Question
Read the following Questions and Answers and write brief summary to the answers: What incentives influence firms to use international strategies? There are several incentives
Read the following Questions and Answers and write brief summary to the answers:
What incentives influence firms to use international strategies?
There are several incentives used to entice companies to use international strategies. The incentives are:
(1) Ability to extend product life cycle,
(2) Easier access to scarce resources and raw materials,
(3) More opportunity to integrate into global operations,
(4) More opportunities to use the evolving technology,
(5) Extended access to more consumers in emerging economies.
What are the three basic benefits firms can achieve by successfully using an international strategy?
(1) Strategic and lower cost location advantages allow a company to manufacture and assemble the components in a country where it has large market share for the product or where the labor is cheaply available in abundant quantities
(2) Larger market access allows the firm to market and sell its products and services to large number of customers
(3) International strategy allows a firm to produce in large volumes so that the per unit cost for the product goes down, thereby allowing the company to have a large market share.
What four factors are determinants of national advantage and serve as a basis for international business-level strategies?
There are four factors that can determine the national advantage from which the basis of international business-level strategies can be honed. These factors are:
(1) Factors of production,
(2) Demand conditions,
(3) Related and supporting industries,
(4) Firm strategy, structure, and rivalry.
What are some global environmental trends affecting the choice of international strategies, particularly international corporate-level strategies?
Liability of foreignness and regionalization are the two global environmental trends that are affecting the international strategy that a company will use at the international corporate strategy level.
What five entry modes do firms consider as paths to use to enter international markets What is the typical sequence in which firms use these entry modes?
The five modes to enter an international market are:
(1) Exports,
(2) Licenses,
(3) Strategic alliances,
(4) Acquisition, and
(5) Greenfield venture.
The typical sequence that a company would use to enter a new market based on cost and risk is export, licensing, strategic alliances or acquisitions, Greenfield venture.
What are political risks and what are economic risks? How should firms approach dealing with these risks?
Economic risks - are the basic weaknesses that are inherent to each country or region's economy that can affect the overall effectiveness of the global initiative. A company should select a country that protects its intellectual property on a high level It should also look for countries that have a high level of national security as well.
Political risks - are those where the operations could be disrupted by political forces and events such as military engagements and civil wars. The best way to handle the political risks is to do a political risk evaluation so the company can be aware of what to expect and how to work around in certain situations.
What are the strategic competitiveness outcomes firms can reach through international strategies, and particularly through an international diversification strategy?
Above average returns as well as enhanced innovation are the outcomes that a company can hope to achieve through international strategies and diversification. International diversification also helps in achieving the economies of scope and allows for learning, which helps in improving the returns. International diversification strategy helps a firm to effectively implement and manage the firm's international operations.
What are two important issues that can potentially affect a firm’s ability to successfully use international strategies?
Size and complexity are two areas of interest that can affect a company's ability to navigate international strategies.
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