MGMT 449 - MIDTERM - CH 7

Card Set Information

Author:
acelaker
ID:
297625
Filename:
MGMT 449 - MIDTERM - CH 7
Updated:
2015-03-05 01:33:55
Tags:
MGMT 449 MIDTERM
Folders:

Description:
MGMT 449 - MIDTERM - CH 7
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user acelaker on FreezingBlue Flashcards. What would you like to do?


  1. Why do companies enter foreign markets
    To gain access to new customers

    • To achieve lower costs and
    • economies of scale

    To exploit core competencies

    • To spread business risk across a
    • wider market base

    To access resources and capabilities in foreign mark
  2. WHY COMPETING ACROSS NATIONAL BORDERS MAKES STRATEGY MAKING MORE COMPLEX
    1. Industry competitiveness factors that vary from country to country

    2. Location-based advantages for certain countries

    3. Differences in government policies and economic conditions

    4. Currency exchange rate risks

    5. Differences in cultural, demographic, and market conditions
  3. ♦Multidomestic Competition
    • ●Exists when competition in each country market is localized and not closely connected
    • to competition in other country markets.
  4. ♦Global Competition
    • Exists when competitive conditions and prices are strongly linked across many
    • different national markets
  5. STRATEGIC OPTIONS FOR ENTERING
    AND COMPETING IN INTERNATIONAL MARKETS
    • ♦Maintain a national (one-country)
    • production base and export goods to foreign markets.

    • ♦License foreign firms to produce
    • and distribute the firm’s products abroad.

    • ♦Employ an overseas franchising
    • strategy.

    • ♦Establish a wholly-owned
    • subsidiary by either acquiring a foreign company or through a “greenfield”
    • venture.

    • ♦Form strategic alliances or joint
    • ventures with foreign companies.
  6. COMPETING INTERNATIONALLY:
    THE THREE MAIN STRATEGIC APPROACHES
    Multidomestic Strategy

    Global Strategy

    Transnational Strategy
  7. ♦Profit Sanctuaries
    • Are country markets (or geographic regions) in which a firm derives substantial
    • profits because of its protected market position or its competitive advantage.
  8. ♦Cross-Market Subsidization
    • Is the diversion of resources and profits from one market to support competitive
    • offensives in another different market
  9. ♦Dumping
    • Selling goods in foreign markets at prices that are either below normal home market
    • prices or below the full costs per unit

    ♦Why A Firm Engages in Dumping:

    ●To reduce or avoid the high fixed costs of idle production capacity.

    • ●To use below-cost pricing to gain market share and drive weak firms from the
    • market.
  10. companies opt to expand into foreign markets for such reasons as to
    gain access to new customers, achieve lower costs and enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.
  11. One of the biggest strategy issues confronting a company competing in the international arena is
    whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to match the preferences and requirements of local buyers.
  12. The essential difference between multidomestic competition and global competition is that
    n multidomestic competition the markets of different countries are not closely linked and rivals battle for "national market championships" whereas in global competition the markets of different countries are closely linked and form a world market, thus pitting rivals in a battle for the "world market championship."
  13. Profit sanctuaries
    are country markets in which a company derives substantial profits because of its protected market position or unassailable competitive advantage.
  14. Which of the following is not a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets?
    Develop new sets of core competencies that allow a company to offer value to consumers of emerging markets in ways unmatched by rivals
  15. the strategy options for local companies in competing against global challengers include
    develop business models that exploit the shortcomings of local distribution networks and infrastructure, utilize keen understanding of local customer needs and preferences, and transferring company expertise to cross-border markets.

What would you like to do?

Home > Flashcards > Print Preview