Multinational
Strategic
Planning
Exam Preparation
Yen Nguyen
,Multinational Strategic Planning – Exam Preparaton Yen Nguyen
TABLE OF CONTENTS
CHAPTER 1: CONCEPTUAL FOUNDATION OF INTERNATIONAL BUSINESS STRATEGY ........... 1
CHAPTER 2: CORE COMPETENCIES - Hamel & Prahalad ...................................................... 5
CHAPTER 3: Porter’s diamond ............................................................................................ 6
CHAPTER 4: DISTANCE COMPONENTS (CAGE framework) - Ghemawat .............................. 8
CHAPTER 5: SUBSIDIARY ROLES – Bartlett & Ghoshal ....................................................... 10
CHAPTER 6: INTERNATIONALIZATION OF R&D FUNCTION - Kuemmerle............................ 14
CHAPTER 7: FACTORY ROLES - Ferdows ............................................................................ 17
CHAPTER 8: ECONOMIC EXPOSURE - Lessard & Lightstone ............................................... 19
CHAPTER 9: INTERNATIONAL MARKETING - Levitt ............................................................ 20
CHAPTER 10: EXPATRIATION - Black & Gregersen ............................................................ 22
CHAPTER 11: INTERNATIONAL DISTRIBUTORS - Arnold .................................................... 24
CHAPTER 12: STRATEGIC ALLIANCE PARTNERS - Hamel, Doz & Prahalad .......................... 25
CHAPTER 13: MERGER AND ACQUISITION - Ghemawat & Ghadar .................................... 28
CHAPTER 14: INSTITUTIONAL VOIDS - Khanna et al .......................................................... 30
CHAPTER 15: INTERNATIONALIZATION STRATEGIES OF EMNE - Ghemawat & Hout .......... 31
Good luck to your exam!
,Multinational Strategic Planning – Exam Preparaton Yen Nguyen
CHAPTER 1: CONCEPTUAL FOUNDATION OF INTERNATIONAL BUSINESS STRATEGY
Four motivations for foreign expansion?
- Natural resource seeking: cheap labor, cheap energy, government subsidy.
- Market seeking: downstream market, go abroad to sell products to foreign
buyers.
- Strategic source seeking: link to strategic expansion via joint venture and M&A.
- Efficiency seeking: valid multination firm, restructure firm after movement of free
trade in investment.
Seven concepts of unifying framework?
1. Internationally transferable (Non-location
bound) firm-specific advantages (FSAs): can be
embodied in the product. Codifiable knowledge
=> cheaply transferred abroad but easily
imitated by other firms. Tacit knowledge =>
expensive and time-consuming, but difficult to
imitate.
Ø Stand-alone resources link to patent
knowledge, brand name.
Ø Routines: highly effective in international
markets
Ø Internationally recombination capability: ability to adjust to new circumstances.
2. Non-transferable (Location bound) FSAs: 4 main types:
Ø Stand-alone resources link to location advantages, such as domestic networks.
Ø Local marketing knowledge and reputational resources, such as brand names
Ø Routines: highly effective in the domestic market
Ø Domestic recombination capability.
3. Location advantages (LAs): Some firms are successful due to them taking
advantage of a favorable location. This is instrumental to FSAs.
4. Investment in – and value creation through - resource recombination: MNE can
recombine resource finding in foreign markets with existing resources.
5. Complementary resources: Due to differences in culture and economics, MNE
needs complementary resources of external factors, such as technology providers,
licensees, and joint venture partners.
6. Bounded rationality: reflects the scarcity of mind. This is the imperfect
assessment of a present or future situation, thereby leading to incorrect beliefs.
7. Bounded reliability: reflects the scarcity of effort to make good on open-ended
promises. This is the imperfect effort toward pre-specified goal achievement,
thereby leading to incomplete fulfillment of promises.
You can do it! 1
, Multinational Strategic Planning – Exam Preparaton Yen Nguyen
Four MNE archetypes?
Centralized exporter: Standardized products manufactured at home embody the
firm’s FSAs and make the exporting firm successful in international market. Direct link
between home country NLB FSAs, and the host country’s LAs (i.e., the foreign
market), no development of LB FSAs in the host country, or NLB FSAs to the host
country. Ex. Motion Picture Studios
International projector: NLB FSAs in the home country are transferred to subsidiaries
in host countries. The international projector MNE seeks international expansion by
projecting its home country's success recipes abroad. No development of LB FSAs in
the host country. Ex: Disney
You can do it! 2
Strategic
Planning
Exam Preparation
Yen Nguyen
,Multinational Strategic Planning – Exam Preparaton Yen Nguyen
TABLE OF CONTENTS
CHAPTER 1: CONCEPTUAL FOUNDATION OF INTERNATIONAL BUSINESS STRATEGY ........... 1
CHAPTER 2: CORE COMPETENCIES - Hamel & Prahalad ...................................................... 5
CHAPTER 3: Porter’s diamond ............................................................................................ 6
CHAPTER 4: DISTANCE COMPONENTS (CAGE framework) - Ghemawat .............................. 8
CHAPTER 5: SUBSIDIARY ROLES – Bartlett & Ghoshal ....................................................... 10
CHAPTER 6: INTERNATIONALIZATION OF R&D FUNCTION - Kuemmerle............................ 14
CHAPTER 7: FACTORY ROLES - Ferdows ............................................................................ 17
CHAPTER 8: ECONOMIC EXPOSURE - Lessard & Lightstone ............................................... 19
CHAPTER 9: INTERNATIONAL MARKETING - Levitt ............................................................ 20
CHAPTER 10: EXPATRIATION - Black & Gregersen ............................................................ 22
CHAPTER 11: INTERNATIONAL DISTRIBUTORS - Arnold .................................................... 24
CHAPTER 12: STRATEGIC ALLIANCE PARTNERS - Hamel, Doz & Prahalad .......................... 25
CHAPTER 13: MERGER AND ACQUISITION - Ghemawat & Ghadar .................................... 28
CHAPTER 14: INSTITUTIONAL VOIDS - Khanna et al .......................................................... 30
CHAPTER 15: INTERNATIONALIZATION STRATEGIES OF EMNE - Ghemawat & Hout .......... 31
Good luck to your exam!
,Multinational Strategic Planning – Exam Preparaton Yen Nguyen
CHAPTER 1: CONCEPTUAL FOUNDATION OF INTERNATIONAL BUSINESS STRATEGY
Four motivations for foreign expansion?
- Natural resource seeking: cheap labor, cheap energy, government subsidy.
- Market seeking: downstream market, go abroad to sell products to foreign
buyers.
- Strategic source seeking: link to strategic expansion via joint venture and M&A.
- Efficiency seeking: valid multination firm, restructure firm after movement of free
trade in investment.
Seven concepts of unifying framework?
1. Internationally transferable (Non-location
bound) firm-specific advantages (FSAs): can be
embodied in the product. Codifiable knowledge
=> cheaply transferred abroad but easily
imitated by other firms. Tacit knowledge =>
expensive and time-consuming, but difficult to
imitate.
Ø Stand-alone resources link to patent
knowledge, brand name.
Ø Routines: highly effective in international
markets
Ø Internationally recombination capability: ability to adjust to new circumstances.
2. Non-transferable (Location bound) FSAs: 4 main types:
Ø Stand-alone resources link to location advantages, such as domestic networks.
Ø Local marketing knowledge and reputational resources, such as brand names
Ø Routines: highly effective in the domestic market
Ø Domestic recombination capability.
3. Location advantages (LAs): Some firms are successful due to them taking
advantage of a favorable location. This is instrumental to FSAs.
4. Investment in – and value creation through - resource recombination: MNE can
recombine resource finding in foreign markets with existing resources.
5. Complementary resources: Due to differences in culture and economics, MNE
needs complementary resources of external factors, such as technology providers,
licensees, and joint venture partners.
6. Bounded rationality: reflects the scarcity of mind. This is the imperfect
assessment of a present or future situation, thereby leading to incorrect beliefs.
7. Bounded reliability: reflects the scarcity of effort to make good on open-ended
promises. This is the imperfect effort toward pre-specified goal achievement,
thereby leading to incomplete fulfillment of promises.
You can do it! 1
, Multinational Strategic Planning – Exam Preparaton Yen Nguyen
Four MNE archetypes?
Centralized exporter: Standardized products manufactured at home embody the
firm’s FSAs and make the exporting firm successful in international market. Direct link
between home country NLB FSAs, and the host country’s LAs (i.e., the foreign
market), no development of LB FSAs in the host country, or NLB FSAs to the host
country. Ex. Motion Picture Studios
International projector: NLB FSAs in the home country are transferred to subsidiaries
in host countries. The international projector MNE seeks international expansion by
projecting its home country's success recipes abroad. No development of LB FSAs in
the host country. Ex: Disney
You can do it! 2
