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Unformatted text preview: Chapter 8: International Strategy Chapter 8 International Strategy KNOWLEDGE OBJECTIVES 1. Explain traditional and emerging motives for firms to pursue international diversification. 2. Identify the four major benefits of an international strategy. 3. Explore the four factors that provide a basis for international business-level strategies. 4. Describe the three international corporate-level strategies: multidomestic, global, and transnational. 5. Discuss the environmental trends affecting international strategy, especially liability of foreignness and regionalization. 6. Name and describe the five alternative modes for entering international markets. 7. Explain the effects of international diversification on firm returns and innovation. 8. Name and describe two major risks of international diversification. CHAPTER OUTLINE Opening Case Entry into China by Foreign Firms and Chinese Firms Reaching for Global Markets IDENTIFYING INTERNATIONAL OPPORTUNITIES: INCENTIVES TO USE AN INTERNATIONAL STRATEGY Increased Market Size Return on Investment Economies of Scale and Learning Location Advantages INTERNATIONAL STRATEGIES International Business-Level Strategy International Corporate-Level Strategy Strategic Focus Country Conditions Spawn Successful High Tech Firms in Emerging Markets ENVIRONMENTAL TRENDS Liability of Foreignness Regionalization CHOICE OF INTERNATIONAL ENTRY MODE Exporting Licensing Strategic Alliances Acquisitions New Wholly Owned Subsidiary Dynamics of Mode of Entry STRATEGIC COMPETITIVE OUTCOMES International Diversification and Returns International Diversification and Innovation Complexity of Managing Multinational Firms RISKS IN AN INTERNATIONAL ENVIRONMENT Political Risks Economic Risks Limits to International Expansion: Management Problems Strategic Focus The Continuing Threat to Legitimate Companies from Counterfeit or Fake Products SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES VIDEO CASE NOTES 8-1 Chapter 8: International Strategy LECTURE NOTES Chapter Introduction : This chapter examines opportunities facing firms as they seek to develop and exploit core competencies by diversifying into global markets. In addition, it addresses different problems, complexities, and threats that might accompany use of the firms international strategies. Although national boundaries, cultural differences, and geographical distances all pose barriers to entry into many markets, significant opportunities draw businesses into the international arena. A business that plans to operate globally must formulate a successful strategy to take advantage of these global opportunities. Furthermore, to mold their firms into truly global companies, managers must develop global mind-sets....
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