Global Business Summary all

Global Business Summary all - Global Business Summary...

Info icon This preview shows pages 1–3. Sign up to view the full content.

Global Business Summary Chapter 1: Expanding Abroad Motivations, Means and Mentalities Change: world-wide operations Access to new markets & low-cost resources New sources of information and knowledge New strategic moves in competing with domestic and international rivals Vehicle of internationalization = MULTINATIONAL ENTERPRISE (MNE) Definition of MNE: Substantial direct investment in foreign countries, not just import-export relationships Active management of offshore assets rather than passive investment portfolio Developed only in the post WW II years UN definition: a) comprising entities in two or more countries , regardless of legal form & fields of activity; b) system of decisions under coherent policies and common strategy through one or more decision-making centers; c) linked by ownership or otherwise able to execute significant influence over activities of others, share knowledge, resources and responsibilities active, coordinated management of operations located in different countries Traditional Motivations: Secure key supplies Market seeking behavior (e.g. home market too small, brand recognition, technology) Access to low-cost factors (low-cost capital, labor) Pre-MNE stage: export unit within the home office oversee growing export levels; next stage: standardized, important part of revenues Emerging Motivations: Economies of scale, ballooning R&D investments, shorter product life cycles Global scanning and learning capability (market opportunities new technologies or market needs innovative product development) Competitive positioning: e.g. cross-subsidization subsidize one market drive out competitors with profits from other markets) GLOBAL CHESS Prerequisites for Internationalization: Location specific advantages = MOTIVATION Familiarity with national culture, industry structure, government requirements, etc. natural advantage (existing relationships with suppliers, governments) STRATEGIC COMPETENCIES: Advanced technologies, knowledge/ skills or economies of scale in R&D does not succeed without distinctive competency to overcome liability of foreigness
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

ORGANIZATIONAL CAPABILITIES to leverage strategic assets more effectively through own subsidiaries than contractual relations with outside parties (licensing, franchising) Process of Internationalization: Uppsala model: company makes initial commitment of resources to foreign market gains local market knowledge better evaluation of its current activities subsequent commitment (e.g. buying local distributor or plant) necessary local capability & market knowledge ( assimilation of local market knowledge) But: some companies also invest in local partners as a short-cut Also important: level of market commitment vs. level of control needed (low-low = export; high- high = joint venture, highest-highest = own subsidiary) International Mentality: Earliest stages of internationalization
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '16
  • BrianHilton
  • Globalization, Corporation, local market knowledge

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern