Term
| Location-specific advantages |
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Definition
| – the benefits a firm reaps from the features specific to a place |
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Term
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Definition
clustering of economic activities in certain locations |
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Term
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Definition
– firms look for countries that possess natural resources and related transport and communication infrastructure |
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Term
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Definition
firms go after countries that have strong demand for their products and services |
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Term
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Definition
firms look for countries with economies of scale and abundant low-cost factors |
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Term
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Definition
| firms target countries and regions with abundant innovative individuals, firms, and universities |
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Term
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Definition
The difference between two cultures along some identifiable dimensions (such as individualism) |
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Term
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Definition
The extent of similarity or dissimilarity between the regulatory,
normative, and cognitive institutions of two countries |
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Term
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Definition
Firms will enter culturally similar countries during their first stage of
internationalization and will then gain more confidence to enter culturally distant
countries in later stages
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Term
| The Strategic Goals Model |
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Definition
It is more important to consider strategic goals (such as market and
efficiency) rather than culture and institutions |
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Term
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Definition
advantages – benefits that accrue to firms that enter the market first and that late entrants do not enjoy
o Proprietary, technological leadership
o Preemption of scarce resources
o Establishing entry barriers for late entrants
o Avoiding clash with dominant firms at home
o Relationship with key stakeholders |
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Term
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Definition
advantages – benefits that accrue to firms that enter the market later and that early entrants do not enjoy
o Opportunity to free ride on first-mover investments
o Resolution of technological and market uncertainty
o First mover’s difficulty to adapt to market changes |
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Term
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Definition
the amount of resources committed to foreign market entry |
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Term
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Definition
nDemonstrate strategic commitment for the long haul
nDeter potential entrants
nLimit strategic flexibility elsewhere
nIncur huge losses if the entries turn out wrong |
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Term
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Definition
nLess costly
nLearning by getting firms’ feet wet
nLimit the downside risk |
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Term
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Definition
A mode of entry (exports and contractual agreements) that tends to
reflect relatively smaller commitments to overseas markets |
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Term
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Definition
| A mode of entry (JVs and wholly owned subsidiaries) that indicate relatively larger, harder-to-reverse commitment |
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Term
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Definition
othe sale of products made by firms in their home country to customers in other countries |
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Term
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Definition
| – A way to reach overseas customers by exporting through domestic-based export intermediaries (middleman |
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Term
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Definition
oan agreement in which the licensor gives his/her proprietary rights to licensee for a royalty fee in return |
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Term
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Definition
| an agreement in which the franchisor allows the franchisee to use its business name and model for a royalty fee |
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Term
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Definition
| a project in which clients pay contractors to design and construct new facilities and train personnel |
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Term
| Build-operate-transfer (BOT) agreement |
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Definition
| non-equity mode of entry used to build a longer term presence by building and then operating a facility for a period of time before transferring operations to a domestic agency or firm. |
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Term
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Definition
| - outsourcing agreements in R&D between firms |
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Term
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Definition
| efforts among a number of firms to jointly market their products and services |
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Term
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Definition
| – a new corporate entity created and jointly owned by two or more parent companies |
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Term
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Definition
| – a subsidiary located in a foreign country that is entirely owned by the parent multinational |
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Term
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Definition
| – Building factories and offices from scratch |
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Term
| Country-of-origin effect – |
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Definition
| the positive or negative perception of firms and products from a certain country |
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