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CS-3, power of the buyer, the price rivalry or competitive rivalry, the…

- - - - more specific priorities of individual companies
        
        global operation strategies
        
        percentage of sales from international market are different
        Ex.Nike, Levis- over 50%
      - different motivations companies have
        
        Ex. iRobot
        
        manufactures cleaning system
        
        reasons to expand Internationally
        
        expand market
        
        access better or lower cost factors
        
        technology
      - leverage the core capabilities in international market
        
        Ex. McDonald
        
        opportunities to develop new capabilities
        
        location advantage
        
        learning from their operations
  - - - No.1 in Ag equipment
        
        know which market to win in
        
        the markets don't look too different from other heartland companies
        
        products are central to human flourishing
  - - - local partner
      - broder scope of joint venture
    - - jointly owned independent company
      - contributed resources
      - manage jointly, share in profits
    - - contact with local partner
      - transfer intangibles
      - monitor performance
    - - established a 100% owned unit in a foreign country
      - Greenfield: build the unit from scratch
      - Brownfield: acquire fixed assets and reuse
      - acquisition: buy a local company and integrate
    - - sale into foreign markets
      - direct export or via agent
  - - - Netflix in Canada
        
        bilingual laws and to deal with the different currency
  - - - reasons to succeed
        
        improvements in communication
        
        the Internet
        
        International flows of talent and entrepreneurs
        
        combination of local country
        and supportive government policies
        
        example
        
        special export-oriented zones
    - - take a low-risk approach like exporting or licensing
      - form an alliance or joint venture with a local firm
- - - - scale economies
    - - four quadrants
        
        a global standardization strategy
        
        face strong pressures for cost reduction
        
        a localization strategy
        
        face strong pressures to respond to local needs
        
        an international strategy
        
        both low
        
        a transnational strategy
        
        both high
  - - - Eg selling starbucks cofee internationally
    - - Eg nestle customized product offering international market
    - - Eg Lenovo R&D is in Beijing , shanghai & Raleigh . Production center in Mexico, India &China
    - - Eg German multimedia conglomerate Bertelsmenaj Hailer in appliences , ABB in engineering product &services
  - - - Esssential in an era globalization
- - - - the late 1800s and early 1900s
        
        globalization 1.0
      - Today
        
        FDI
      - the 1960s
        
        global GDP grown from 22 % to over 50%
  - - - similar course
        
        In 1970s
        
        the tariffs in the USA came down for imports
        
        developing countries attend
        
        China: trade surplus
        
        India : trade deficit
      - developed countries against policies
        
        MNEs
        
        very small fraction of firms,
        but tend to be a large and significant firms for economy
        
        crucial activity
        
        FDI
        
        investment in actual productive assets undertaken by companies
        
        FPI
        
        investment, buying stocks or bonds or putting money in a fixed deposit or bank account
      - through painstaking negotiations and treaties between countries
        
        EU, NAFTA, WTO
    - - transportation
        
        the cost of sea freight
        
        air transport costs
      - telecommunications
        
        The Internet, email, social media
- - - - specific characteristics of demand in the firm's domestic market
    - - competitive environment that firm faces
        
        ex.Volkswagen, BMW, Daimler compete in German market
    - - ex.pharmaceutical industry in Switzerland
    - - nation's endowments
        
        human
        
        other resources
        
        supportive infrastructure and institution
        
        national