foundations of international business (IB 320F)- chapters: 12 (reread whole chapter/not just highlighted parts) exam 1
low cost strategy, differentiation strategy
(,) when we refer to a strategy that focuses primarily on lowering production costs as a ______ _______ ________ when we refer to a strategy that focuses primarily on increasing the attractiveness of a product as a ___________ __________ (can try to do both)
where do we compete, what unique value do we bring to win, what resources/capabilities/toolbox do we utilize, how do we sustain unique value
****(,) A good strategy provides clear answers to 4 questions: 1. WHERE DO WE ___________? 2. WHAT ________ __________ DO WE BRING TO WIN? 3. WHAT _________S/_________S/__________ DO WE UTILIZE? 4. HOW DO WE __________ ___________ VALUE?
Leveraging Subsidiary Skills
-Recognize that valuable skills can be developed anywhere within the firm's global network (not just at the corporate center) -Use incentive systems to encourage local employees to acquire new skills -Develop a process to identify when new skills have been created -Act as facilitators to transfer valuable skills within the firm
impressions and intuition
-__________S AND ________ about a country can play a key role in the decision to invest -political risk or uncertainty elicits the response of "stop. wait and see."
highly, less
-consumers in _________ developed countries tend to demand a lot of extra performance attributes in their products -consumers in _________ developed nations tend to prefer more basic products (national differences in product and technological standards (including various levels of infrastructure) force firms to customize the marketing mix)
attributes, match, culture, technological
-products can be thought of as a bundle of ________S -products sell well when their attributes ______ consumer needs, -consumer needs vary from country to country depending on: ________, levels of economic development, product and _____________ standards (,)
demands for a good organizational architecture
-the elements of the organizational architecture must be internally consistent -the organizational architecture must fit the strategy -the strategy and architecture must be consistent with each other, and consistent with competitive conditions. -Michael Porter's key maxim: STRUCTURE FOLLOWS STRATEGY
good, variable, poor
-the quality of retailers is ________ in most developed countries but is _________ at best in emerging markets and less developed countries -________ quality channel can impede market entry
the 3 dimensions of organizational structure
1. vertical differentiation-the location of decision making responsibilities within a structure (who is the boss) 2. horizontal differentiation-the formal division of the organizational into subunits (who has the right and obligation to do what) 3. integrating mechanisms- the mechanisms for coordinating subunits (how do we manage it all without going crazy or bankrupt)
global standardization strategy
A _________ _____________ _________ focuses on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies. -the goal is to pursue a low cost strategy on a global scale -makes sense when there are strong pressures for cost reductions and demands for local responsiveness are minimal.
summary of chapter 12
A strategy can be defined as the actions that managers take to attain the goals of the firm. For most firms, the preeminent goal is to maximize shareholder value. Maximizing shareholder value requires firms to focus on increasing their profitability and the growth rate of profits over time. International expansion may enable a firm to earn greater returns by transferring the product offerings derived from its core competencies to markets where indigenous competitors lack those product offerings and competencies. It may pay a firm to base each value creation activity it performs at that location where factor conditions are most conducive to the performance of that activity. We refer to this strategy as focusing on the attainment of location economies. By rapidly building sales volume for a standardized product, international expansion can assist a firm in moving down the experience curve by realizing learning effects and economies of scale. A multinational firm can create additional value by identifying valuable skills created within its foreign subsidiaries and leveraging those skills within its global network of operations. The best strategy for a firm to pursue often depends on a consideration of the pressures for cost reductions and for local responsiveness. Firms pursuing an international strategy transfer the products derived from core competencies to foreign markets, while undertaking some limited local customization. Firms pursuing a localization strategy customize their product offering, marketing strategy, and business strategy to national conditions. Firms pursuing a global standardization strategy focus on reaping the cost reductions that come from experience curve effects and location economies. Many industries are now so competitive that firms must adopt a transnational strategy. This involves a simultaneous focus on reducing costs, transferring skills and products, and boosting local responsiveness. Implementing such a strategy may not be easy. Strategic alliances are cooperative agreements between actual or potential competitors. The advantages of alliances are that they facilitate entry into foreign markets, enable partners to share the fixed costs and risks associated with new products and processes, facilitate the transfer of complementary skills between companies, and help firms establish technical standards. A disadvantage of a strategic alliance is that the firm risks giving away technological know-how and market access to its alliance partner in return for very little. The disadvantages associated with alliances can be reduced if the firm selects partners carefully, paying close attention to the firm's reputation and the structure of the alliance so as to avoid unintended transfers of know-how. Keys to making alliances work seem to be building trust and informal communications networks between partners and taking proactive steps to learn from alliance partners.
expanding globally
EXPANDING ___________ allows firms to increase profitability and rate of growth in ways not available to purely domestic enterprises. They are able to: 1. expand the market for their domestic product offerings by selling those products in international markets. 2. realize location economies by dispersing individual value creation activities to those locations around the globe where they can be performed most efficiently and effectively. 3. realize greater cost economies from experience effects by serving an expanded global market from a central location, thereby reducing the costs of value creation 4. Earn a greater return by leveraging any valuable skills developed in foreign operations and transferring them to other entities within the firm's global network of operations
core competencies to a foreign operation
If a firm was concerned with transferring its ________ ______________S TO A _____________ OPERATION, it might elect to transfer a parent company nationals who have knowledge of that competency to the foreign operation. This would be an example of the ethnocentric staffing strategy.
pharmacueticals
In general, which industry is often subject to a high level of local responsiveness as a result of host government demands?
20%
In the upstream portion of the global supply chain, the multinational company should allocate ________% of its efforts to the vendor category.
limits of global outsourcing
LIMITS OF __________ _____________ -many jobs in the services sector cannot be separated from their place of consumption, such as retailing -other services are consumed locally (doctors, lawyers, accountants) -labor union contracts often restrict
primary packaging
Marcy buys a new cell phone. it comes in a molded plastic package. This is an example of ___________ __________ing
self orientation
Mendenhall and Oddou's dimension known as _______ ____________ is seen as a predictor of success in a foreign posting due to the individual's technical competence and ability to adapt their interests to the new environment.
ethnocentric
Nathan's firm has filled all of its key management positions with parent country nationals. This demonstrates the concept of ______________ staffing.
localization, transnational
Need for coordination is lowest in firms with a ____________ strategy and highest in ______________ firms. (regardless of the type of structure, firms need a mechanism to integrate subunits)-coordination can be complicated by differences in subunit orientation and goals
watch video
Read more about McKinsey's Digital Strategy Framework: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-economic-essentials-of-digital-strategy You will find a nice 6min video there as well that explains the framework and provide examples
minimum efficient scale
The _________ __________ __________ is the smallest amount of production a company can achieve while still taking full advantage of economies of scale with regards to supplies and costs.
strategy, operations, and organization
The _________, ___________, AND ___________ of the firm must all be consistent with each other if it is to attain a competitive advantage and garner superior profitability.
polycentric
The lack of a manager's mobility among national operations in _______________ firms implies that pay can and should be kept country specific. (major drawback to this staffing policy is the separation that might develop between host country managers and parent country managers.
product attributes, place and time, promotion, pricing strategy
The marketing mix for products (4 ps) (,) (distribution strategy/communication strategy) -goal is to achieve the best possible mix to a specific target market in a country or region.
development cost
The strategic alliance between Boeing and some japanese companies to build the boeing 787 aircraft was motivated by boeing's desire to share the ___________ _________ of the new jet.
chapter 16 summary
Theodore Levitt argued that due to the advent of modern communications and transport technologies, consumer tastes and preferences are becoming global, which is creating global markets for standardized consumer products. However, this position is regarded as extreme by many experts, who argue that substantial differences still exist between customers from different countries and cultures. Market segmentation refers to the process of identifying distinct groups of consumers whose needs, wants, and purchasing behavior differs from each other in important ways. Managers in an international business need to be aware of two main issues relating to segmentation: the extent to which there are differences between countries in the structure of market segments and the existence of segments that transcend national borders (i.e., intermarket segments). A product can be viewed as a bundle of attributes. Product attributes often need to be varied from country to country to satisfy different consumer tastes and preferences. Country differences in consumer tastes and preferences are due to differences in culture and economic development. In addition, differences in product and technical standards may require the firm to customize product attributes from country to country. A distribution strategy decision is an attempt to define the optimal channel for delivering a product to the consumer. In the global supply chain, the marketing channel is a part of the downstream (also called outbound) portion of the supply chain (refer to Chapter 17). Significant country differences exist in distribution systems. In some countries, the retail system is concentrated; in others, it is fragmented. In some countries, channel length is short; in others, it is long. Access to distribution channels is difficult to achieve in some countries, and the quality of the channel may be poor, especially in less developed nations. A critical element in the marketing mix is communication strategy, which defines the process the firm will use in communicating the attributes of its product to prospective customers. Barriers to international communication include cultural differences, source effects, and noise levels. A communication strategy is either a push strategy or a pull strategy. A push strategy emphasizes personal selling, and a pull strategy emphasizes mass media advertising. Whether a push strategy or a pull strategy is optimal depends on the type of product, consumer sophistication, channel length, and media availability. A globally standardized advertising campaign, which uses the same marketing message all over the world, has economic advantages, but it fails to account for differences in culture and advertising regulations. Price discrimination exists when consumers in different countries are charged different prices for the same product. Price discrimination can help a firm maximize its profits. For price discrimination to be effective, the national markets must be separate and their price elasticities of demand must differ. Predatory pricing is the use of profit gained in one market to support aggressive pricing in another market to drive competitors out of that market. Multipoint pricing refers to the fact that a firm's pricing strategy in one market may affect rivals' pricing strategies in another market. Aggressive pricing in one market may elicit a competitive response from a rival in another market that is important to the firm. Experience curve pricing is the use of aggressive pricing to build accumulated volume as rapidly as possible to quickly move the firm down the experience curve. International market research involves (a) defining the research objectives, (b) determining the data sources, (c) assessing the costs and benefits of the research, (d) collecting the data, (e) analyzing and interpreting the research, and (f) reporting the research findings. New-product development is a high-risk, potentially high-return activity. To build a competency in Page 467new-product development, an international business must do two things: disperse R&D activities to those countries where new products are being pioneered and integrate R&D with marketing and manufacturing. Achieving tight integration among R&D, marketing, and manufacturing requires the use of cross-functional teams.
information systems
Tri-lar engineerings has electronic systems for managing inventory and tracking sales. Which type of support activity do these systems provide?
pull strategy
______ STRATEGY: emphasizes mass media advertising (think laundry detergent)-relies on access to advertising media
equity joint ventures
______ _______ __________S- number of partners... from 2 to many -ownership-- equal stakes, majority/ minority stakes, stake related to local FDI laws -management might or might not reflect ownership stakes -between developed nations companies- often DEFENSIVE like cost sharing goals -between developed nations' companies and emerging nations' companies- often OFFENSIVE like growth and new market exploration oriented -life span rom a few years to forever.
experience curve pricing
______ ________ ________: pricing low worldwide in an attempt to build global sales volume (while riding the experience curve and killing competitors) as rapidly as possible, even if this means taking large losses initially
price elasticity of demand
______ __________ OF ___________: a measure of the responsiveness of demand to changes in price.
channel quality
______ __________: the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses
push strategy
_______ STRATEGY: emphasizes personal selling (think life insurance) -is more attractive when there is limited access to mass media
trademark licensing
_______ ________ involves a firm granting another firm permission to use its proprietary names, characters, or logos for a specified period of time in exchange for a royalty -these appear on clothing, food, toys, home furnishings, and numerous other goods and services. e.g. coca cola, harley davidson, laura ashley, disney, michael jordan, and your favorite university.
learning effects refers
_______ _________S REFERS to the cost savings that result from increased production levels once efficiencies are in place.
Levitt
_______: "World markets are becoming increasingly similar making it unnecessary to localize the marketing mix" most experts say while there is a trend towards global markets, cultural and economic differences among nations limit any trend toward global consumer tastes and preferences
make or buy decisions
________ OR ________ DECISIONS: are decisions about whether to perform a certain value creation activity in house or outsource it to another firm-are important to a firm's manufacturing strategy
six sigma
________ ________ is a set of techniques and tools for process improvement. (quality improvement method that evolved from the TQM system) (aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a company)
trade barriers
________ ________S and differences in product and technical standards also limit the ability of firms to sell a standardized product to a global market.
global market segments
________ _________ SEGMENTS are more likely to exist in industrial products than in consumer products
source effects
________ _________ occur when the receiver of the message evaluates the message on the basis of status or image of the sender.
international leasing
________ _________ the lessor rents out machinery or equipment to clients abroad, often for several years at a time. (e.g. airlines lease aircraft)
strategic alliances
________ _________S: cooperative agreements between potential or actual competitors--WiThOuT creating a new independent entity (i.e. joint venture)... though many books and people use these as the overall term for all kinds of international business cooperation. the number of international (term) has risen significantly in recent decades
JIT
________ is an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This method requires producers to forecast demand accurately.
licensing in manufacturing
________ING IN ___________ING-selling the right to product/brand/market product for fee, lump sum payment, or both.... advantages: low risk, low cost, high speed to market disadvantages: limited local control, IP risk, diminishes global coordination, creates competitor?
summary of choice issues for management
_________ OF ________ _________S FOR ___________: -financial return potential -initial investment required -protect competitive advantage/tech -speed to start up -strategic location advanates -ability to coordinate global operations -trade barriers -local control/sensitivity -create competitor -level of expertise required -incentives -risk tolerance of management
country of origin effects
_________ OF __________ EFFECTS: the extent to which the place of manufacturing influences product evaluations.
elasticity of demand
_________ OF ____________ is determined by income level and competitive conditions.
three steps to making alliances work
_________ STEPS TO MAKING ________S _______: 1. selecting the right partner (helps the firm achieve its strategic goals and has capabilities the firm lacks and it values, shares the firm's vision for purpose, does not expropriate the firm's technological know-how while giving away little in return) 2. good alliance structure (designed to make it difficult to transfer tech not meant to be transferred, contractual safeguards, involve agreement in advance to swap skills/tech to ensure chance for equitable gain, extract significant credible commitment from partner, divorce clause in place) 3. managing the alliance well (regular communication, dedicated personnel, requires managers from both companies to build interpersonal relationships, should promote learning from each other and promote the diffusion of learned knowledge throughout the org)
noise levels
_________ _________S: refer to the amount of other messages competing for a potential consumer's attention.
predatory pricing
_________ __________ : the profit gained in one market is used to support aggressive pricing designed to drive competitors out in another market.
lean management
_________ __________: An approach that improves the efficiency and effectiveness of operations by eliminating waste and improving quality (one piece flow, takt, zero defects)-quality, lead time, costs
hidden costs
_________ __________S of foreign locations common concerns include: high employee turnover, shoddy workmanship, poor product quality, low productivity
product attributes
_________ ___________S: can be thought of as a bundle of attributes, products sell well when their attributes match consumer needs, consumer needs vary from country to country depending on: culture, levels of economic development, product and technological standards therefore, ability of firms to sell the same product worldwide might be limited
international trade secretariats
_________ ____________ _____________ were established in the 1960s to allow unions to bargain transnationally with MNCs.
retail concentration
_________ _____________ types: concentrated system (a few retailers supply most of the market) and fragmented system (many retailers, no one of which has a major share of the market) -can be changing over time, innovation, technological breakthroughs, laws and customs
contract manufacturing
_________ _____________: low cost/high flexibility, low control over operations
licensing
_________ is an arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. -the licensee pays the licensor a fixed amount upfront and an ongoing royalty (usually 2-5%) on gross sales generated from using the licensed asset -may be exclusive or unexclusive -may be regionally specific
franchisee
_________ operates business under name of franchisor -pays fee, and receives supplies, training and technical support from the franchisor -includes brand name, operation system, advertising, reputation, quality control
concentrated
_________ system- is a type of retail concentration with a few retailers supply most of the market.
fragmented
_________ system- is a type of retail concentration with many retailers, no one of which has a major share of the market (tend to have longer channels)
production, procuring
_________: activities involved in creating a product purchasing/___________: buying of raw material, component parts, and products used in manufacturing the product or service.
risks of global outsourcing
_________S of __________ __________ -lower than expected cost savings -environment factors, such as exchange rate fluctuations, trade barriers, and labor strikes -weak legal environment, which can affect the protection of intellectual property. -risk of creating competitors -inadequate or low skilled workers -erosion of morale and commitment among home country employees due to outsourcing
distribution based alliance
__________ _______ __________: general mills had breakfast cereals but Nestle didn't, Nestle had extensive global distribution but general mill didn't -cereal partners worldwide was formed to allow general mill access to Nestle's marketing and distribution in Europe, latin america, and the far east.
foreign direct investment
__________ _______ ____________ -strategy in which the firm establishes a physical presence abroad by acquiring productive assets such as capital, technology, labor, land, plant, and equipment -ownership of foreign facilities -enables greater control/coordination ((equity) joint venture, greenfield, acquisition) -most advanced, expensive, complex, riskiest entry strategy -involves the establishment of manufacturing plants, marketing subsidiaries, or other facilities abroad, most inflexible of modes of entry
technology based alliance
__________ ________ ___________: is based on the exploitation of complementary technology and a need to reduce time to market, peugeot allied with Ford to develop diesel engines
supply chain management
__________ _________ ____________: the oversight of materials, info, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
multipoint pricing
__________ __________: a firm's pricing strategy in one market may have an impact on a rival's pricing strategy in another market-> aggressive pricing in one market can prompt a competitive response from a rival in another market
channel length
__________ __________: the number of intermediaries between the producer and the consumer(longer=more intermediaries involved)
cultural barriers
__________ __________S can make it difficult to communicate messages across cultures. (one potential barrier to effective comm in foreign lands)
organizational structure
__________ ___________ includes: -the formal division of the organization into subunits (such as product divisions, national operations, and functions) -The location of decision making responsibilities within that structure. -The establishment of integrating mechanisms to coordinate the activities of subunits including cross functional teams and or pan-regional committees
profit growth
__________ ___________ is measured by the percentage increase in net profits over time. (higher profitability/higher rate of profit growth will increase the value of an enterprise)
henry mintzberg
__________ ___________ would want us to realize the important differences between an intended strategy, an emergent strategy, and a realized strategy. (more about what you ACTUALLY do rather than what you INTEND to do)-real strategy emerges as you do it) -other experts also believe staging and timing is important as well as orchestration.
kaizen
__________ japanese approach to improving productivity (means continuous improvement)
pressures for cost reductions
__________S FOR _________ ___________S are greatest: -in industries producing commodity type products that fill universal needs: needs that exist when the tastes and preferences of consumers in different nations are similar if not identical -when major competitors are based in low cost locations -where there is persistent excess capacity -where consumers are powerful and face low switching costs -to respond to these pressures, firms need to lower the costs of value creation.
advantages of exporting
__________S OF EXPORTING: least complex, enables incremental growth, experience curve and economies of scale
disadvantages of strategic alliances
__________S OF __________ __________S: can give competitors low cost routes to new technology and markets, unless a firm is careful, it can give away more in a strategic alliance than it receives, control/monitoring costs and complexity, ending a strategic alliance on good terms is sometimes difficult
Advantages of Strategic Alliances
__________S OF __________ __________S: facilitate entry into a foreign market, allow firms to share the fixed costs and risks of developing new products and processes, bring together complementary skills that neither partner could easily develop on its own, can help establish technological standards for the industry that will benefit the firm.
production based alliances
___________ ________ __________S: when firms seek efficiency through component linkages (starbucks/pepsi do this to produce bottled frappuccino)
market segmentation
___________ __________ : identify distinct groups of consumer whose purchasing behavior differs from others in important ways. (adjust the marketing mix from segment to segment)
universal needs
___________ __________S exist when the tastes and preferences of consumers in different nations or regions are similar, if not identical.
turnkey contracting
___________ ___________: arrangement where a firm plans, finances, organizes, manages, and implements all phases of a project abroad and hands it over to a foreign country after training local personnel. Typical in the construction and engineering services industries. (ex include extensions and upgrades to metro systems/bridges/roadways/railways/airports/oil refineries/hospitals)
cultural myopia
___________ ____________ is the lack of interest in learning about other cultures or to recognizing what works in other cultures.
standardized
___________ advertising makes sense when: it has significant economic advantages, creative talent is scarce (1 large effort to develop a campaign will be more successful than many smaller efforts), brand names are global
advantages of acquisition or greenfield FDI
___________S OF __________ OR ___________ FDI: -strategic coordination/location economies -local control -protect technology/competitive advantage
disadvantages of exporting
____________S of exporting: potential political/legal barriers, costs (transportation/tariffs), limited local control, FX transactional risk
learning effects
_____________ ____________S: cost savings from learning by doing (labor productivity increases when individual/systems learn the most efficient ways to perform particular tasks and management learns how to manage the new operation more efficiently.)
profitability
_____________ can be measured in a number of ways, we shall define it as the rate of return that the firm makes on its invested capital, which is calculated by dividing the net profits of the firm by total invested capital.
advantages of wholly owned subsidiaries
_____________S OF ______ ________ ____________S: -reduce the risk of losing control over core competencies allow for the tight control over operations in different countries that is necessary for engaging in global strategic coordination -may be required if a firm is trying to realize location and experience curve economies
management development
______________ ______________ is the process by which managers learn and improve their management skills.
disadvantages of wholly owned subsidiaries
______________S OF ______ ________ ____________S: -firms bear the full costs and risks of setting up overseas operations
disadvantages of acquisition or greenfield FDI
________________S OF __________ OR ___________ FDI: -highest cost/risk -requires greater expertise/knowledge -slower development -flexibility loss
wholly owned subsidiary
a _________ _________ __________ is ideal if.... -when control of brand, products, process or technology is key to competitive advantage -in strategic countries/large markets -there are significant government investment incentives
localization strategy
a __________ __________ focuses on increasing profitability by customizing the firm's goods or services so that they provide a good match to tastes and preferences in different national markets. -makes sense when there are substantial differences across nations with regard to consumer tastes and preferences and where cost pressures are not too intense.
transnational strategy
a __________ ___________ tries the simultaneously: -achieve low costs through location economies, economies of scale, and learning effects -differentiate the product offering across geographic markets to account for local differences -foster a multidirectional flow of skills between different subsidiaries -makes sense when there are both high cost pressures and high pressures for local responsiveness.
hardshiop
a ____________ allowance is typically provided to an expatriate who is sent to a location that is deemed difficult because of a lack of basic services or amenities.
reduction in work in progress
a benefit of flexible machine cells is a __________ IN _______ IN ____________.
purchasing
a business uses the ___________ function to obtain raw materials it needs to manufacture goods
insourcing
a company that decides to stop outsourcing products or services and instead starts to produce them internally is __________.
level V
a company that engages in global purchasing activities that are integrated across worldwide locations and functional groups is at which level of global purchasing?
server
a factory established to overcome tangible and intangible barriers in the global market place which supplies specific country or regional markets around the world is a __________ factory.
mass advertising
a firm may try to pull its product through the channels by using _________ __________ to create consumer demand.
value creation
a firm's _________ __________ is measured by the difference between v and c (v-c); a company creates value by converting inputs that cost C into a product on which consumers place a value of V. -companies can do this by lowering production costs (C) or by making the product more attractive through superior design, styling, functionality, features, reliability, after sales service, etc, so that consumers place a greater value on it and are willing to pay a higher price.
strategy
a firm's __________ can be defined as the actions that managers take to attain the goals of the firm. (most firms have goal of maximize the value of the firm for its owners/shareholders)-subject to the constraint that it is done in a legal, ethical, and socially responsible manner
orchestration and vision
a general who uses strategy uses __________ AND ________ to think about the whole and achieve the goal (business is sometimes seen as modern day war)
minimize
a server factory can __________ the costs that would be necessary if the production facility were further away from its customers.
more significant
a source factors has a __________ ___________ strategic role than an offshore factory
inability of spouse to adjust, manager's personal or emotional maturity, inability to cope with larger overseas responsibilities
according to research done by RL Tung, 3 common reasons US multinationals experience expatriate failure include: (,)
commitment and trust
according to the text, the two keys to interorganizational relationships are: __________ AND ___________
franchising
advantages and disadvantages of ___________ advantages: low risk, fairly high speed to market, improved control over licensing, some global coordination, can construct win/win agreements disadvantages: dependence on partner, long term commitment, higher start up costs and maintenance expense, complexity/coordination costs high if franchisees only small and disbursed across countries
is it desirable to be the 1st mover?
advantages: preempt rivals-brand name and demand, experience curve/cost advantages, create switching costs, establish social ties/contacts, create the rules/product qualifications disadvantages: lessons for competitors, may have cost of building infrastructure/market, may cost time/money to change regulation, "trains" customers for followers, pay a steep price in creating the product category
exclusive distribution channel
an _________ __________ ___________ is one that is difficult for outsiders to access. (ie japan's system-might need to introduce a new product to bypass existing barriers, use joint ventures, or distribute in new ways)
outpost
an ___________ factory is placed near a competitor and is based on the countries' strategic importance, rather than on the production logic of a location.
spotted quickly
an advantage of JIT inventory systems is that parts enter the production process immediately. In that way, defective parts can be __________ ___________.
costs, regulatory, barriers, missing, complementary
an equity joint venture is ideal if.... -significant investment requirements- share ________S (manufacturing efficiency, development costs, shared distribution) -__________ trade or investment _________S -basic operational or knowledge component ________ing by both partners -___________ skills- each one needs the other
ikea
an example of a good strategy includes _________ who sells furniture to certain markets (inexpensive, stylish furniture, with a fun, low pressure environment, with immediate fulfillment), they also have excellent design of business through the fact that products are designed for mass production (flat boxes require customer to do the final assembly but reduce shipping costs) -complex interdependence of this company's strategy makes it difficult to imitate. -must draw clear boundary line of what to do and what not to do
expatriate
an intensive training program to give managers the skills required for success in a foreign posting is part of _________ training
global standardization strategy or a transnational strategy
as competition intensifies, international and localization strategies tend to become less viable and managers need to orient their companies toward either a ___________ ____________ STRATEGY OR A _______________ STRATEGY
empathize
as defined in the text, perceptual ability is synonymous with the ability to ____________.
more, decrease
as management learns how to ______ effectively manage an operation, production costs are likely to ________. This is an example of learning effects. (,)
personal, bureaucratic, output
common types of control systems 1. __________ controls-personal contact with subordinates-most widely used in small firms 2. _____________ controls- a system of rules and procedures that directs the actions of subunits-budgets and capital spending rules 3. _________ controls- setting goals for subunits to achieve and expressing those goals in terms of objective performance metrics- compare actual performance against targets and intervene selectively to take corrective action.
direct selling, sales promotion, direct marketing , advertising, PR
communication channels available include: (5)
pull
consumer goods firms trying to sell a large segment of the market tend to prefer a _______ strategy (this type of strategy is also popular when distribution channels are long, when sufficient print and electronic media are available to carry the marketing message)
cultural differences
countries differ along cultural dimensions aka _________ _____________S (tradition, social structure, language, religion, education) some evidence that tastes and preferences are becoming more cosmopolitan, but the global culture that levitt proposed is still a long way off.
inelastic
demand is __________ when a large change in price produces only a small change in demand
elastic
demand is __________ when a small change in price produces a large change in demand.
large, small
difference between types of entries (scale of entry) a ________ scale entry: is a strategic commitment-difficult to reverse, opportunity costs: resources cannot be used elsewhere, linked to 1st mover advantages a ________ scale entry: allows learning at low risk, ideally built to offer next stages
is it desirable to be the 2nd mover?
disadvantages -pre existing competitor w/ 1st mover advantages -fight for market share-differentiation
retail concentration, channel length, channel exclusivity, channel quality
distribution strategies differ across countries because of local..... (,) (4)
markup
each intermediary adds its own __________ to the products, there is a link between channel length and profit margin (if price is important, shorter channel is better and if a retail sector is very fragmented, a long channel is better) -these choices are difficult enough in your home market, but even more so when you venture abroad
competencies
examples of core ___________S include: cost leadership, products with highly desired value added, allowing for premium pricing, superior delivery in services
formal integrating mechanism, teams, control mechanisms
examples of how subunits can be integrated: -simplest _______ ____________ ____________ is direct contact between subunit managers, followed by liaisons -temporary or permanent ________S composed of individuals from each subunit is the next level of formal integration. -formal _________ ____________S to manage and evaluate subunits' performance- this is the rule
international franchises
examples of leading __________ ____________S: subway, mcdonalds, 711, KFC, pizza hut, dunkin donuts, UPS, etc.
licensors
examples of leading __________S ranked by revenues: disney consumer products, ICONIZ, phillips, mattel, warner bros, marvel entertainment, nickelodean
high value/weight ratio
exporting is ideal for initial exploration of international markets, as a regional strategy for small markets, as a fundamental aspect of a centralized production strategy, and for products that have a ________ _________/_______ ________ (i.e., iphones better than cement)
price discrimination
firms can maximize profits through ______ __________; charging consumers in different countries different prices for the same product. (for it to work: firm must be able to keep national markets separate, different price elasticities of demand must exist in different countries)
to bring together complementary skills, to share fixed costs of developing new products, to facilitate entry into a foreign market
firms engage in strategic alliances for what 3 reasons? (,)
product divisional structure
firms may switch to a __________ ____________ ____________ -where each division is responsible for a distinct product line -headquarters retains control for the overall strategic direction of the firm and for the financial control of each division.
cost reductions, locally responsive
firms that compete in global markets typically face pressures for ________ _________S (which typically require a firm to try to lower the costs of value creation) and pressures to be ________ ________. (these place conflicting demands)
indirect, direct
forms of exporting _________ -sell product domestically to exporter (export management company, foreign distributor, foreign firm in domestic market) -no direct engagement in international environment _________ -direct handling of exporting -must develop/have technical and market expertise
consumer, speed, trade barriers, significant
franchising ideal for _________ goods/distribution/services, similar to licensing with regard to ________, ______ ________S, but superior to licensing when brand image/integrity is ___________, proven concept with little adaptation needed
mass production
government mandated product standards can make _________ PRODUCTION difficult.
theft of technology
granola grains corp has asked that the contract with their new european partner include a provision to protect granola grains from the risk of opportunism. This provision protects them from the __________ OF __________
the importance of horizontal differentiation
horizontal differentiation: -how the firm divides into subunits -usually based on function, type of business, or geographical area -most firms begin with no formal structure but later split into functions reflecting the firm's value creation activities- functional structure. -functions are coordinated and controlled by top management -decision making is centralized -product line diversification requires further horizontal differentiation.
shock therapy, slow adaptation, change's sake, difficult
how can firms implement organizational change? 1. ________ _________ when needed- requires taking bold actions like plant closures or dramatic structural reorganizations 2. _______ ____________-stepwise (without creating chaos) 3. change for _________'s ______ every few years- build a tradition for change as each organizational model has its limits change is always _________-politics/power, division of opinions, culture, institutional limits/restrictions
open, critical, big, deep dives, independent, strategy and finance
how to do strategic planning right? (,) -encourage ______ discussions and ________ thinking -focus on ______ pictures, not on minutiae. -select "_______ ______S" on select strategic issues. -process best lead by "__________" strategy department under heavy participation of finance and all divisions. -integrate the strategic and financial plan well by a close cooperation between __________ AND ___________. -realize the dirty secret that plan building might be more important than the plan itself (org comes together, time given to think/review/analyze/brainstorm, internal and external communication motivating)
germany
in __________, most union leaders take a moderate political stance.
country screening for foreign direct investment
in a __________ __________ FOR ________ ________ ___________, this is what should be considered: -long term prospects for growth and sizable returns -cost of doing business based on available infrastructure, tax rates, wages, and worker skills -country risk like regulatory, financial, political, and cultural barriers and intellectual property protections -competitive environment -government incentives such as tax holidays, subsidized training, grants, or low interest loans.
country screening
in a __________ __________ING -if the impression is bad, a manager will manipulate the numbers to make the proposed FDI look unacceptable and vice versa if the impression is good -subordinates might fudge numbers to be in line with their managers.
synergies, risks and costs, growth
in an equity joint venture-putting cash, skills, and management into a new entity advantages are... -knowledge _________S -shares _____S AND _______S -might surmount political and/or trade barriers -______ option for new markets
control, profits, coordination, messy without divorce
in an equity joint venture-putting cash, skills, and management into a new entity disadvantages are.. -loss of _________ -share ______S -___________ challenge -can be ______ WITHOUT ________ agreement
shared
in global supply chain coordination, joint consideration or replenishment, inventory holding costs, and collaboratively planning are all examples of _________ decision making
intermarket segments
in market segmentation, consider the existence of ___________ __________S that transcend national borders and understand differences across countries in the structure of segments.
customize, maximize
in regards to market segmentation... customize the product, the packaging, or the way in which the product is marketed in order to __________ performance in market where there are no cross national segments
0, 1, 2
in regards to show levels of each p's competitiveness -award points -_____-no difference/weak -____-modest differentiation/better than competitors -_____-unique/strong point for differentiation, competitors will need several years to catch up; if at all (,)
how can you better leverage your talent to accelerate your unique positioning?
in regards to the 8 ps, what is the key question asked for people?
what do your customers see, hear, feel, smell, or taste that other cannot deliver?
in regards to the 8 ps, what is the key question asked for physical experience?
what is innovative about the way you distribute or deliver your product or service?
in regards to the 8 ps, what is the key question asked for placement?
how are you uniquely positioned in the minds of your customers?
in regards to the 8 ps, what is the key question asked for positioning?
How differentiated are you in the perceived value you offer vis a vis the perceived cost?
in regards to the 8 ps, what is the key question asked for price?
what unique processes differentiate how you deliver your product or service?
in regards to the 8 ps, what is the key question asked for processes?
what product features, service elements, or unique capabilities do you offer that others cannot?
in regards to the 8 ps, what is the key question asked for product?
how do you systematically market your differentiation?
in regards to the 8 ps, what is the key question asked for promotion?
pricing strategy
in terms of _______ __________ (4th p) -firms must consider (costs related to selling in a foreign market, tax optimization and transfer pricing, price discrimination, strategic pricing, government mandated price controls)
cash in advance
in terms of methods of payment: _______ IN _________; advantages: best for the seller disadvantages: risky from the buyer's standpoint (unpopular) tends to discourage sales
letter of credit
in terms of methods of payment: _________ OF ___________; advantages: a contract between the banks of the buyer and the seller. Largely risk free, it helps establish instant trust disadvantages: requires following a strict protocol specified in the contract. can involve much paperwork
open account
in terms of methods of payment: _________ __________; advantages: easy for the exporter, who simply bills the buyer, who is expected to pay at some future time as agreed disadvantages: risky unless there is a strong, established relationship between exporter and buyer
nature of foreign direct investment
in the ________ OF __________ _________ ____________, it is undertaken by firms from both advanced economies and emerging markets, target countries are both advanced economies and emerging markets
primary activities, support activities
in the firm as a value chain (II/II) (,) 1. __________ ________S: involves creating the product, marketing and delivering the product to buyers, and providing support and after sale service to the buyers of the product. 2. _________ _________S: provides the inputs that allow the primary activities of production ad marketing to occur.
goals, tactics, objectives, descriptions
in the video "what is strategy" they gave examples from companies about "strategies" such as "be the low cost provider, pursue a global strategy, integrate a set of regional acquisitions, unrivaled customer service, to always be the first mover, move from defense to industrial applications" however these are all really ________s, ________s, _________s, __________s. (small pieces of overall strategy)
acquisition
in tradeoffs between greenfield and acquisition: __________: has faster to begin operations, gain country expertise immediately -access to new technolgoy -not all companies can be bought or like to be bought -GREAT FOR MANAGEMENT
greenfield
in tradeoffs between greenfield and acquisition: ________: has less "baggage", acclimate at own pace (pacing of investing and learning) -customize to firm's needs -less risk of overpaying (hubris)
push
industrial products firms or makers of other complex products favor a _______ strategy.(this type of strategy is also popular when distribution channels are short, when few print or electronic media are available)
variance reduction
integrating a control system to eliminate global supply chain disturbances refers to ________ __________.
long term and to survive
international strategy may not be viable in the ______ ______ AND TO _________, firms need to shift toward a global standardization strategy or a transnational strategy in advance of competitors.
why, where, when, how big, how
key entry decisions ______?-reasons for (further/new) international expansion(reasons include: value creation, decrease costs, expand markets, secure factors of production, enhance operations, hedge currency, home country instability, attractive political/economic/cultural environment, VANITY, HUBRIS, and/or EXECUTIVE COMP of executives; essentially you are trying to increase value or decrease risk) _______?-country selection (very complex process, determine your strategic and financial objectives, conduct a strategic analysis of your firm's strengths/weaknesses, determine why you want to expand internationally, identify relevant criteria-prioritize, screen again and again, get feedback from senior management, conduct financial analysis, create options with pros and cons, cheaper factors of production, proximity to markets, state incentives, secure factors of operation, enhance operations, political/economic/cultural attractiveness, proximity of culture/language, PERSONAL INTEREST and/or beliefs of executives, FOLLOWING A MANAGEMENT FAD, often instigated by consultancy firms, hearsay, or groupthink), proximity of culture/language (impressions and intuition about a country can play a key role in the decision to invest, political risk/uncertainty elicits the response of "stop. wait and see." _______?-timing of entry (advantages versus disadvantages ______ ________?-scale of entry (large or small) _______?- mode of entry (contractual strategies; licensing, franchising and more), exporting-direct/indirect, strategic alliance (production based, distribution based, technology based), joint venture, acquisition, greenfield
core competencies
leveraging products and competencies -to increase growth, a firm can sell products or services developed at home in foreign markets -success depends on the type of goods and services, and the firm's ________ ___________S (skills within the firm that competitors cannot easily match or imitate)
rapid diffusion, non strategic, investment funds, high risk, trade barriers
licensing is ideal for ________ __________ of product or business model, in _____ __________ locations or with limited demand, with limited __________ FUNDS, with non-essential processes or technology, in ______ ________ or highly specific local business conditions, when there are significant ________ _________S.
costs of value creation, differentiate
locating value creation activities in optimal locations: can lower the ________S OF _________ _________ -can enable a firm to _____________ its product offering from those of competitors. (,)
problems with many acquisitions
major _________S WITH MANY ____________S: the firm overpays for the acquired firm, clash between the cultures, attempts to realize synergies through integration run into roadblocks and take much longer than forecast, there is an inadequate pre-acquisition screening, stats show that more than half fail or have significant problems, global mega mergers are at most risk of value destruction.
relational capital
managing an alliance successfully requires building interpersonal relationships between the firms' managers, or what is sometimes referred to as __________ _________.
ethnocentric-international, polycentric-localization, geocentric-transnational
match the staffing approach to its compatible strategy
strategy, strategic
mission-why are we here? vision- long term goals (quantitative/qualitative) _________- how(high level)? _________ic plan- how?, 3-5 years, scenarios, responsibilities -annual goals/annual plans- this year/fiscal year operations/functions of a firm -strategic versus operative -has a military origin (the significant actions taken by managers to attain the goals of the firm) (tactics and goals that ultimately try to lead to victory)
premium
often an expatriate will receive extra compensation for working outside his or her country of origin. This is referred to as a foreign service __________.
processes
one of the components of organization architecture: ________S: manner in which decisions are made and work is performed within the organization (to manage and keep things together, many cut across national boundaries as well as organizational boundaries, formal and informal integrating mechanisms can help firms leverage these, these need to be revised and updated to keep effective and efficient)
controls
one of the components of organization architecture: ________S: metrics used to measure the performance of subunits and make judgements about how well the subunits are run.
incentives
one of the components of organization architecture: __________S: devices used to reward appropriate managerial behavior. (should vary depending on the employee and the nature of the work being performed, promote cooperation between managers in sub-units, reflect national differences in institutions and culture, used to align interests, usually closely tied to performance metrics used for output controls) and can have unintended consequences. big issue: performance ambiguity and evaluations-the more complex the situation the less you know the cause
organizational culture
one of the components of organization architecture: ___________ _____________: norms and value systems that are shared among the employees
people
one of the components of organization architecture: employees and the strategy used to recruit, compensate, and retain those individuals.
location economies
one of the options for global expansion and profits is _________ ___________S: firms should locate value creation activities where economic, political, and cultural conditions are most conducive to the performance of that activity. (which are the economies that arise from performing a value creation activity in the optimal location for that activity)- this can lower the costs of value creation and help the firm to achieve a low cost position, and/or it can enable a firm to differentiate its product offering from those of competitors
economies of scale effect
one of the options for global expansion and profits is __________S OF _______ EFFECT (reductions in unit cost achieved by producing a large volume of a product) sources include: -the ability to spread fixed! costs over a large volume -The ability of large firms to employ increasingly specialized equipment or personnel -serving a global market from a single location is consistent with moving down the experience curve and establishing a low cost position.
international markets, location economies, cost economies, leveraging any valuable skills
options for global expansion and profits 1. expand the market for their domestic product offerings by selling those products in _________ _________S. 2. realize ________ _________S by dispersing individual value creation activities to locations around the globe where they can be performed most efficiently and effectively. 3. Realize greater _______ ________S from experience effects by serving an expanded global market from a central location, thereby reducing the costs of value creation 4. earn a greater return by __________ ANY _________ SKILLS developed in foreign operations and transferring them to other entities within the firm's global network of operations.
informal
personal relationships help foster ___________ management networks between partner firms that can be used to help solve problems
exporting
potential goals of _______ing: -increase overall sales volume, improve market share, and generate profit margins that are often more favorable than in the domestic market -increase economies of scale, reducing per unit cost of manufacturing -diversify customer base, reducing dependence on home markets -stabilize fluctuations in sales associated with economic cycles or seasonality of demand -minimize the cost of foreign market entry; the firm can use exporting to test new markets before committing greater resources through FDI -minimize risk and maximize flexibility, compared to other entry strategies -leverage the capabilities and skills of foreign distributors and other business partners located abroad.
greater
price elasticities tend to be _________ in countries with lower income levels and more competitors
research and development, production, marketing and sales, customer service
primary activities (have to do with the design, creation, and delivery of the product; its marketing, and support, and after sale service) can be divided into four functions: _________ AND ___________, __________, _________ AND _________S, _________ __________.
what is organizational architecture?
processes, organizational culture, and people
100
product returns cost manufacturers and retailers more than _____ billion dollars per year in the United States.
optimal
realize location economies: economies that arise from performing a value creation activity in the ____________ location for that activity, wherever in the world that might be.
strategic planning is important
reasons why _________ __________ IS IMPORTANT: institutionalized thinking about the company's direction-time freed up and accounted for to do the exercise -everybody needs to know the direction of where the company should be and is heading to -get a joined understanding of strategy and its planned implementations (responsibilities, action steps, contingencies, funding) -be able to articulate it (to external/internal stakeholders) -compare plans and results and make adjustments (during fiscal year)
ethnocentric approach
since it may keep a firm from developing cultural myopia, the polycentric approach is a response to the shortcomings of the ____________ ____________.
shortage
since no buffer stock is stored, one disadvantage of a JIT inventory system is that a company might experience a __________ if there is a disruption among its suppliers.
not, block
standardized advertising does ______ make sense when: -cultural differences among nations are significant -country differences in advertising regulations ________ the implementation of standardized advertising
profitability and profit growth
strategy typically focuses on ____________ (the rate of return the firm makes on its invested capital) AND _______ ___________ (the percentage increase in net profits over time)-this is to maximize the value of the firm
do this
study the charts on slides
potential issues with expat contracts
taxation: company might tax equalize an expat, though there might be important limits, single versus double taxation heavily dependent on a person's passport and tax treaties, separation/failure: the expat contract should stipulate conditions for both success and failure.
support activities
the _________ __________S of the value chain provide inputs that allow the primary activities to occur. In terms of attaining a competitive advantage, these activities can be as important, if not more important than primary activities.
efficiency frontier
the _________ ____________ shows all of the different positions that a firm can adopt with regard to adding value to the product and low cost, assuming that is internal operations are configured efficiently to support a particular positions. (convex shape due to diminishing returns)
operations
the _________S of a firm can be thought of as a value chain composed of a series of distinct value creation activities, including production, marketing and sales, materials management, research and development, human resources, information systems, and the firm infrastructure.
experience curve
the __________ __________: systematic reductions in production costs to occur over the life of a product -a product's production costs decline by some quantity about each time cumulative! output doubles (explained by learning effects and economies of scale)
global learning
the concept that valuable knowledge can be found in foreign subsidiaries is known as ______ _________. (focus of transnational strategy)
machine cells
the main advantage of flexible manufacturing technology is its high flexibility in managing manufacturing resources like time and effort in order to manufacture a new product. Flexible ______ ________S are an example of a common flexible manufacturing technology.
contribution
the main difference between a ____________ factory and a server factory is that a contributor factory has responsibilities for product and process engineering and development.
turnover
the number of times a company's inventory is sold and replaced over a period is called inventory ___________.
repatriation
the process that involves preparing expatriate managers to return to their home country organization is called ___________.
partner selection, alliance structure, manner in which alliance is managed
the success of an alliance seems to be a function of 3 main factors: _________ ___________, __________ __________, __________ IN WHICH ALLIANCE IS ___________.
core competence
the term _________ ___________ (underlie development, production, marketing) refers to skills within the firm that competitors cannot easily match or imitate. These skills may exist in any of the firm's value creation activities: production, marketing, R&D, human resources, logistics, general management, etc.
mass customization
the term used to describe a company's ability to produce a customized product at low cost is _________ _______________
people as not only individuals
the text defines _________ AS NOT ONLY ___________S, but the ability to recruit, compensate, and keep employees.
learn, knowledge
to get the most out of a strategic alliance, companies should ______ from partners and apply __________ from the alliance in your own firm
false
true or false: competitive pressures are present if a firm produces a specialty product that can be easily differentiated by non price factors.*****
integration, coordination
two factors that are critically important to the success of global supply chain coordination: (,)
persistent excess capacity, competitors that are based in low cost locations
two factors that contribute to pressure for companies to reduce costs if they want to compete globally include: (,)
when cost pressures are not intense, when there are large differences across nations in tastes and preferences
two situations when a localization strategy is best utilized (,)
resentment and lower productivity
two things may occur as a result of the limits an ethnocentric staffing policy puts on advancement for host country nationals? (and)
long and complex process; data overload, extrapolates the future instead of new critical thinking, can be biased in terms of "what the boss thinks", top down goals versus bottom up thinking is hard to manage, budget restrictions, few companies are trained to think in growth /insurance or use option to wait, difficult to stop ongoing initiatives for political reasons, choice of foreign exchange rates;transfer pricing;trust in people/data
typical issues with strategic planning: (,) (8)
management contract
under a ___________ __________, a contractor supplies managerial know-how to operate a hotel, resort, airport, hospital, or other facility in exchange for compensation
bargaining
unions use threats to disrupt production in order to gain ___________ power
turnkey projects
what are "design, construct, equipment facility for local firm/government, usually complex PROJECTS?" (ex. oil platforms, water systems, call centers in India, subway systems)
management contracts
what are "rents" management services, few risks/obligations?
control systems
what are "the metrics used to measure performance of subunits?"
product pricing, inventory management, sales tracking
what are 3 examples of information systems used to support the value chain? (,)
controls, incentives, processes, organizational culture, people
what are the components of organization architecture? (,)
country factors, technological factors, product factors, strategic role for
what are the main factors when deciding where to produce? (,)
differences in consumer tastes and preferences, differences in infrastructure and traditional practices, differences in distribution channels, host government demands, the rise of regionalism
what are the pressures for local responsiveness? (,) (to respond to these pressures, firms need to differentiate their offering)
fast follower and innovative late mover
what are the two second mover strategies? (and)
global sourcing and global logistics
what are two corporate functions for global supply? (and)
master franchise
what is "an independent company authorized to establish ,develop and manage the entire franchising network in its national or regional market?"
business process outsourcing
what is "outsourcing of business functions to independent suppliers such as accounting, human resource functions, IT services, and customer service?" (back office and front office activities)
organization architecture
what is "the totality of a firm's organization- formal organizational structure, control systems and incentives, organizational culture, processes and people?"
strategic planning
what is _________ __________? articulated plan (mission, vision, goals, etc.), strategic differentiation(market data), organizational engagement(cascaded goals or everyone knows function), organizational transformation (quarterly business reviews)
worldwide product division structure
what is __________ ____________ DIVISION STRUCTURE-"adopted by firms that are reasonably diversified, allows for worldwide coordination of value creation activities of each product division, helps realize location and experience curve economies, facilitates the transfer of core competencies, does not allow for much local responsiveness?" (the case of IBM)
global matrix structure
what is __________ ____________ STRUCTURE-"which tries to minimize the limitations of the worldwide area structure and the worldwide product divisional structure, allows for differentiation along two dimensions(product division and geographic area), has dual decision making(product division and geographic area might have equal responsibility for operation decisions), but there is one primary line of reporting, one secondary (it can help to flip primary and secondary lines from time to time) can be bureaucratic and slow, can result in conflict between areas and product divisions, can result in finger pointing between divisions when something goes wrong? "the end game?"
worldwide area structure
what is ___________ ___________ STRUCTURE-"favored by firms with low degree of diversification and a domestic structure based on function, divides the world into autonomous geographic areas, decentralizes operational authority (to a degree), facilitates local responsiveness, can result in a fragmentation of the organization, is consistent with a localization strategy?" (the case of GM)
shock therapy
what is a type of change that firms use to implement organizational change (when needed)which requires taking bold actions like plant closures or dramatic structural reorganizations?
innovative late mover
what is one of the second mover strategies that is a second mover who enters the market exploiting an innovative difference with a 1st mover, essentially reshapes the market enjoying many of the advantages of a 1st mover, especially appealing when technology advantage and expected life of the product market is long?
fast follower
what is one of the second mover strategies that is a second mover who quickly enters the market after a 1st mover, especially appealing to agile firms with deep pockets?
transnational
what strategy should be used with high pressures for local responsiveness and high pressures for cost reductions?
localization
what strategy should be used with high pressures for local responsiveness and low pressures for cost reduction?
global standardization
what strategy should be used with low pressures for local responsiveness and high pressures for cost reduction?
international
what strategy should be used with low pressures for local responsiveness and low pressures for cost reduction?
outsourced, industries
what tends to get outsourced... easily ______________ jobs tend to be in __________S: that benefit from efficiency and low cost, that have uniform processes and customer needs, in the service sector that are labor intensive, whose outputs are easily transmitted via the internet.
logistics
what term is given to the activities that encompass the movement of physical materials through the supply chain?
paperwork between suppliers and shippers is virtually eliminated and suppliers and shippers can communicate with no time delay
what two characteristics are associated with using an EDI system?
relationship development and willingness to communicate
what two factors are particularly important in the others-orientation dimension identified by Mendenhall and Oddou?
type, sophistication, length, availability
when firms must choose between push versus pull communication strategies, the choice depends on product ________ and consumer _____________, channel _______, media ___________.
2nd mover
when is it desirable to be the _______ _________? advantages: learn from 1st mover mistakes, revise rather than create, create switching costs, no need to create market, create better rules/product qualifications (might create a more customer friendly standard) disadvantages: pre-existing competitor w 1st mover advantages, fight for market share-differentiation, switching costs, pre-existing rules/market expectations
1st mover
when is it desirable to be the _______ _________? advantages: preempt rivals-brand name and demand, experience curve/cost advantages, create switching costs, establish social ties/contacts, create the rules/product qualifications disadvantages: lessons for competitors, may have cost of building infrastructure/market, may cost time/money to change regulation, "trains" customers for followers, pay a steep price in creating the product category
practical
when the murphys were posted to thailand for a management opportunity, they quickly joined the expatriate community to learn the ins and outs of living in the Thai culture. This is a form of _________ training
short
when the producer sells directly to the consumer, the channel is very _______
long
when the producer sells through an import agent, a wholesaler, and a retailer, a _______ channel exists.
international strategy
which STRATEGY tries to create value by transferring core competencies to foreign markets where indigenous competitors lack those competencies?
bulk chemicals
which product has a low value to weight ratio?
consumer
while a global standardization strategy is often found in industrial good industries, it is not as common as in __________ good markets
management and leadership
with regard to management development, research suggests that broad international experience will enhance _____________ AND ______________ skills of executives.