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【G4】International Strategy (Patterns of Internationalization (High…

- - - - Recardian Rent
        
        Capability
        
        .
        
        Imitation Barrier
    - - Schumpeterian Rent
        
        .
        
        Value
        
        Innovation
    - - Monopoly Rent
        
        .
        
        Entry Barrier
        
        Opportunity
- - - - Internationalization #
        
        refers to the potential for a firm to enter foreign markets, and for foreign competitors to enter a firm's domestic market.
        
        Local Responsiveness Demand
        
        The extent to which products, services and business functions require adaptation to local conditions
        
        Global Integration Supply
        
        The extent to which production of goods and provision of services for the entire globe are more efficiently or effectively performed in only one or a few places
        
        Strategy Choice
        
        Multi-domestic Strategy
        
        Transnational Strategy
        
        Global Strategy
        
        Home Replication
- - - - Global
        Industries
  - - - .
        
        High
        
        Multi-Domestic
        Industries
- - - - Indirect Exports
      - Direct Exports
      - Pros and Cons
        
        Advantage
        
        Rapidly enter new markets
        
        Distribution channels
        
        Excess domestic capacity or EOS
        
        No operations in other country
        
        Disadvantage
        
        High transportation costs
        
        High import tariffs
        
        Less control of marketing distribution
        
        Producti customization harder
    - - Turnkey Project
      - R&D Contracts
      - Licensing&Franchising
      - Co-Marketing
      - Pros and Cons
        
        Advantage
        
        Local partner provides knowledge
        
        low transit costs/tariffs
        
        Gain local cost or production advantages
        
        Disadvantage
        
        reduced profit potential
        
        specifit assets hard to transfer
        
        product quality
        
        divergent goals
        
        capability and compete
  - - - 50/50 JVS
      - Majority JVS
      - Minority JVS
      - Pros and Cons
        
        Advantage
        
        Political dependency.
        
        Access to local partner's knowledge.
        
        Share development costs and risks.
        
        Disadvantage
        
        Inability to engage in global strategic coordination.
        
        Inability to realize and experience-curve economies.
        
        Lack of control of tech.
    - - Acquisitions
      - Green-Fields
      - Pros and Cons
        
        Advantage
        
        Greatest control over tech, marketing, and distribution.
        
        Operations can be expanded incrementally as the firm learns.
        
        Appropriation of value by others least likely.
        
        Disadvantage
        
        Need to acquire additional expertise relevant to host country(how to establish as well as conduct operations)
        
        Local responsiveness limited during ramp-up phase.
      - Pros and Cons
        
        Advantage
        
        Enables firm to make rapid entry
        
        Appropriation risks still limited
        
        Perception (and liability) of “foreignness” overcome more easily.
        
        May be able to use acquired firm’s political influence.
        
        Disadvantage
        
        1Costly to acquire firms (synergy trap)
        
        Usually requires complex and costly negotiations.
        
        Difficult to merge disparate cultures.