What are some traditional reasons the firms internationalize?

• Competitors going global
• Trade barriers
• Regulations and restrictions (operating enviroments)
• Customer demands
• Secure key supplies
• Saturated home market
• Market-seeking
• Economies of scale and scope
• Low-cost factors of production
• Incentives (tax advant.)
• Diversity risk
• Exploit an advantage of being foreign
• Prestige
• Proximity (avoid shipping costs)

What are some emerging reasons the firms internationalize?

• Technological developments in production
• Escalating R&D costs
• Shortening product life cycles
• Scanning and learning capabilities
• Competitive positioning

According to Gupta and Govindarajan, what two dimensions determine the strategic importance of a market?

1) Learning potential-Presence of sophisticated and demanding customers for the product/service. The pace at which relevant technologies are evolving there

2) Market potential-Current market size and growth expectations

According to Gupta and Govindarajan, what are the 4 strategies for winning against global competitors?

1. Aquiring a dominant local competitor
2. Acquiring a weak player
3. Enter a poorly defended niche
4. Frontal Attack

When is an accelerated speed for global expansion appropriate? (Gupta and Govindarajan)

• It is easy for competitors to replicate your recipe for success
• Scale economies are extremely important
• Mgt.'s capacity to manage global operations is high

What are some of the myths and misunderstandings of global strategies as discussed by Kanter and Dretler?

• Global is syn. w/intl. meaning simply having a presence in other countries whether or not there is any connection amoung activies across countries
• The global stategy means doing everything the same everywhere
• Globalizing means becoming a stateless corporation w/no national or community ties
• Globalization requires abandoning country images and values
• Globalization means tacking on acquisitions or allowances in other countries, w/o much integration or change
• That to qualify as global, a strategy must involve sales or operations in another country

What are some advatages to exporting strategies?

• low cost
• economies of scale
• low risk

What are some advatages to licensing strategies?

• low cost and risks
• quick access to foreign markets
• royalties

What are some advatages to joint venture strategies?

• cost sharing
• risk sharing
• knowledge sharing
• discourage mistrust of foreigners

What are some advatages to greenfield strategies?

• pick the site that maximizes location economies
• build new and modern facilities
• no prior history or labor troubles

What are some advatages to acquisition strategies?

• Ideal when the aquired firm has competitive advantage
• Quick

What are some disadvatages to exporting strategies?

• shipping costs
• setting and distribution system
• buying foreign advertising
• far away from customers (hard for communication)
• trade barriers and import regulations

What are some disadvatages to licensing strategies?

• Difficult to control the licensee (counterfieting)
• Educating a potential competitor
• Low income
• May move the opportunity to enter the country through other means because the licensee has exclusive rights to trademark technologies in their countries

What are some disadvatages to joint venture strategies?

• Time, complex negotiations required
• Lack of decision-making autonomy and control
• Cultural/managerial conflict
• Knowledge sharing (loss of technology)

What are some disadvatages to greenfield strategies?

• Timely
• Expensive
• Extensive recruitment and training

What are some disadvatages to acquisitions strategies?

• Complicated negotiations and financial transactions
• Legal/political hurdles
• Buying the problems of the acquired firm

What is guanxi?

Means relationship or connection in Chiense.

How can a company manage its quanxi?

-organizational quanxi is based on individual quanxi

-strengthed by multiple personal quanxi among the staff

-quanxi aduits