BU398 - Final Review Exam With
Accurate Solutions
Motivations for global expansion - ANSWER Economies of Scale:
- For some companies, domestic markets no longer provide the high levels of sales
needed to achieve volume required for economies of scale
Economies of Scope:
- refers to the number and variety of products and services a company provides, as well
as the number and variety of regions, countries, and markets it serves
Low-cost production factors:
- Obtain raw materials and other resources at the lowest possible cost
Issues with Globalisation - ANSWER Job losses, environmental issues and working
conditions
- Outsourced labour can lead to reduced wages and unemployment domestically
- Imposing "western style capitalism" on developing countries without regard for
negative social impacts
Stages of International Development - ANSWER 1. Domestic
Strategic orientation: domestically oriented
Stage: initial foreign involvement
Structure: domestic structure plus export department
Market potential:
2. International
Strategic orientation: export-oriented, multi-domestic
Stage: competitive positioning
Structure: domestic structure plus international division
Market potential: large, multi-domestic
3. Multinational
, Strategic orientation: domestically
Stage:
Structure:
Market potential:
4. Global
Strategic orientation: domestically
Stage:
Structure:
Market potential:
International development through international strategic alliances - ANSWER Licensing
/ cross-licensing to support industry-wide innovation, marketing and offset high fixed
costs of research and distribution
Joint venture: separate entity created by 2 or more active firms as sponsors
- Popular approach to sharing development and production costs, while penetrating
new markets
- May be with either customers or competitors
- Companies often seek joint ventures to take advantage of a partner's knowledge of
local markets, achieve cost savings, share strengths, or distribute new products and
services through another country's distribution channels
Consortia: groups of independent companies (including customers, suppliers and
competitors) that join together to share skills, resources, costs and access to one
another's markets
- global virtual organization:
Designing Structure to Fit Global Strategy - ANSWER Global standardization vs. national
responsiveness: whether each global affiliate should act autonomously or weather
activities should be standardized across countries
Globalization strategy: product design, manufacturing and marketing are standardized
throughout the world
- ex. Coke (only adjusts ads/marketing)
- Services are less suitable due to customs/habits, etc.
Multi-domestic Strategy: competition in each country is handled independently of
Accurate Solutions
Motivations for global expansion - ANSWER Economies of Scale:
- For some companies, domestic markets no longer provide the high levels of sales
needed to achieve volume required for economies of scale
Economies of Scope:
- refers to the number and variety of products and services a company provides, as well
as the number and variety of regions, countries, and markets it serves
Low-cost production factors:
- Obtain raw materials and other resources at the lowest possible cost
Issues with Globalisation - ANSWER Job losses, environmental issues and working
conditions
- Outsourced labour can lead to reduced wages and unemployment domestically
- Imposing "western style capitalism" on developing countries without regard for
negative social impacts
Stages of International Development - ANSWER 1. Domestic
Strategic orientation: domestically oriented
Stage: initial foreign involvement
Structure: domestic structure plus export department
Market potential:
2. International
Strategic orientation: export-oriented, multi-domestic
Stage: competitive positioning
Structure: domestic structure plus international division
Market potential: large, multi-domestic
3. Multinational
, Strategic orientation: domestically
Stage:
Structure:
Market potential:
4. Global
Strategic orientation: domestically
Stage:
Structure:
Market potential:
International development through international strategic alliances - ANSWER Licensing
/ cross-licensing to support industry-wide innovation, marketing and offset high fixed
costs of research and distribution
Joint venture: separate entity created by 2 or more active firms as sponsors
- Popular approach to sharing development and production costs, while penetrating
new markets
- May be with either customers or competitors
- Companies often seek joint ventures to take advantage of a partner's knowledge of
local markets, achieve cost savings, share strengths, or distribute new products and
services through another country's distribution channels
Consortia: groups of independent companies (including customers, suppliers and
competitors) that join together to share skills, resources, costs and access to one
another's markets
- global virtual organization:
Designing Structure to Fit Global Strategy - ANSWER Global standardization vs. national
responsiveness: whether each global affiliate should act autonomously or weather
activities should be standardized across countries
Globalization strategy: product design, manufacturing and marketing are standardized
throughout the world
- ex. Coke (only adjusts ads/marketing)
- Services are less suitable due to customs/habits, etc.
Multi-domestic Strategy: competition in each country is handled independently of
