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Why enter foreign markets?
- 1. access new customers
- 2. exploit core competencies
- 3. spread business risk
- 4. lower costs
- 5. access resources/ capabilities
define political risks
stem from instability or weaknesses in national governments and hostility to foreign business.
define economic risks
stem from the stability of a country's monetary system, economic and regulatory policies, reliability of infrastructure, and the lack of property rights protections
What are some positive and negative factors to consider before doing business in a country
- - tax incentives
- - low tax rates
- - low-cost loans
- - site location and development/incentives
- - worker training
- Negative - environmental regulations
- - subsidies and loans to domestic competitors
- - import restrictions
- - tariffs and quotas
- - regulatory approvals
- - minority ownership limits
what are the 3 strategies for competing globally and describe them?
multidomestic - think local act local (most local responsiveness)
global - think global act global (most efficient)
transnational - think global act local
what are three ways to build a competitive advantage in international markets?
- 1. use international location to lower cost or differentiate product
- 2. share resources and capabilities
- 3. gain cross-border coordination benefits
define international competition
when the same companies compete against one another in multiple geographic markets, the threat of cross-border counterattacks may be enough to deter aggressive competitive moves and encourage mutual restraint among international rivals
selling goods in foreign markets at prices that are below 1) normal home market prices and 2) below the full costs per unit
What would you like to do?
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