BU398 - Final Review Q&A
Motivations for global expansion - =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 - =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 - =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 - =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 - =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
Motivations for global expansion - =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 - =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 - =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 - =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 - =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
