D 300 chapter 13 strategy of international business

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D 300 chapter 13 strategy of international business
2015-03-14 12:13:05
exam 2
exam 2
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  1. strategy
    Low cost strategy vs differentiation strategy
    • can be define as the actions that a manager take to attain the goal of the firm
    • LCS- driving down the overall cost structure
    • DS- Increasing the value for consumers by differentiating the products , consumers more willing to pay a premium price
  2. to maximize a firms value, managers must increase it
    profitability and profit growth rate
  3. Primary and Support activities in the value chain
    • value chain- composed of a series of distinct value creation activities.
    • Primary- have to do with the design , creation, and delivery of the product (R&D)
    • Support- provide inputs that allows sthe primary activities to occur.(ex information systems, logistics,HR)
  4. two types of strategies for value creation
    lower cost and differentiation
  5. Location economies 387
    which are the economies that arise from performing a value creation activity in the optimal location for that activity, wherever in the world that might be
  6. Global expansion and profitability four factors
    • developing core competencies
    • Achieving location economies
    • Gaining experience effects
    • Leveraging subsidiary skills
  7. global companies face two types of competitive pressures
    • Cost reduction
    • being locally responsive
  8. choosing a strategy ( very important from this chapter) 397
  9. Experience Effects
    experience curve- refers to systematic reductions in production cost that have been observed to occur over the life of a product
  10. Learning Effect
    refer to cost savings that come from learning by doing
  11. Economies of Scale
    refer to the reductions in unit cost achieved by producing a large volume of a product. Attaining economies of scale lowers a firms units cost and increase its profitability
  12. two way to deal with cost pressures
    • Pressures for cost reductions-394
    • Pressures for local responsiveness-394
  13. Pressures for local responsiveness
    arise from national differences in consumer tastes and preference ,infrastructure, accepted business practice. A firm must differentiate its product and marketing strategy from country to country to accommodate these factors.
  14. universal needs
    exist when taste and preference of consumers in different nations are similar if not identical (pressure for cost reductions)
  15. Global standardization strategy
    focus on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effect, and location economies: there strategic goal is to pursue a low cost strategy on a global scale
  16. Localization strategy
    increasing profitably by customizing the firms good and services so that they provide a good match to taste and preferences in different national markets. (used when there are substantial differences across nations)
  17. Transnational strategy
    are trying to simultaneously achieve low cost through location economies , economies of scale, and learning effect: differentiate their product offering across geographic markets to account for local differences.
  18. international strategy
    taking product first produced for their domestic market and selling them internationally with only minimal local customization.