups in host country (china vs MNC's
26
Actions to interfere with foreign operations from host country
-jawboning
operational restrictions
transfer risk
ownership restrictions
takeovers
27
jawboning
informal gov
intervention w out legal basis
voluntary export quotas
28
operational restrictions
imports, local content rules, taxes, health, pricing
29
Transfer risk
capital or profits out of country
30
ownership restrictions
required part of ownership of foreign bus
31
types of takeovers (C.E.N.D)
-confiscation
-expropriation
-nationalization
-domestication
32
Confiscation
A governments taking of a privately owned business or personal property without a proper public purpose or an award of just compensation
33
Expropriation
business seized and given to locals, some compensation
34
Nationalization
government take over bus, some compensation
35
domestication
changing character of bus overtime, majority owned by locals (exprop) or nationalized bus given to private local sector
36
1. why dont strategies of big corps work in developing countries
- emerging markets are so volatile that most mnc's cannot apply the strategies they have developed.
37
6 part strategy the author's research revealed among the 50 successful local companies
local companies not constrained by existing products or notions about consumer needs
customize products to meed customer needs
business models overcome roadblocks and yield C.A.
Turn globalization to adv.
innovative ways to benefit from low cost labor pools and over come work shortage
go national ASAP- keeps regional competitors away
management skills underestimated by MNC'S
38
How do MNC's beat locals?
copy their strategies
develop new ones that cannot be easily copied
39
competitive advantages of kiranas compared to global giants
low cost structure (rent, wages, op ex)
personal relationship with customers that result in quick deliveries
convenience and satisfaction
40
steps to kiranas taking to stay competitive
accept cashless payments through e-wallets
communication through messaging rather than over the phone
and turning to e-comm sites to supply
41
steps walmart is taking to compete with aldi and lidl
hone store brand product selection
lower prices and get basics right
speeding up checkout lines
chief exec - doug mcmillon
42
how are consumer goods being affected by us grocers attempt to compete w aldi and lindl
many are worried that price competition among retailers could squeeze them as well since companies count on walmart for millions of dollatrs in annual sales.
43
aldi and lindl success in us?
yes, aldi around for 40 years and only 1% ms
44
Domains of pressure from home country groups (B.E.PP)
product strategoes
pricing
environmental issues
boycotts
45
Government actions on MNC from host country
- embargo
-sanction
46
steps to manage political risk (7)
-local partner
-minimize asset risk
-stimulate
-lockal economy
-behind the scense lobbying
-employ nationals
-civic minded
47
direct effects of terrorism
create terror
effect on education
tourism industry
48
indirect effect of terrorism
-increased gov regulation
-increased cost of secure supply chain
-increased security of corporate personnel
49
political risk insurance
-currency inconvertibility
-expropriation
-breach on contract
-war, revolution, insurrection
-nonhonoring of financial obligations
50
OPIC: overseas private investment corporation
-promotes econ devel in emerging markets through investment insurance and credit financing
-self sustaining receives no public funds- independent
advances us foreign policy and national security priority
51
MIGA: Multilateral investment Guarantee Agency
member of world bank group
promotes private investment in developing countries by ensuring political risk
52
FCIA- foreign credit insurance association
insures US exports against commercial and limited political risks
53
local vs foreing reg environments
-multiplicity of laws
- most regulated industries
-us has most strict laws for products
54
jurisdiction
disputes resolved in country business is located
55
alien tort claims act
foreign nationals can sue american companies for overseas crime
56
arbitration
quick
inexpensive
preserves business groups
57
Why do mnc prefer subsidiaries
-easy to recruit talent
-quick market access
-circumvent gov restriction
-tax adv.
-lim liability
-separate legal entitiy
58
intellectual property
works of authorship, inventions, trademarks, trade secrets
59
ip protection
copyright
patent
trademark
60
copyrigjht
document granting exclusive right to publish and sell literarty or musical or artistic work expression of own ideas
61
duration of copyright protection
70 years after artists life
95 years for corporations
62
patent
protects invention orfscientific/ technical nature
grant from the gov to an inventor in exchange for public disclosure giving the patent holders exclusive rights to functional and design inventions.
63
duration of patents
utility- 20 years
design- 15 years
64
trademark
any sign, or any combination of signs, distinguishing the goods or services of an enterprise
65
paris union
-priority rights
-national treatment
-independence of patents
66
priority rights
register patent in one member country hv one year to register it in other member countries
67
national treatment
for member nations' applications
68
independence of patents
revocation or expiration in country of original filing has no effect on its validoty in other countries
69
Trade related aspects of trips
Patents available for any technological invention
70
traits necessarry for TRIPS
-new
-industrial application
-available for any invention
-no harm to humans, animals, plants, environ
-mere discoveries are patentable
-software
71
TRIPS compulsory license
allowed for life saving medicines for LDCS
-gov may grant w out grant of patent holder
-license for domestic use
-gove decides reasons for licensing
-negotiate in good faith
-patent holder keeps patent
-limited scope
72
counterfeiting
illegal copy of products
penatlites with fines up to 1 mil alnd 15 yr in prison
73
Difficulties controlling counterfeits
low risk and high profit
time consuming to get warrant
proof of fake needs to be seized
law agencies do not make extra efforts
74
how to protect against counterfiet
educate employees
keep up w best practices
do not tell employees everything
75
actions to stop ip theft
super 301 report
special 301 report
76
how to protect ip theft
same as cf
77
types of market
stand alone attractive
globally strategic
geographic
78
stand alone attractive markets
- market size
-growth rate
-competitive positon
-gov
79
globally strategic markets
must win markets
home market of global customers
home markets of global competitors
lead markets
80
geogrpahic markets
groups of countries
developed countries
81
errors in country selection
ignor countries with good potential and too much time spent on poor potential countries
82
reasons for market exit
tough competition
financial problems
operational difficulties
refocus on home market
83
market exit consequences
market is lost
emboldens competitors
credibility in other markets is lost
costly to close operations
84
export adv
minimal risk and a wat to enter foreign market
economies of scale
85
export disadv
not always optimal strategy
strategy is poor when currency is strong in home country
86
inderect exporting
use of intermediaries in home country
87
intermediaries
-brokers
-export agents
-export management
-group export activity
-trading company
88
adv. of indirect exporting
little to no investment
no in house personall needed knowlesfe
89
dis adv indirect export
lack of control in foreign markets
limited service
90
direct exporting
internet use to export directly
91
adv to company owned export department
more marketing control
92
intermediaries of direct exporting
agents
merchants
marketing subsidiary
93
licensing
assigns rights to a copyrigt, patent, trademark
94
adv to licensing
-increase in profit
-protects trademarks
-penetrates closed markets
-use when capital is scarce
-foreign country market potential is too small
95
franchising
comprehensive form of licensing
96
issues with franchinsing
-finding the right one
-complaints
-fraud
-incompetent franchisers
97
master franchise
aquires exclusive rights to city, country, or region
98
types of manufacturing
contract
assembly
full scale integrated production
99
contract manufacturing
viable strategy in low volume potential markets
in high tariff markets
key factors are randd or marketing production technology is standard
100
assembly manufacturing
locating portion of operations in foreign policy
less capital
more labor
only option to enter closed markets
101
full scale integrated production manufacturing
max commitment, risk, and control
viable strategy in large market
