Exam 8: International Strategy

Because there are still several industrial and consumer markets in which only domestic firms compete, many firms do not have to be able to compete internationally.

Japan, due to a lack of undeveloped land, would be an unusual choice of location for a U.S. cattle company to set up local grazing operations. This limiting factor would be identified in what part of Porter's determinants of national advantage?

A transnational strategy is an international strategy in which the firm seeks to achieve both global efficiency and local responsiveness.

Having substantial supplies of critical basic natural resources is a necessary condition for a country to support businesses that can successfully compete in international markets.

All of the following are reasons why firms use international strategic alliances EXCEPT:

Moving into international markets is a particularly attractive strategy to firms whose domestic markets:

_________ is the set of costs associated with unfamiliar operating environments; economic, administrative and cultural differences; and the challenges of coordination over distances.

Four types of distances are associated with the liability of foreignness: cultural, administrative, geographic, and economic.

A reason that firms use international strategies is to secure needed resources, especially minerals and energy.

Discuss the three international corporate-level strategies. On what factors are these strategies based?

What are the incentives for firms to use international strategies? What are the three basic benefits firms can derive by moving into international markets?

Michael Porter's Determinants of National Advantage describe factors associated with the firm's domestic environment that contribute to its dominance in a particular global industry.

When a firm initially pursues an international business-level strategy, the resources and capabilities established in the home country frequently allow the firm to pursue the strategy into markets located in other countries.

A major advantage of multi-domestic strategies is the ability to customize products and services for the specific market, although this sacrifices economies of scale.

The chief risks in the international environment are political and cultural.

In Porter's model, if a country has both ________ and __________ production factors, it is likely to serve an industry well by spawning strong home-country competitors that can also be successful global competitors.

Although licensing is the least costly method to enter a foreign market, its disadvantages include high costs of transportation and low control over the marketing and distribution of goods.

A multi-domestic corporate-level strategy is one in which:

Research suggests that wholly owned subsidiaries and expatriate staff are inappropriate for service industries because those industries require close contact with customers, high levels of professional skills, specialized know-how, and customization.

Research has shown that, as international diversification increases, firms' returns decrease initially but then increase quickly as firms learn to manage international expansion.