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INTERNATIONAL BUSINESS STRATEGY (ENTRY MODES (STRATEGIC ALLIANCES (EQUITY…

- - - - Regional Exporters/ Importers
        LOW R&D, LOW Marketing
      - Global Exporter/ Importers
        LOW R&D, HIGH Marketing
      - Technology Fast Followers
        Technology Leaders
        Global Market Niche Players
        HIGH R&D, LOW Marketing
      - Multinational Challengers
        HIGH R&D, HIGH Marketing
    - - SPECIALISE in cost-efficient and mass-scale manufacturing
        
        PERPETUATE COST ADVANTAGE
        by spreading own value-chain across borders
        
        INCREASE ADDED VALUE by increasing value chain
        
        SPECIALISE in niche market of the value chain.
- - - - LOCATION BOUND (LB) FSA
        hardly transferable corporate strengths that are expensive to transfer or lose much of its value.
        (i.e. Network of local suppliers, Access to Natural Resources, Local Marketing Knowledge
      - LOCATION ADVANTAGE (LA)
        represents the entire set of strengths in a specific location that can be used by firms operating in that location.
        (i.e. Natural Resources, Institutional Systems, Market Demand, Bilateral Agreements)
      - HIGHER ORDER FSA
        Value Creation Through Recombination
        
        ROUTINES
        Firm's ability to combine existing resources into bundles.
        
        RECOMBINATION CAPABILITY
        Firm's ability to recombine its resources in novel/ innovative ways.
        This requires entrepreneurship spirit of the managers, slacks and trade-offs.
        Similar to Prahalad and Hamel's Core Competence
        
        PATTERN 1: NLB FSA transferred internationally right away.
        
        PATTERN 2: LB FSA developed, tailored and transferred internationally.
        
        PATTERN 3: NLB FSA + LB FSA before transferred internationally.
        
        PATTERN 4: LB FSA developed in different countries the MNE is operating in before being transferred and exploited locally in each host country.
        
        PATTERN 5: NLB FSA is developed by foreign affiliates autonomously before transferred internationally.
        
        PATTERN 6: NLB FSA is developed by foreign affiliates under HQ guidance before transferred internationally.
        
        PATTERN 7: NLB FSA developed in different countries the MNE is operating in under HQ guidance before being upgraded, transferred and exploited internationally.
        
        PATTERN 8: NLB FSA developed in different countries the MNE is operating in autonomously before being upgraded, transferred and exploited internationally.
        
        PATTERN 9: NLB FSA developed + Domestic LB FSA in different countries the MNE is operating in added autonomously before being upgraded, transferred and exploited internationally.
        
        PATTERN 10: LB FSA developed in a specific country before upgraded into NLB FSA and transferred under HQ guidance.
      - NON-LOCATION BOUND (NLB) FSA
        is transferable corporate strength to foreign country.
        (i.e. Technology, Blueprint, Global Brand Reputation, General Marketing Knowledge)
    - - MULTI-CENTERED MNE - Pattern 4
        High Autonomy, Low EoS
        Works like a holding company, their foreign operations are very much independent and develop their own FSAs and LAs to be responsive. The HQ only transfers key routines and the only thing that holds them together is usually financial support from the HQ and holders' interests.
        (i.e. Construction Companies, AB-Inbev, Old European Firms)
        
        INTERNATIONAL COORDINATOR - Pattern 5 or 6
        Low Autonomy, High EoS
        They are specialised in linking geographically dispersed operations through seamless logistics. They transfer their NLB FSA according to the LA they want to access.
        (i.e. Oil Refinery, Airbus, Apple)
        
        CENTRALISED EXPORTER - Pattern 1
        Low Autonomy, High EoS
        Focuses on transferring their NLB FSA in the form of standardised products TO the host country to capture location advantages. Their foreign activities are only on downstream activities (Marketing, Sales, Logistics).
        (i.e. Hollywood, Rolex)
        
        INTERNATIONAL PROJECTOR - Pattern 1
        Low Autonomy, Low EoS
        They project their success recipe abroad by replicating their NLB FSAs IN the host country (usually Tacit knowledge) by the help of expat managers.
        (i.e. Disney, Ford, franchises)
  - - - PREREQUISITE:
        • Generally Applicable: can be exploited in new environments.
        • Inimitable: distinct and unique.
        • Critical: very important and cannot be easily replaced.
        • Effective: give significant contribution.
      - WEAKNESSES
        
        LAs are irrelevant since CCs are always NLB.
        
        Relocation of Competence Carriers may harm, since co-location is essential.
        
        Overlook competitions who can develop CCs.
        
        Bounded rationality and reliability risk on centralised approach.
        
        Streamlining of operations decrease responsiveness.
- - - - FRANCHISING
      - MERGER & ACQUISITIONS
        
        Modified Herfindahl-Hishman Index
        Measures the size of firm relative to the size of the industry and an indicator of the amount of competition between them
        
        Typical Management Biases:
        
        Revenue oriented.
        
        Overvaluation of the firm.
        
        Imitating competitor.
        
        Personal bias.
        
        Third-party bias.
        
        Alternatives to M&A:
        
        Divestment or Spin-offs
        
        Focus on exploiting FSAs
        
        Strategic Alliances (i.e. JV)
        
        Slow your competitors' M&A
        
        Wait
        
        Sell
        
        Stay
        
        MOTIVATIONS
        
        HORIZONTAL and RELATED MERGERS
        
        Revenue improvement
        
        Cost Saving
        
        Growth Opportunities
        
        Decrease Competition
        (i.e. HP and Compaq)
        
        VERTICAL MERGERS
        
        Technical Efficiency
        
        Coordination Efficiencies
        (i.e. Automobile and their OEM)
        Trying to gain efficiency across the value chain.
        
        CONGLOMERATE MERGERS
        
        Economic
        
        Resource Based (ie. Synergy, excess resources)
        
        Finance (i.e. Risk reduction, debt capacity or tax benefit)
        
        Managerial (i.e. Risk diversification)
        
        Organisational (i.e. Costs)
        (i.e. Virgin)
      - LICENSING
      - JOINT VENTURE
        Usually done when Wholly Owned Subsidiary (WoS) is prohibited.
    - - SUBCONTRACTING
      - CONSORTIUM
        Similar to JV, but partners maintain their legal rights
    - - HAMEL ET AL
        
        LEARNING RACE
        Each companies are competing to learn as much as possible while protecting their own market share and trade secrets.
        :warning:Usually won by Local Firms because they can learn from their counterpart's codified standalone FSAs.
        :!: Some alliances only want to do cooperative specialisation by bundling their FSAs into a new form.
      - ANDERSON & JAP
        
        BOUNDED RELIABILITY due to DEPENDENCE
        Also due to asymmetrical learning and alliance-specific investments.
        Safeguards:
        
        Regular re-evaluation;
        
        Attention to alternative investments;
        
        Swapping hostages.
      - KALE & ANAND
        
        PARTNER CONTRIBUTIONS
        
        MNE
        NLB FSAs such as technology, management skills, and financial capitals.
        
        ALLIANCE SPECIFIC ADVANTAGE
        Advantage embedded in the alliance and can only be exploited collectively.
        :check: Creates mutual dependence, increasing alliance stability.
        :warning: Should be critically assessed if similar FSA can be cultivated without forming an alliance.
        :!: Future clashes due to cultural differences.
        
        LOCAL FIRM
        LB FSAs such as governmental ties, market knowledge, distribution channels.