BA 469 lecture ch8 - 8 Strategy in the Global Environment 1 Related Concepts/Theories Theory of comparative advantage a country is ahead and all

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1 8 Strategy in the Global Environment
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2 Related Concepts/Theories Theory of comparative advantage – a country is ahead, and all other country’s benefit, if A country produces a product where it has comparative advantage, i.e. cost of production. Uses the revenues to purchase other products Tariff and non-tariff barriers Tariffs are levied on incoming products Non-tariff barriers can come in many forms, with the intent of protecting local production
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3 The world is flat . . . (Friedman) Three converging developments A global, Web-enabled playing field that allows multiple forms of collaboration Gradual adaptation of organizations through horizontal collaboration in the value creation process Opening of economies like China, India, Russia, and in Eastern Europe, Latin America, and Central Asia to the world economy – 3 billion people
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4 Going International, Global Initial strategies to do business outside one’s borders Strategies for firms with on-going overseas business
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5 Basic Entry Decisions Which overseas markets to enter Psychological closeness Assessment of long-run profit potential A function of the size of the market, purchasing power of consumers, the likely future purchasing power of consumers Balancing the benefits, costs, and risks associated with doing business in a country A function of economic development and political stability
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6 Basic Entry Decisions (cont’d) Timing of entry First-mover advantages First-mover disadvantages Scale of entry and strategic commitments Entering on a large scale is a strategic commitment, both positive and negative Benefits and drawbacks of small-scale entry
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7 Process of Expansion Expansion outside the comfort of one’s
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This note was uploaded on 10/22/2010 for the course BUS 496 taught by Professor Staff during the Spring '08 term at University of Nevada, Las Vegas.

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BA 469 lecture ch8 - 8 Strategy in the Global Environment 1 Related Concepts/Theories Theory of comparative advantage a country is ahead and all

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