Gm has a real dilemma with its china exposure this

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Essentials of Marketing
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Chapter 5 / Exercise 4.2
Essentials of Marketing
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GM has a real dilemma with its China exposure. This situation might best be referred to as double jeopardy. SAIC is currently a partner in one of GM’s few bright spots, but has developed the capability to become an intense competitor in both China and the United States. And GM has been SAIC’s mentor. What sort of international strategy should GM implement to protect its recently developed China turf as well as protect its United States’ market from interlopers? Ask students to identify strategic alternatives that GM should consider. Is it reasonable to do nothing to protect its shrinking market share in the United States and rely on its current U.S. competitors to protect the U.S. market? Location Advantages Firms also may be able to achieve a comparative advantage and lower the basic costs of their products by locating facilities in low-cost markets for critical raw materials, cheap labor, key suppliers, energy, customers, and/or natural resources. Teaching Note: The large and unified market of the European Union is attracting considerable investment from international companies, and European markets and firms are undergoing substantial changes to take advantage of the economies of scale, potential learning, and advantages of location. The common currency and integration of capital markets have reduced financial risks and made available significant amounts of capital that were previously unavailable in the separate country markets. (This may be a good place to discuss the euro and its impact on global business.) Other factors that may impact location advantages are as follows: the needs of intended customers, cultural influences (if there is a strong match between the cultures involved, the liability of foreignness is lower than if there is high cultural distance), 8-6
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Essentials of Marketing
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Chapter 5 / Exercise 4.2
Essentials of Marketing
Hair/Lamb
Expert Verified
Chapter 8: International Strategy regulation distances which influence the ownership positions of multinational firms as well as their strategies for managing expatriate human resources. INTERNATIONAL STRATEGIES International strategies available to firms are business-level and corporate-level (cf. Chapters 4 and 6). Business-level strategy choices are generic, extending our earlier discussion of cost leadership, differentiation, focus, and integrated cost leadership/differentiation strategies. Corporate-level strategies are dependent on the complexity and scope of product and geographic diversification, and these include multidomestic, global, and transnational (hybrid) strategies. 2 Explore the four factors that provide a basis for international business-level strategies. International Business-Level Strategy Each business must develop a competitive strategy focused on its own domestic market. Business-level generic strategies are discussed in Chapter 4, but international business-level strategies have some unique features.

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