Chapter 3 part 4 (5 Forms of International Business Activity)

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International alliances and joint ventures

-Are long-term partnership between two or more company to jointly develop, produce or sell products. To reach the global marketplace. -Which two or more firms join together to create a new business entity that illegally separate and distinct from it's parents.

5 Forms of International Business Activity

-Importing and Exporting -International Licensing -International Franchising -International alliances and joint ventures -Foreign direct investment

Multidomestic strategy

A decentralized approach to international expansion in which a company creates highly independent operating units in each new country

Global strategy

A highly centralized approach to international expansion, with headquarters in the home country making all major decisions

Transnational strategy

A hybrid approach that attempts to reap the benefits of international scale while being responsive to local market dynamics

International Licensing

Agreement to produce and market another company's product in exchange for a royalty or fee

Multinational Corporations (MNCs)

Companies with operations in more than one country

Foreign direct investment

Investment of money by foreign companies in domestic business enterprises

International Franchising

Involves selling the right to use a business system. And to expand into foreign market.

Strategic Approaches to International Markets

Multidomestic strategy Global strategy Transnational strategy

Functional Strategies for international expansion

Products Customer support Promotion Pricing Staffing

Importing and Exporting

Purchasing goods or services from another country and bringing them into one's own country Selling and shipping goods or services to another country


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