MGMT 3004 Exam 2
Regularities in search behavior
• "if it ain't broke, don't fix it" means that organizational bias is the status quo unless confronted with a problem • firms are generally biased against search for distant solutions, results in minor tweaking
What is the value of the new tech? look for:
• "innovators dilema" (e.g. profits from sales or licensing will be low) • product characteristics valued by the new set of customers • extendibility of old tech. (through investment in process innovation)
When will acquisitions increase value?
"to be successful, acquisitions have to be strategic, earning-growth positive and easily understood by shareholders"
What percent of M&A creates value?
33%
How to measure diversification 2
HERFINDAHL INDEX •where s! is the share of the ith segment in the total sales of the firm • thus, HHI for a firm with two business units with equal sales is: (.50)^2 + (.50)^2 = .50 • more commonly used as industry concentration measure
Corporate scope decisions
HORIZONTAL SCOPE: which industries should we participate in? VERTICAL SCOPE: what stages of the industry value chain should we participate in? i.e. should we backward or forward integrate? GEOGRAPHIC SCOPE: where should we compete?
What to look for when assessing your R&D investments
HOW LONG WILL THE CORE BUSINESS REMAIN HEALTHY? WHAT IS THE ADOPTION RATE OF THE NEW TECH? WHAT IS THE VALUE OF THE NEW TECH? WHAT ARE THE RISKS ASSOCIATED W/ THE NEW TECH?
Corporate strategy: key skills
IDENTIFY ECONOMIES OF SCOPE • identify core competencies/valuable resources & capabilities & their sustainability (VRIN) • critically assess the ability to leverage them in new contexts • critically assess the costs and challenges of leveraging • identify possibilities for shared activities • identify possibilities for increased bargaining power CONSIDER HOW TO DIVERSIFY- WHICH APPROACH?
Formal structure affects interpretation of information
at different levels of corporate hierarchy, decision-makers will interpret the same information differently
Functional structure advantages and disadvantages
ADVANTAGES • centralized decision making enhances coordination and control • more efficient use of managerial & technical talent • allows functional specialization resulting in active knowledge sharing in each functional area • allows career paths and professional development by function DISADVANTAGES • can negatively affect communication and coordination among those representing different organizational functions • may lead to optimizing functions vs. organizations as a whole • can be difficult to establish uniform performance standards
Licensing/Contracting advantages and disadvantages
ADVANTAGES • minimizes risk, investment • speed in entering market • able to circumvent trade barriers • relatively high returns given low investment • can be viewed as insider DISADVANTAGES • lack of control over use of assets • product quality may suffer • potential for knowledge spillovers • licensee may become competitor
Wholly-owned subsidiary
ADVANTAGES • most potential to gain above-average returns • minimizes knowledge transfers • maximize control over quality & how business is done in the new market DISADVANTAGES • most risky & expensive way to enter a new country (investment, resources, commitment) • slows entry in a new market
Joint ventures/alliances advantages and disadvantages
ADVANTAGES • overcomes ownership restrictions & cultural distance • combines resources of 2 companies, potential for learning • viewed as insider • reduces investment compared to sole ownership DISADVANTAGES • difficulties in managing the joint venture • dilution of management control • partner may behave opportunistically • partner may become competitor; potential for knowledge spillovers
Cross-border M&A advantages and disadvantages
ADVANTAGES • rapid access - can quickly gain knowledge of local markets & customers • can overcome trade barriers • can overcome cultural differences • minimizes knowledge transfers • can be viewed as an insider DISADVANTAGES • risky & expensive way to enter a market • has the many disadvantages of acquisitions generally • post acquisition integration is even more challenging due to cross-country/cultural issues
Divisional structure advantages
ADVANTAGES •separation of strategic & operating control • quick response to important changes in external environment • development of general management talents is enhanced • enables monitoring the performance of each business, which simplifies control • facilitates comparisons between divisions, which improves resource allocation process • it stimulates managers of poorly performing divisions to look for ways of improving performance
Exporting advantages/disadvantages
ADVANTAGES: • minimizes risk • entry can be very fast • maximizes scale, utilization of existing facilities • relatively low investment DISADVANTAGES • trade barriers • transportation costs • exposure to currency fluctuations • limited access to local information • company viewed as outsider • goal conflict w/ agents or distributors, contracting costs
Using the GE/McKinsey Matrix
ALLOWS HIGHLY DIVERSIFIED FIRMS TO: • assess which businesses are worth investing in • by comparing very different businesses KEY QUESTIONS: • how attractive is the industry? • does the business unit have the capabilities to compete effectively • with investment can the business be moved out of its current position into a better position? THE MATRIX DOES NOT ALLOW FIRMS TO: • identify how to improve the business (i.e. whether to invest in the brand, R&D, distribution, etc)
Vertical integration: BENEFITS
BENEFITS • securing sources of supply of raw materials • securing distribution channels • lowering costs • improving quality • facilitating scheduling and planning • simplified procurement and administrative procedures • access to specialized assets
How to measure diversification 1
BUSINESS COUNT APPROACH • number of industry groups (SIC, UKSIC, etc. codes) in which a firm operates • codes provide definitions of industry groups [examples] - SIC 7999: amusement and recreation services - SIC 7812: motion picture and video tape production - SIC 4833: television broadcasting stations
People
CHARACTERISTICS OF INDIVIDUAL MEMBERS OF THE ORGANIZATION • personalities • motivations • knowledge and skills • demographic characteristics
Alliances continued
COMPLEMENTARY VS. COMPETITIVE COMPLEMENTARY HORIZONTAL ALLIANCES: same stage of the value chain COMPLEMENTARY VERTIAL ALLIANCES: different stages of the value chain
Managing alliances
CONTRACTS ARE IMPORTANT BUT NEVER COMPLETE • clarify expectations, set boundaries ALIGN INCENTIVES • future growth prospects DEVELOP ORGANIZATION TO MANAGE ALLIANCE: DUAL OBJECTIVE • internal buy-in • boundary spanners CONTINGENCY PLAN FOR EXIT • some internal capability maintained [CONTINGENCY PLAN FOR EXIT] • pre-nup
Example of congruence between strategy and structure
COST LEADERSHIP AND THE FUNCTIONAL STRUCTURE • simple reporting relationships • few decision-making and authority layers • centralized corporate staff • strong operational focus on process improvements • low-cost culture • centralized staff decisions-making authority • highly formalized rules and procedures
International strategies: two fundamental decisions
GLOBAL STRATEGY: standardization across countries MULTIDOMESTIC STRATEGY: local adaption
Post-acquisiton integration
CREATE INTEGRATION TEAM W/ TARGET & ACQUIRER PPL • resolve power & people issues quickly • clearly delineate roles & responsibilities PLAN, COMMUNICATE BILATERAL RECONFIGURATION • transfer best practice from target or acquirer • find opportunities for combined reconfiguration ESTABLISH DEAL THESIS - this deal will... QUICK WINS------&------DIVEST WHAT YOU DO NOT NEED
CAGE framework
CULTURAL (common language) ADMINISTRATIVE (legal system, common regional trading block, colony/colonizer, common currency) GEOGRAPHIC (physical size, physical distance, common land border) ECONOMIC (wealth, income, GDP, GDP per capita) * all other things equal, firms tend to expand into less "distant" markets first
Christensen's response: innovator's solution
DEFINE THE MARKET PROPERLY • what is the job to be done (milk shakes for boring commutes and milk shakes for kids) OBSOLETE YOUR OWN PRODUCT IF NEEDED • honda sells small motorcycles though sporting goods stores, not motorcycle dealerships SEPARATE CORE BUSINESSES FROM EFFORTS TO DEVELOP DISRUPTIVE TECHNOLOGIES
Divisional structure disadvantages
DISADVANTAGES • can be very expensive (duplication) • can be dysfunctional competition among divisions: "zero-sum" game can discourage sharing ideas and resources among divisions • differences in image and quality may occur across divisions
What are the STRATEGIC benefits of engaging in more than one business?
ELIMINATE OR PREVENT COMPETITION BY SUBSIDIZING A PRICE WAR -unitary competitors may have limited access to capital - caution: may be antitrust violation (e.g. Microsoft) RAISE RIVALS' COSTS (VERTICAL FORECLOSURE) - exert power through backward and forward integration - caution: a near monopoly position must be maintained in the upstream or downstream activity for it to be useful REDUCE RIVALRY THROUGH MUTUAL FORBEARANCE - multipoint competition (competitors are in similar markets) reduces incentives to fight - caution: (1) complexity makes such tacit collusion difficult (2) when price wars do break out, they tend to be severe
External and internal parts of the congruence model
EXTERNAL: fit between environment & strategy INTERNAL: fit between strategy and architecture
Organizational architecture: 4 components
FORMAL ORGANIZATION: explicit, codified aspects of the organization (structure, rewards, control systems) WORK: characteristics of jobs and how jobs are related to each other (e.g. extent of specialization) PEOPLE: characteristics of member of the organization (demography, personality, skills, motivation) INFORMAL ORGNIZATION: implicit, assumed aspects of the organization (culture, values, norms, communication patterns)
Why do companies engage in M&A?
IMPROVE PERFORMANCE/GROWTH • acquire assets or capabilities faster or cheaper than internal development - ideal when high degree of tacit knowledge sharing or coordination required to develop capabilities • accelerate market access for target/buyer's products (small acquisitions) • pick winners early and help them develop their businesses (small acquisitions) COUNTER INDUSTRY FORCES (BIG ACQUISITIONS) • enhance their own market power (5 forces: rivalry, buyer or supplier power) PRE-EMPT COMPETITION
Benefits of international expansion
INCREASED MARKET SIZE • economies of scale and learning LOCATION ADVANTAGES • access to low-cost input facts • develop new competencies
Approaches to achieve diversification
INTERNAL DEVELOPMENT • new products • new markets • new technologies MERGERS AND ACQUISTIONS POOLING RESOUCRES OF OTHER COMPANIES WITH A FIRM'S OWN RESOURCE BASE • strategic alliance • joint venture
Challenges to internal development: managerial decision making
INTERNAL FIT AND CORE RIGIDITIES (HARD TO BREAK OUT OF VIRTUOUS CYCLE) REGULARITIES IN SEARCH BEHAVIOR SMALL SAMPLE EFFECTS
What are the OPERATIONAL benefits of engaging in more than one business?
LEVERAGE KNOW-HOW, CAPABILITIES ACROSS BUSINESSES • share technology, know-how, reputations • lower costs by eliminating duplicate effort • look for GENERALIZED KNOW-HOW that could be applied across businesses (e.g. managerial expertise at GE, cost reduction at 3G Capital) STABILIZATION OF CASH FLOWS • internally finance rather than resorting to external capital markets • look for NEGATIVE CORRELATION OF RETURNS between two businesses (occurs in particular industries such as upstream and downstream units in oil and gas that require large, often risky investments)
Disadvantages of international expansion
LIABILITY OF FOREIGNNESS LOSS OF REPUTATION LOSS OF INTELLECTUAL PROPERTY
Types of diversification
LOW DIVERSIFICATION • single business (Coca-Cola) • dominant business (Disney) HIGH DIVERSIFICATION • related (Pepsi) • unrelated (Siemens)
Merger vs. acquisition vs. takeover
MERGER: two firms agree to integrate their operations on a relatively co-equal basis ACQUISITION: one firm buys a controlling, 100% interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio TAKEOVER: • special type of acquisition strategy wherein the target firm did not solicit the acquiring firm's bid • HOSTILE TAKEOVER: unfriendly takeover that is unexpected and undesired by the target firm
Work
ORGANIZATION STRUCTURE & WORK INVOLVE • fundamental challenge between specialization or decentralization and integration/coordination • how work (the necessary organization tasks) should be organized into jobs that people can (want to) be hired to do CHARACTERISTICS OF COMPONENT TASKS • task uncertainty/complexity... certain, uncertain • knowledge and skill requirements • interdependencies ... how pieces of work flow - pooled, sequential, reciprocal
Organizational evolution
ORGANIZATIONS EVOLVE THROUGH CYCLES OF "COVERGENCE" AND "REORIENTATION" [Convergence]: focusing on achieving internal fit leads to periods of stability [Reorientation]: simultaneous change in strategy, formal, work, people and informal components of the organization TRIGGERS FOR REORIENTATION: • changing environments (for example, global competition or major technological changes) • performance gaps • opportunity gaps
Vertical integration: RISKS
RISKS • increasing costs • reducing quality • loss of flexibility resulting from inability to respond quickly to changes in the external environment • problems associated with unbalanced capacities or unfilled demand along the value chain • increasing the potential for legal repercussions
Why do mergers fail to offer expected results?
SELECTION: POOR CHOICE, OVERPAY • overestimate synergies & underestimate integration costs • megalomaniacal greedy CEOs OVERPAY • winners curse, failure to walk away FAIL TO INTEGRATE • integration takes too long & too much money & too distracting • people leave • synergies and cost savings do not materialize
Alliances and joint ventures
STRATEGIC ALLIANCES • JOINT VENTURE: legally independent company • EQUITY ALLIANCES (2 or more firms, at least one own equity in the other • NON-EQUITY ALLIANCES: includes licensing contracts, distribution contracts, supply contracts, franchising, outsourcing
Structural solutions to innovation problems
STRUCTURAL SOLUTIONS • keeping exploitative activities (tied to existing opportunities) separate from exploratory ones: - spin-off divisions to address new opportunities - different incentive structures across units - different types of organizational structures and reporting systems •flat vs. hierarchical • located away from mainline organization (separated) • reports directly to CEO or other senior executive AMBIDEXTROUS ORGANIZATIONS
What are the risks associated w/ the new tech? look for:
TECHNOLOGICAL: at what stages of development is the technology (or feature)? MARKET: is the market ready for new tech.? multiple applications? how well does it address needs of various segments? EXECUTION: does the firm currently have the complementary capabilities? partners? customers?
Government expropriation
THE "FUNDAMENTAL TRANSFORMATION" • government initially offers investors attractive deal because it needs capital or technology • MNC bargaining power w/ respect to the government declines after MNC sinks capital or transfers skills • government may benefit from changing terms of deal GOVERNMENT EXPROPRIATION • "major" e.g. nationalizing a privately-owned industry (Mexico) • "creeping" e.g. raining tax rates, imposing new fees.. (Fiji)
Pitfalls of acquisitions
THE PROMISE OF VALUE CREATION FROM SYNERGIES MUST FURTHER COMPENSATE FOR: • acquirer's stock price decline on announcement • high price - managers often overbid on acquisitions • lack of synergies or difficulty achieving them - costs of coordination - cultural issues that impede integration
What are the FINANCIAL benefits of engaging in more than one business?
UNIQUE INFORMATION • firms may have privileged information about profitable opportunities unavailable to capital markets • but... little evidence that this is the case if well-functioning capital markets RISK REDUCTION • firms cannot reduce systematic risk (that part of the variance of return that is correlated with overall market return) - only unsystematic risk (firm-specific) • look for WEIGHTED AVERAGE OF BETA COEFFICIENTS from constituent businesses • but... shareholders can choose where to invest for themselves
The danger of generalizing from the right tail
WHAT ABOUT THE MANY THOUSANDS OF IDEAS THAT WERE TRIED AND FOUND NOT TO BE EFFECTIVE? • these ideas are lost and not recorded • the dot com boom was replete with examples of experiments that were foolish (but only in hindsight) • it would be a mistake for large firms to embrace all of those • an investor can diversify more efficiently rather than have a large incumbent do so established firms may well be better off sticking to what they know as long as they do not waste capital in quest for futile growth • Times Warner and AOL • are Christensen's theories mostly about protecting managers, not creating value?
Corporate Strategy
WHERE to COMPETE along 3 dimensions: products & services, industry value chain, and geography (regional, national, or global markets)
Christensen: the incumbents dilemma: to exploit or to explore
[CLAIM: incumbent firms filter during the ferment era - they fail to make adequate investments in new technology persist in investing in mature technology] v [firms listen too much to their best customers] v [over-invest in features (generic strategy = differentiation)] v [miss the features that customers of future/underserved customers want (generic strategy should be to FOCUS)] v [miss the opportunity to lead (Kodak - digital photography, Canon - digital cameras)]
Key questions for assessing risk of FDI
[HOW LONG IS THE PAYBACK PERIOD?] • long paybacks -> greater opportunities for expropriation (natural resources, utilities) [IS THE INDUSTRY OR PRODUCT POLITICALLY SALIENT?] • made by national champions or large employers • vital to national security • natural resources (gold, oil) [IS THERE HISTORY OF EXPROPRIATION & POLICIES TO SUPPORT FDI?] • what are the expectations (privatization) • will there likely be regime change [WHAT INSTITUTIONAL VOIDS EXIST?] • openness to FDI, product markets, labor markets, capital markets • some can be more easily "filled" than others
How to promote investments in disruptive technologies
[S-CURVE ANALYSIS: MAP THE INDUSTRY LIFECYCLE] • identify where in the industry lifecycle a particular technology falls • understand key success factors for that particular stage of the lifecycle [START EARLY AND FAIL FAST] • evaluate whether the firm has the existing knowledge base, financial resources & managerial expertise to develop the new technology(more challenging if also new market) • pace investments to develop baseline knowledge about technology and industry • create small experiments (i.e. small investments) within the organization in order to recognize earlier than later whether new concepts will lead to profit [SEPARATE CORE BUSINESS FROM EFFORTS TO DEVELOP DISRUPTIVE TECH.] • structural separation to ensure mainline business does not crush nascent technologies
"How will buying this asset make my existing business more valuable, and how will we bring value to the asset we are buying?"
firm-specific value is the additional value to buyer of target - typically exploits an asset/resource of the buyer • sales or distribution channel • R&D/Intellectual Property intrinsic value is the value of the future cash flows of the company • value of firm running independently • what you get with a DCF
Functional structure
for single or closely related products/service, high production volume, stable environment, and limited vertical integration
Key issue of assessing your R&D investments
how do you balance investments in sustaining technology with investments in disruptive (new) technology?
Liabilities of foreignness
lower cancellation rate, quicker deal closing for companies that engage in CSR activities, especially important for developing companies
How long will the core business remain healthy? look for:
slowing growth & declining market share (of old technology within industry)
What to look for when assessing whether to focus vs. diversify
• UTILIZE THE GE/MCKINSEY MATRIX (FURTHER INVESTMENTS, SUSTAIN, DIVEST) • DIVEST BUSINESSES IN UNATTRACTIVE INDUSTRIES OR FOR WHICH THE FIRM HAS WEAK CAPABILITIES - has the business lost focus? - what are the opportunity costs of hanging on to businesses? - can resources be better deployed elsewhere? • EXPAND SCOPE FOR GROWTH, OPERATIONAL AND STRATEGIC REASONS - [growth]: look for growth opportunities and potential for complementarities with existing capabilities - [operations]: look for potential costs savings (through scale and scope) - [strategic]: look for ways to mitigate competition
Multinational Enterprise (MNE)
• a company with operation in at least two different nation-states • another important term: FOREIGN DIRECT INVESTMENT (FDI), as opposed to portfolio investment • other common names for MNE: transnational corporation, global corporation, multinational firm, multinational corporation, etc.
Unrelated diversification examples
• berkshire hathaway • textron • PE firms * unrelated diversification requires managers to argue that they can personally allocate capital more efficiently than the market
Cost drivers
• big differences in cost across countries • low transportation costs • potential for economies of scale • potential for economies of scope
Simple structure
• decisions making is highly centralized - owner-manager makes major decisions & monitors activities, staff acts as extensions of manager's supervisory authority • coordination of tasks by direct supervision • little specialization of tasks, few rules & regulations, informal evaluation & reward system • as firm grows more complex, need to add layers and controls
Making diversification work
• diversification should create value through SYNERGY [Business 1 + Business 2 > 2] • if this equation does not hold, shareholders are better off investing in each business independently
Performance implications: the diversification discount
• diversified firms are valued at a discount relative to a portfolio of comparable, single-segment firms • diversifying mergers results in a relative loss in stockholder wealth of 25% by the 3rd post-merger year, and EVERY 10% DECREASE IN FOCUS RESULTS IN A 9% LOSS IN STOCKHOLDER WEALTH • long-run abnormal RETURNS spanning the three years AFTER A SPIN-OFF THAT INCREASES CORPORATE FOCUS AT 47% GREATER than the returns to firms that engage in spin-offs that do not increase focus
Formal organization
• explicit, codified aspects of organization • strategic grouping (product, functional, matrix) • linking mechanisms (team, task force, formal roles) • structure of sub-units • reward, control systems • career system (dual ladder, job assignments, transfer) • job design • architecture/physical location
Sequence of expansion
• exports from the home country • establishing a sales subsidiary: - with exports from the home country - with outsourced or licenses local production • establishing a first foreign plant • establishing additional plants
Competitive drivers
• feasible to protect intangibles • global competitors • high industry concentration • few differences in industry concentration across countries
Unrelated diversification: value creation logic
• financial economies -Internal Capital Market Allocation • restructuring assets
Internal fit and core rigidities (hard to break out of virtuous cycle)
• firm develops strategic resources and/or capabilities that increase profit • firms invests in resources and complimentary assets that increase viability of firm • "fitness" between activities of the firm increases, increasing efficiency • but... tightly fit systems are harder to change, making firms unresponsive to new opportunities and threats • process focus on efficiency drives out innovation
Government drivers
• free trade • similar technical standards • similar regulations • similar taxes
Small sample effects
• generalizing successes is challenging with little data • managers typically over sample success and under sample failure
Diversification discounts
• historically, lower performance than related ('diversification discount') • it makes it harder for investors to evaluate stocks and therefore to buy, hold, & sell them intelligently • investors can diversify cheaply on their own * for these reason, shareholders often prefer that excess cash flows be invested in related business, or else returned in the form of dividends or share repurchases
Organizational architecture: informal organization
• implicit, assumed, unwritten aspects of the organization • norms... dress, working late, conflict resolution • values • communication and influence patterns • climate... collaborative, teamwork, standards • core beliefs... often unstated, taken for granted • power/politics • key roles (secretary of the CEO)
Vertical scope
• important theory in the strategy field: Transaction Cost Economies (TCE) - theory of why firms exist - explanation for why some activities are organized inside a firm and some in the market - activities/businesses are located inside a firm when there is a high cost of market transaction • industry value chains
Pitfalls of alliances
• lack of trust • opportunistic behavior • inadequate contracts (can be difficult to write contracts for potential synergies) • failure to utilize the complementary resources • misrepresenting competencies • alliance-specific investments
What contributes to industry globalization potential?
• market drivers • government drivers • competitive drivers • cost drivers
Culture will influence organizational outcomes
• mission statement = top-down statement of organizational purpose • "bottom-up" perspective on purpose exists in widely held beliefs and assumptions of employees • this bottom-up perspective can affect ability for organization to engage in change
Divisional structure
• organized around products, projects, or markets • each division includes its own functional specialists typically organized into departments • divisions are relatively autonomous and consist of products and services that are different from those of other divisions • divison executives help determine product-market and financial objectives
Related diversification: Market Power Logic
• other ways of achieving market power - pooled negotiation power - vertical integration • government regulation may restrict this power
Assessing effective strategy and strategy implementation
• performance gap - performance falls short of goals • opportunity gap - concern that the firm is not effectively responding to changes in the environment that might create opportunities
International product life cycles
• products go through a "life cycle"; introduction, growth, maturation, decline • product are frequently introduced for a market opportunity in the local area/home market • firms expands internationally following a blueprint developed in home country • international expansion is incremental, beginning with most similar countries first • most mature products are introduced first
Pooled negotiation power
• similar businesses working together can have stronger bargaining position relative to: - suppliers - customers - competitors • abuse of bargaining power may affect relationships with customers, suppliers and competitors
Market drivers
• similar customer needs and tastes • global customers in several countries • similar distribution channels • transferable marketing know-how
Maturation & decline
• standardization • less uncertainty as to optimal location, scale, or price • normalization of designs, inputs, and processes • increased price-elasticity of demand
Relatedness doesn't guarantee success because..
• stock market reaction toward acquiring firms • overpayment in acquisitions • absence of synergies • coordination costs of synergies
Congruence model
• strategy implementation required CONGRUENCE between strategy and the components of the organization's architecture • congruence = the degree to which the needs, demands, goals, objectives, and/or structures of one component are consistent w/ those of the other * the greater the congruence (fit) between components, the more effective the organization will be
Economies of scope: leveraging core competencies - which businesses?
• to answer this question, firms should have a clear understanding of which capabilities that consider TRULY CORE • then they can ask: "are there other industries where we could use the same capabilities to obtain competitive advantage?"
Introduction & growth
• unstandardized product • hard to determine optimal location, scale, or price • low price-elasticity of demand
Related diversification
• value creation through a 'Market Power' logic • value creation through an 'Economics of Scope' logic - sharing activities - transferring/leveraging core competencies
What is the adoption rate of the new tech? look for:
•"S-Curve" adoption of new tech. •new ecosystem challenges for new tech.
Determinants of national advantage
•FACTORS OF PRODUCTION •DEMAND CONDITIONS •RELATED AND SUPPORTING INDUSTRIES •FIRM STRATEGY, STRUCTURE, & RIVALRY
Assessing institutional voids
•POLITICAL AND SOCIAL SYSTEM •OPENNESS/RESTRICTIONS ON FDI •PRODUCT MARKETS •LABOR MARKETS •CAPITAL MARKETS
