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MANA 4322 Ch. 7 Part 1
Terms in this set (23)
What is globalization?
The increase in international exchange, including trade in goods and services as well as exchange of money, information, ideas, and information. The growing similarity of laws, rules, norms, values, and ideas across countries.
What are things related to the global economy?
1- The economies of East Asia have attained rapid growth
2- Income in Latin America grew by only 6 percent in the past two decades
3- Average incomes in sub- Saharan Africa and the old Eastern European bloc have actually declined
What are the main points of Porters determinants of national competitive advantage?
1- Firm strategy, structure and rivalry (most important)
2- Factor conditions
3- Demand conditions
4- Related and supporting industries
What are factor conditions?
1- Nations positions in factors of production
2- To achieve competitive advantage, factors of production must be created
What are a nations positions in factors of production?
1- Skilled labor (#1 thing that makes a country innovative)
To achieve competitive advantage, factors of production must be?
1- Industry specific
2- Firm specific
3- Pool of resources at a firm's or country's disposal is less important than the speed and efficiency with which the resources are deployed
What are demand conditions?
1- Nature of home-market demand
2- Demands that consumers place on an industry for goods and services
What are nature of home market demand?
1- Industry product
2- Industry service
What are demands that consumers place on an industry for goods and services?
1- Demanding consumers push firms to move ahead of companies from other nations
2- Demanding consumers drive firms in a country to
a) Meet high standards
b) Upgrade existing products and services
c) Create innovative products and services
What are related and supporting industries?
1- Presence or absence in the nation of internationally competitive
2- Enable firms to manage inputs more effectively
3- Allow joint efforts among firms
4- Create the probability that new entrants will enter the market
How do firms manage inputs more effectively?
1- Strong supplier base adds efficiency to downstream activities (e.g., marketing, sales, service)
2- Competitive supplier base lets a firm obtain inputs using cost-effective, timely methods
Rivalry is intense in nations with conditions of?
1- Strong consumer demand
2- Strong supplier bases
3- High new entrant potential from related industries
What is firm strategy, structure, and rivalry?
1- Conditions in the nation governing how companies are created, organized and managed, and the nature of domestic rivalry
2- Domestic rivalry forces firms to look beyond national borders for new markets
Competitive rivalry increases the efficiency with which firms?
1- Develop within the home country
2- Market within the home country
3- Distribute products and services within the home country
Domestic rivalry provides a strong impetus for firms to?
2- Find new sources of competitive advantage
What are A Company's Motivation for International Expansion?
1- Increase the size of potential markets
2- Attain economies of scale
3- Reduce the costs of R&D as well as operating costs
4- Extend the life cycle of a product
5- Optimize the physical location for every activity in its value chain
a) Performance enhancement
b) Cost reduction
c) Risk reduction
What is political and economic risk?
1- Social unrest
2- Military turmoil
4- Violent conflicts and terrorism
5- Laws and their enforcement
What is the corruption perception index?
1- The Transparency International Corruption Perceptions Index (CPI) reveals the most corrupt countries in the world:.
2- Corruption: "Use of public office for private gains."
3- Scores range from 10(squeaky clean) to 0 (highly corrupt)
What are the potential risks of international expansion?
1- Currency risks
2- Management risks
What is currency risk?
Currency exchange fluctuations
What are management risks?
4- Income levels
5- Customer preferences
6- Distribution system
MNC's Strategic and Organizational Task: Developing Multiple Capabilities, What is the Y axis?
1- Driven by scale and technology
2- Reinforced by global competition
3- Need for global coordination, integration
MNC's Strategic and Organizational Task: Developing Multiple Capabilities, What is the X axis?
1- Driven by scope and markets
2- Reinforced by governments
3- Need for national differentiation, responsiveness
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