Week_6_Course_Materials

Week_6_Course_Materials - Entry Strategy and Strategic...

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Entry Strategy and Strategic Alliances
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Basic Entry Decisions n Which markets to enter? n When to enter the markets? n What scale of entry?
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Which Foreign Markets n Favorable benefit-cost-risk-trade-off: n Politically stable developed and developing nations. n Free market systems n No dramatic upsurge in inflation or private-sector debt. n Unfavorable n Politically unstable developing nations with a mixed or command economy or where speculative financial bubbles have led to excess borrowing. .
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Timing of Entry n Advantages in early market entry: n First-mover advantage. n Build sales volume. n Move down experience curve and achieve cost advantage. n Create switching costs. n Disadvantages: n First mover disadvantage - pioneering costs . i Changes in government policy.
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Scale of Entry n Large scale entry n Strategic Commitments - a decision that has a long-term impact and is difficult to reverse. n May cause rivals to rethink market entry. n May lead to indigenous competitive response. n Small scale entry: n Time to learn about market. n Reduces exposure risk.
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The Strategy of International Business
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The Firm as a Value Chain n Primary Activities: n Those activities having to do with creating, marketing and delivering the product to customers and providing support and after-sales service. n Support Activities: n Provide inputs that allow primary activities to occur. n An Efficient Infrastructure: n helps create value and reduce the cost of creating value.
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The Firm as a Value Chain Organizational infrastructure Information systems Human resources Research and development Materials management Manufacturing Marketing Primary activities Support activities The Firm as a Value Chain
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The Role of Strategy n Strategy: n Actions managers take to attain the goals of the firm. n Need to identify and take action that lowers the cost of value creation and/or differentiates the firm’s product through superior design, quality, service, or functionality.
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Profiting from Global Expansion n International firms can: n
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This note was uploaded on 02/24/2010 for the course ACCOUNTING 578844 taught by Professor Mctosh during the Spring '10 term at UCLA.

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Week_6_Course_Materials - Entry Strategy and Strategic...

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