Protects technology competitive advantage disadv

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Protects technology/ competitive advantage DISADV Highest cost/risk Requires greater expertise/ knowledge Ownership JV Partner w/ another firm -- form new entity
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ADV Knowledge synergies Shares risks and costs Surmount political and/or trade barriers DISADV Loss of control Limited global coordination Share profits Coordination challenge Greenfield Strategy Start operation from scratch: Obtains land, constructs facilities, hires workers/managers, etc. Acquisition Strategy Buy existing company in the foreign country Integrate into operations WOS: Greenfield or Buy-out ? Trade-offs between Greenfield & Acquisition (Buy-out) Greenfield: less ‘baggage’ acclimate at own pace customize to firm’s needs Acquisition: time to begin operations country expertise new technology EXTERNAL (Does not involve FDI, small risk ) Exporting / Importing Licensing Franchising Strategic Alliances (non-equity partnerships) INTERNAL (These involve FDI) JV (joint ventures) (equity partnerships) WOS = wholly owned subsidiaries (100%) (Firms own 100% of shares in a foreign country) Buy-out = Acquisition Greenfield
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  • Fall '14
  • Corporation, Types of companies, Limited local control

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Christopher Reinemann
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