Final for CBA 300

Module 5: Country Risk Assessment

- An assessment of a country's economic situation and politics to determine how much risk to employees, property, and investment exists for the firm doing business there.

Module 1: Globalization

- Economic globalization refers to the tendency toward an international integration and interdependency of goods, technology, information, labor, and capital or the proceed of making this integration happen. - The merits of globalization have been the subject of many heated debates in recent years. - Key concerns with the globalization of business include (1) globalization has produced uneven results across nations and people; (2) globalization has had deleterious effects on labor and labor standards: (3) globalization has contributed to a decline in environment and health conditions; and (4) globalization threatens to reduce national sovereignty. - Key arguments in support of the globalization of business include (1) free trade enhances socioeconomic development and (2) free trade promote more and better jobs.

Module 3: Hall's Framework

- HIGH: much of communication is conveyed by context, not written, or formalized. Japan, China, many other Asian, Latin American African cultures. Social ties are long-standing and close; communication tends to be implicit and indirect. Tends to be polychronic. - LOW: Most communication carried in words, formalized, and written. U.S., Canada, other Anglo cultures, Germany, and Scandinavian cultures. Social ties are of shorter duration; communication is explicit. Tends to be monochronic. - EXAMPLES OF HIGH-AND-LOW-CONTEXT OCCUPATIONS: - Human resources, marketing/sales, management, manufacturing, products, R&D, technical, information systems, engineers, finance

Module 6: International Law

- International Law-set of rules nations have agreed to follow. Mainly from bilateral and multilateral treaties between countries. -Public International Law governs relationships between governments. E.g. governs disputes between two countries over trade subsidiaries. -Private International Law governs relationships between individuals and companies that cross international borders. E.g. A contract between businesses in two different countries.

Module 10: Affiliates

-AFFILIATES are companies controlled by other companies, but less than-majority owners may exercise control by a variety of means, both those involving stock ownership and those involving non-owner ship mechanisms

Module A: Major functions of the main international institutions

-THE UNITED NATIONS (UN) -Main Objective: Maintain international peace and security, protect human rights, promote sustainable development, and uphold international law -193 member states -financed by voluntary contributions from its members -provides a forum for governments to meet and talk to each other HOW DOES THE UN IMPACT INTERNATIONAL BUSINESS? -The UN is responsible for international agreements that affect commercial relationships, including international law. Examples: -ships are protected by rules legitimized by the UN when traveling through international straits -commercial airlines have the right to fly across borders and land in case of emergency due to international agreements negotiated by UN agencies. -who sets criteria for pharmaceutical quality and standardizes drug names. -UN has set conventions for international commercial transactions to establish rights and obligations for buyers and sellers. CRITICISM OF THE UN -ineffective role in world affairs -independence questioned -highly bureaucratic and corrupt -INTERNATIONAL MONETARY INSTITUTIONS -International Monetary Fund -Main Objectives: establish rules for international monetary policies and enforcement, promote global monetary cooperation, financial stability, facilitate international trade, reduce poverty, and promote sustainable economic development. -funding through quota system -global lender of last resort - The World Bank-Main Objectives: provide loans to governments of developing nations to support development-purpose evolved to include environmental groups and NGOs-US, Japan, China, and Germany have highest voting power-works together with the IMF CRITICISM OF THE WORLD BANK - In the 1980s, both institutions were used to force free-market policies on poor countries that needed financial loans - IMF loan conditions to countries that need financial aid increase poverty in the short term and undermine social progress -IMF has been accused of helping the economies of dictatorial regimes in markets attractive to both U.S and European multinational firms. -WORLD DEVELOPMENT AND TRADE ORGANIZATIONS -Organizational for Economic Co-Operation and Development (OECD) -established in 1961, helps government stimulate economic progress and world trade, funded by members contributions, 38 members, influential publisher of economic data and annual evaluations and rankings of member countries. - World Trade Organization (WTO)-established in 1995, Aim: eliminate trade barriers to reduce costs for all the stakeholders involved, establishes and helps implement rules of trade between nations. -164 members, representing 98 percent of all world trade. WTO GLOBAL TRADE PRINCIPLES (1) Trade without discrimination (2) Free trade through negotiation (3) Predictability through binding and transparency (4) Promoting fair competition (5) Encouraging development and economic reform. (6) Protecting the environment.

Module 3: Culture Relativism

-one culture has no absolute criteria for judging the activities of another culture; However, every culture can and should apply such judgment to its own activities.

Module 10: Organizational Structure

-organizational design: a process that determines how a company should be organized to ensure its worldwide business activities are integrated in an efficient and effective manner. KEY POINTS ABOUT ORGANIZATION STRUCTURE OF AN INTERNATIONAL COMPANY -changes over time as the company adapts, redesigns, or innovates to meet external pressures, evolving customer needs and demands, etc. -closely aligned with the IC's strategic planning process. -main issues to consider when designing an IC structure: (1) What departments do we need, to take advantage of the efficiencies gained from the specialization of labor? And (2) How to best coordinate efforts among departments to meet the firm's overall objectives?

Module 5: Privatization

-privatization: the selling of government owned property to the private sector to gain more efficiency in business operations, to raise money or to change in political climate/philosophy.

Module 1: External forces

1. Competitive: kinds and numbers of competitors, their locations, and their activities. 2. Distributive: national and international agencies that distribute goods and services. 3. Economic: variables such as gross national income gni, unit labor cost, and personal consumption expenditure that influence a firm's ability to do business. 4. Socioeconomic: characteristics and distributions of the human population 5. financial: financial variables such as interest rates, inflation rates, and taxation 6. legal: the many foreign and domestic laws governing how international firms must operate. 7. physical: elements of nature such as topography, climate, and natural resources 8. political: elements of nations' political climates such as nationalism, forms of government, and international organizations 9. sociocultural: elements of culture (such as attitudes, beliefs, and opinions) 10. labor: composition, skills, and attitudes of workers 11. technological: the technical skills and equipment that effect how resources are converted to products

Module 6: Types of Legal Systems

CIVIL LAW OR CODE LAW-derived from ancient Roman law and influenced by religious law. -based on codification: Systematic collection of laws designed to cover all areas of concern. -the most widespread system globally. -Europe, Russia, Central and South America, Japan, South Korea. COMMON LAW -relies on previous court decisions and interprets statutes and regulations. -relationship between judicial decisions and statutes can be complex due to precedents. -more adversarial, but more flexible, than civil law systems .-Australia, Canada, Ireland, New Zealand, U.K., an U.S. RELIGIOUS LAW -religious document or source is the basis of the legal system. -divinely ordained -Hindu, Jewish, and Islamic Law (most widespread)-most Muslim countries maintain a dual system -large part of the Middle East, Afghanistan, Mauritania, Pakistan, Sudan

Module A: Main differences between the various economic integration agreements and examples

ECONOMIC INTEGRATION AGREEMENTS -FREE TRADE AREA: tariffs abolished among members. E.g. USMCA -CUSTOMS UNION: Free trade agreement plus a common eternal tariff. E.g. SACU (Southern African Customs Union) -COMMON MARKET: a customs union plus mobility of services, people, and capital. E.g. Mercosur/ Mercosul -Complete Integration: A common market plus a common currency, and additional political and economic integration.

Module 10: Global Division

FROM AN INTERNATIONAL DIVISION TO A GLOBAL PRODUCT DIVISION -better able to develop competitive strategies to deal with increasing global competition-reduce production costs by promoting product standardization and/or manufacturing rationalization -efficient allocation of resources across the board and promote technology transfer among global offices.

Module 9: Global Strategic Planning

TO ACHIEVE SUSTAINABLE COMPETITIVE ADVANTAGE......companies must develop competencies that; 1.Create Value for which customers are willing to pay. 2. Are Rare. 3. Are difficult to Imitate or substitute for. 4. Allow the firm to be Organized to fully exploit the competitive potential of these competencies. *also called the VRIO framework THE IMPORTANCE OF PLANNING GLOBALLY -STRATEGIC PLANNING is the process by which an organization determines where it is going in the future, how it will get there, and how it will assess whether and to what extent it has achieved its goals. -Provides a way to identify opportunities and threats. -Gives decision makers a common understanding of business, strategy, assumptions, and direction. STEP 1: ANALYZE DOMESTIC, INTERNATIONAL, AND FOREIGN ENVIRONMENTS -managers must be aware of the present and future expectations in the trends of the uncontrollable forces, to develop and implement appropriate responses to any changes in key environmental forces. -environmental, social, and business trends are more critical to strategy than in the past, but few act on it. -Key tool: SWOT analysis STEP 2: ANALYZE CORPORATE CONTROLLABLE FORCES -value chain is the set of interlinked activities that add value to the final product or service. -value chain analysis assesses where, and to what extent value is added to the final product or service. i)who are the company's target customers? (ii) What value does the company want to deliver to these customers? (iii) How will this customer value be created? STEP 3: DEFINE THE CORPORATE MISSION, VISION, AND VALUES STATEMENTS -mission statement defines the organization's purpose and scope.-vision statement describes the desired future position if organization can acquire the necessary competencies and successfully implement its strategy. -values statement is a clear, concise description of the fundamental values, beliefs, and priorities expected of the organization's members. STEP 4: SET CORPORATE OBJECTIVES -objectives direct the firm's course of action, maintain it within the boundaries of the stated mission, and ensure its continuing existence. -Intel: (1) defend and extend the core PC and server businesses; (2) expand into profitable, related adjacencies; (3) selectively disrupt markets and adapt Intel formula, and (4) continue to develop Go Big opportunities. STEP 5: QUANTIFY THE OBJECTIVES-while quantifying objectives is preferred, companies frequently do not have these. -organizations often have non-quantifiable or directional goals. -objectives tend to become more quantifiable as they get to the operational level. STEP 6: FORMULATE THE COMPETITVE STRATEGIES-competitive strategies are action that help organizations reach their objectives. -When developing and assessing strategic alternatives, companies competing internationally face two opposing goals: 1.To reduce costs: e.g. How to lower per-unit costs to be competitive in international markets? 2. To adopt to local markets. E.g. Does the product need to be modified to meet local demands, cultural preferences, etc. ? HOME REPLICATION STRATEGY centralizes product development functions in home country. -MULTIDOMESTIC STRATEGY effective when pressure to adopt products or services for local markets is strong .-GLOBAL STRATEGY works when a company faces strong pressures for cost reduction and limited pressure to adopt to local markets. -TRANSACTIONAL STRATEGY effective when pressures for both cost reduction and local adaptation. STEP 7: PREPARE TACTICAL PLANS -also called operational plans. -Strategic plan are using abroad, therefore companies need tactical plans to spell out in detail how the objectives will be reached. -They are vary specific and quantify what needs to be done. -E.g. Our subsidiary in Puerto Rico is adding one new machinery to the manufacturing plant next month and needs to hire two additional employees to help run the new machine.

Module 3: Ethnocentrism

The belief that your own culture is superior to other cultures. - type of resistance

Module 11: What distinguishes the leader from the manager?

The leader innovates. The manager administrates. The leader develops. The manager maintains. The leader challenges the status quo. The manager accepts it. The leader has a long-range perspective. The manager has a short-term perspective. The leader asks "what?" and "why?". The manager asks "how?" and "when?". The leader originates. The manager imitates. The leader inspires. The manager controls.

Module 4: Stakeholder Model

developed by Edward Freeman, calls for managers to identify/consider the network of tensions caused by the competing internal/external demands within which the business exists -forces a business to address underlying values/principles -company must see itself in relationship to its stakeholders and in a societal context

Module 3: Culture

- The sum total of the beliefs, rules, techniques, institutions, and artifacts that characterize human populations. - Culture is learned; we are not born with a culture. -The various aspects of culture are interrelated. - Culture is shared, patterned, and mutually constructed through social interaction. - Culture defines the boundaries of different groups. - Culture manifests in a society's aesthetics, religion, material culture, language, and social organization.

Module 1: Uncontrollable Forces

- are external forces management has no direct control over, although it can exert influence-such as lobbying for a change in a law or heavily promoting a new product that requires a change in a cultural attitude -competitive, distributive, economic, socioeconomic, financial, legal, physical, political, sociocultural, labor, and technological -domestic environment: uncontrollable forces originating in the home country that surround and influence the life and development of the firm -foreign environment: refers to all the uncontrollable forces originating outside the home country that surround and influence the firm -International Environment: interactions between the domestic environmental forces and the foreign environmental forces, as well as interactions between the foreign environmental forces of two countries, such as when an affiliate in one country does business with customers in another.

Module 8: Balance of Payments

-BOP records a country's transactions with the rest of the world. -Current Account: Records the inflow and. Outflow (imports/exports) of goods and service into a country -Capital Account: Records all international capital transfers (direct investment, portfolio management, and short-term capital flows) -Official Reserves Account (or financial Account): Records all international monetary flows related to gold (imports and exports), FX held by the government, and liabilities to foreign central banks THE SIGNIFICANCE OF THE BALANCE OF PAYMENTS -IB managers are interested in the BOP because: -It reveals demand for a country's currency -The trend in the BOP is used to predict the type of changes that might develop in a country, and how that might affect IB's decisions/ strategy in that country. -Trade deficit= currency depreciates -trade surplus= currency appreciates

Module 7: Private Consumption

-Disposable Income: after-tax personal income. -Discretionary income: amount of income left after paying taxes and making essential purchases. -Personal Consumption -ownership of goods -consumption of key materials

Module 3: Hofstede Framework

-POLYCHRONIC VS. MONOCHRONIC-time-perception concept, monochronic culture runs the Western World, activities are structured and scheduled in a linear fashion, based on clarity of purpose, and efficiency of execution, punctuality is important. POLYCHRONIC cultures tend to be more fluid and less structured. Relationships, alternatives, opportunities and mood take precedence. Multi tasking is both natural and stimulating. Punctuality is not the most important. Runs in many parts of Asia, Africa, and Latin America. - INDIVIDUALISM VS COLLECTIVISM/ INDIVIDUALISM (IDV)- COLLECTIVISM (COL) dimension measures degree to which people in the culture are integrated into groups.-People in high collectivistic cultures belong to strong, cohesive in-groups that look after them in exchange for loyalty. -People in high individualistic cultures are more loosely connected and look after themselves and their immediate family - POWER DISTANCE; Power Distance (PDI) is extent to which members of a society expect power to be distributed unequally and accept it. -Suggests that a society's level of inequality is endorsed by followers as well as by leaders. -In large-power-distance societies, seniority, age, rank, and title are important; formality is emphasized. -In small-power-distance environments, a consultative style of leadership predominates; informality tends to be the norm. - UNCERTAINTY AVOIDANCE-Uncertainty avoidance (UAI) describes a society's level of comfort with uncertainty. -Strong uncertainty avoidance cultures resist change; they expect clear procedures and preserve the status quo. Weak uncertainty avoidance culture see conflict as having positive aspects; they expect innovation, encourage risk taking and reward change. - MASCULINITY VS. FEMININITY-Masculinity (MAS)-Femininity dimension describes the distribution of roles between the sexes. -Women's roles across cultures vary less than men's; men's values vary widely. Dimension addresses the gap between men's and women's roles in a culture. -In feminine cultures, quality of work life is important; in masculine cultures, economic growth is central and business performance is primary goal. - INDULGENCE VS. RESTRAINT-Indulgence versus Restraint describes a culture's tendency either to allow relatively free gratification of human desires or suppress human drives through strict social norms. -In indulgent cultures, people believe they have personal control over their lives. In restraining cultures, much more energy is dedicated to establishing order and structure, and individuals are "indulged". - LONG TERM ORIENTAION VS. SHORT TERM ORIENTATION-Pragmatic (LTO: Long-Term Orientation) versus Normative (STO: Short-Term Orientation) dimension is measure of how people deal with the unexplainable in their lives. -In STO societies, there is strong desire to explain and to know the absolute truth. Respect for tradition, a low propensity to save, and a focus on quick results. A LTO orientation suggests people not concerned with understanding so much because life as a complex process is a given. Tend to save for the future.

Module 10: International Division

-international division is at the same time level as the domestic division -one single division responsible for all international operations -difficult to manage and coordinate as volume of sales and product diversity increases

Module 6: Rule of Law

-refers to a legal system in which rules are clear, respected, fairly enforced, and followed by a individuals, organizations, and the government. -effective rule of law reduces corruption, fights poverty, and protects people from injustices large and small. It is the foundation for communities of justice, underpinning development, accountable government, and respect for fundamental rights. -countries based on the rule of law encourage foreign investment.

Module 10: Subsidiaries

-subsidiaries are companies controlled by the other companies (known as parent companies) through ownership of enough voting stock to elect a majority of the voting members on the company's board of directors. -Wholly owned subsidiaries: Parent company has 100% ownership.

Module 10: Decision making in Subsidiaries and Affiliates

DEPENDS ON 5 FACTORS -the degree of standardization of the company's products and equipment; -the competence of subsidiary management, and HQs reliance on it; -the size and age of IB and how long it has conducted global operations -HQ's commitment the subsidiary -the subsidiary's relationship and demand for power -In most cases, some decisions are made by the HQs, other decisions are made at the subsidiary level, and some other decisions are made cooperatively.

Module 8: Floating Exchange Rate Systems

-From 1973 the major currencies were floating in the FX markets (The rules for the floating system were established by the IMF in 1976). -largely unregulated FX markets. -exchange value is determined by supply and demand; currency values float against each other. -at times, centra banks intervene in the market to buy or sell large amounts of currency. WHAT IS THE RELATIONSHIP BETWEEN FOREIGN CRRENCY EXCHANGE AND IB? -IB needs FX (foreign exchange) rates to settle international transactions.

Module 5: Government Intervention in Trade

-Provide for National Defense -certain industries need protection from imports because they are vital to security. -economists say this is a weak argument and used to gain emotional advantage. -Impose Sanctions -inflict economic damage, punish, or encourage change of behavior. -seldom achieve their goal. - Produce collateral economic damage. -Protect an infant or Dying Industry -give infant industries a change to grow and build comparative advantage. -Without this, lower-cost imports will underprice in local market. -Slow down impact of dying industry—move capital into other sectors. -Protect Domestic Jobs -"Cheap foreign labor" argument does not hold up—wages don't account for all production costs. -Argument has strong emotional appeal. -Ensure Fair Competition -Import duty to bring cost of imports up to cost of domestic goods. -Don't ban imports but equalize them. - Consumer impact: import duty increases the price they pay. -Retaliate: -Dumping: Selling a product abroad for less than the cost of production, less than the price in the home market, or less than then price to third party countries; -Subsidies: Financial contributions, provided directly or indirectly by a government, that confer a benefit, including grants, preferential tax treatment, and government assumption of normal business expenses. -Tariff Barriers: -Tariffs: Taxes on imported goods for the purpose of raising their price to reduce c competition for local producers or stimulate local production. E.g. ad valorem duty, specific duty, etc.

Module 2: Theory of Comparative Advantage

-Ricardo examined the question: What happens when one country can produce all products at an absolute advantage? -The theory suggests that global efficiency gains can still occur from trade if a country specializes in what it can produce most efficiently. -When one nation is less efficient than another nation in the production of goods, the less efficient nation has a comparative advantage in the production of that good for which its absolute advantage is less (lower opportunity cost than its trading partners). -Opportunity cost is the cost of pursuing one activity at the expense of another activity.

Module 5: Government Stability and Protection

-Stable Government: maintains itself in power. Fiscal, monetary, and political policies are predictable and not subject to sudden, radical changes. Protection from Unfair Competition. Protection from Terrorism, Cybercrime, and Other Threats. - Unstable Government: cannot maintain itself in power and/ or. Makes sudden, unpredictable, or radical policy changes. High country risk.

Module 6: IP Rights

-a creative work or invention that is protectable by patents, trademarks, trade names, copyrights, and trade secrets depending on the jurisdiction. -treaties, agreements, and conventions helped standardize some aspect of IP rights. -the international framework for IP protection is overseen by the World Intellectual Property Organization (WIPO) and the Trade Related Aspects of IP Rights (TRIPS). PATENTS: a government grant giving the inventor of a product or process the exclusive right to manufacture, exploit, use, and sell that invention or process.-country-specific laws vary widely-patent trolls and pirates challenge the patent system. TRADEMARKS: -a shape, color, design, phrase, abbreviation, or sound used by merchants or manufacturers to designate and differentiate their products.-Vary from country to country.-madrid agreement of 1891 administered by WIPO. TRADE NAMES:-a name used by a merchant or manufacturer to designate and differentiate its products. -protected by a WIPO and TRIPS.-Taco Bell and Pizza Hut are trade names for Yum! Brands, Inc. COPYRIGHTS:-exclusive legal rights of authors, composers, creators of software, playwrights, artists, and publishers to publish and dispose of their work.-protects tangible property. TRADE SECRETS:-any information that a business wants to hold confidential.-includes formulas, processes, patterns, designs.-most common type of IP protection.

Module 7: Income Distribution

-a measure of how a nation's income is apportioned. (=distributed) among its people. -GINI Index: a measure of the degree to which family income within a country is distributed equally. -wide range around the world. -usually if more evenly distributed in richer nations -income redistribution is slow -income inequality increases in early stages of development and becomes more equal in later stages

Module 11: Global Mindset

-a set of ideas and attitudes that combines an openness to and an awareness of diversity across markets and cultures with a propensity and ability to synthesize across this diversity. TWO KEY COMPONENTS 1.INTELLECTUAL INTELLIGENCE (IQ) 2. GLOBAL EMOTIONAL INTELLIGENCE (EQ)

Module 4: Frameworks for Sustainability

-environmental sustainability: (1) maintaining the environment, society, the economy, people, organizations; (2) state in which the demands placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations-sustainability is a systems concept, local and global at the same time. - Life Cycle Assessment: approach used to evaluate the environmental impact aspects of a product of service throughout its life cycle -concerned about impact of product on environment -looks at life cycle of product, can see whole chain of its production -LCA includes CO2 emissions, ozone depletion, water use/release, toxic release, resource depletion -helps understand the CUMULATIVE IMPACT of the product -Cradle-to-cradle design (C2C): suggests that products/services should be designed to completely close the production loop, so that all resources needed to produce them are recycled/reused rather than discarded and left to pollute -model mimic's natures/cycles all materials and generates no waste -identifies 2 types of components: 1)technological nutrients (inorganic, synthetic and can be reused) 2)biological nutrients= organic and can be decomposed

Module 7: Measuring the Size of an Economy

-gross domestic product: the total monetary value of all goods and services produced within a nation. -gross national income (GNI)- the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad. -GNI measures total value of all income. -GNI per capita indicates how advanced an economy is,...but should be used with caution.... -how do we compare purchasing power across different nations? - purchase power parity: compares how goods in diff countries are priced. Means of adjusting exchange rates for 2 currencies so the currencies have equivalent purchasing power.

Module 5: Nationalization

-nationalizing: the taking of private property by a government to make it public. -Motivated by the belief that government can manage a public good or necessity better than the private, profit- driven sector.

Module 2: Foreign Direct Investment

-purchase of sufficient stock in a firm to obtain significant management control. - EXPLAINING FDI: THEORIES OF INTERNATIONAL INVESTMENT 1.MONOPOLISTIC ADVANTAGE THEORY -FDI is made by firms in industries with relatively few competitors, due to their possession of technical and other advantages over indigenous firms. -Smartphones (Apple, Samsung), magnetic resonance imaging machines (General Electic, Philips), and commercial aircraft manufacturing (Boeing, Airbus) 2.STRATEGIC BEHAVIOR THEORY-suggests that FDI occurs within oligopolistic industries (industry with a limited number of competing firms) because strategic rivalry results in firms closely following and imitating each other's international investments to keep a competitor from gaining an advantage. 3.INTERNALIZATION THEORY-to obtain a higher return on investment (ROI), a firm will transfer its superior knowledge to a foreign subsidiary that it controls, rather than sell it in the open market. 4. DYNAMIC CAPABILITIES THEORY-for a firm to successfully invest overseas, it must have not only ownership of unique knowledge or resources, but also the ability to dynamically create, sustain, and exploit these capabilities over time. 5. ECLECTIC THOERY OF INTERNATIONAL PRODUCTION-suggests that THREE ADVANTAGES are needed for a firm to invest in facilities overseas: -Ownership: the firm can lower costs or generate higher revenues to offset other costs; -Location: market provides opportunities to increase profits by producing locally, rather than exporting to it;. -Internalization: best option to retain ownership and control.

Module 2: Theory of Overlapping Demand

-theory suggests that nations with similar levels of per capita income have similar preferences and demand for products and services; trade is sarked by product differentiation (with the intent to positively influence demand.

Module 2: Porter's Diamond Model

-why have countries developed and sustained different competitive advantages? -Porter's theory suggests four variables that are important for competitive advantage: (1)Demand conditions (2) Factor conditions (3) Related and supporting industries (4) Firm strategy, structure, and rivalry.