Chapter 1 Expanding abroad: Motivations, means, and mentalities True/False 1. The largest MNEs are equivalent in their economic importance to less developed economies such as Tanzania, Estonia or Sri Lanka. Answer: False (Sales of the largest MNEs exceed the GDPs of less developed countries.) Difficulty: Easy Page: 4 and Table 1-1 on page 3 Topic: MNE scope and influence 2. The process of internationalization followed by most firms is usually well-thought out in advance and typically builds on a combination of rational analysis, planning and implementation. Answer: False (It is more likely a combination of rational analysis, opportunism, and luck. In regards to opportunism, several studies have found that most firms begin exporting …show more content…
a. low commitment, low control b. low commitment, moderate control c. low commitment, high control d. moderate commitment, moderate control Answer: d (a, b, and c would describe indirect export, franchise, and contract manufacturing foreign modes of entry respectively.) Difficulty: Moderate Page: 10 (figure 1-2) Topic: Foreign entry mode 12. Pashpa Co. is a new manufacturer of home appliances. Pashpa wants to go international. Some of the traditional motivations for pursuing internationalization include: a. securing key supplies, seeking new markets, and raising global scanning and learning capabilities b. securing key supplies, seeking new markets, and improving competitive positioning c. securing key supplies, seeking new markets and accessing low-cost factors of production d. securing key supplies, improving competitive positioning, and accessing low-cost factors of production Answer: c (a, b, and d are incorrect because ‘raising global scanning and learning capabilities’ and ‘improving competitive positioning’ are not traditional motivations for pursuing internationalization, they are emerging motivations.) Difficulty: Moderate Page: 4-6 Topic: Motivations for internationalization 13. One motivation behind internationalization is to sustain the firm’s competitive position. To pursue a sustainable competitive position relative to its rivals in the athletic clothing industry, Nike attempts to: a. preempt markets, capture
Throughout the course of this class, I have been back and forth with this question. This course has shed light on the good, the bad, and the ugly of globalization. So as this course comes to an end and my opinion has changed multiple times over the weeks, I feel I still stand at a fork in the road when it comes to globalization.
Globalization refers to the development of an integrated world economy, exchange of cultural views, thoughts, and products (Wikipedia, 2013). Pologeorgis (2012) states that, essentially globalization began with the exploration and settlement of new lands. Communication and transportation advances have aided in this process.
Like other large corporations, Nike looked to expand their operations outside North America. Many companies do this because of the law and wage demands of the United States making overseas operations very appealing. Employment laws are scarce and labor is cheap in most third world countries and can be easily become targeted by giant corporations such as Nike.
16. Which of the following can induce a firm to expand into the international arena?
Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with a(n) ____ structure.
The internationalisation process of the firm has been a subject, which has been motive of study for a number of
1. High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy: A. global B. multidomestic C. transnational D. overall cost leadership 2. Foreign direct investment includes the following form of entry strategy: A. licensing B. franchising C. joint ventures D. exporting 3. According to Michael Porter, firms that have experienced intense domestic competition are A. unlikely to have the time or resources to compete abroad. B. most likely to design strategies aimed primarily at the domestic market. C. more likely to design strategies and structures that allow them to successfully compete abroad. D. more likely to demand protection from their governments.
produce products and sold to multi country. The primary purpose of business internationalise is seek a wider range of competitive advantages and integrate resource in order to profits maximization. The Internationalization motives include three
2. How would leveraging capabilities with respect to the Indonesian market differ between an Australian/New Zealand producer of computer software and an Australian/New Zealand manufacturer of automotive parts?
As discussed in Chapter 21 of our text book, any company that is looking to expand globally must make five key decisions. A firm must decide if: a) they really want to expand to the international market; b) they
Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.
Subject : Appraisal of a MNE's recent market entry (2007-2010) ( 1. Firm Motivations for internationalization 2. Entry Strategy 3. Corporate Strategy)
Well known companies like Nike, Microsoft, Sony, Shell Group are just some of the big companies that went global and expanded their trading around the world, they are large businesses that operate internationally in many countries. Development of worldwide integration urges companies to reach out international markets and interact with foreign customers. Businesses focus on fulfilling the demand of the market by its products or services, besides their target is increasing profit, in order achieve these goals they favor to expand their work in a foreign market. Other reasons to internationalize their business may be to become
Reasons why corporations like PepsiCo. need to globalize their operations include a need for competitive advantage against rivaling companies, increase their economies of scale to lower their production and distribution costs in moving products into new and existing markets, entering new markets to increase brand image and brand loyalty, and to increase net earnings which can then be distributed as dividends for their stockholders.
Nike uses the internationalization process through Uppsala model, as firm progressively increased their activities in foreign markets. Firm gains experienced from the domestic market before they headed towards the foreign markets. The firm started from their manufacturing country covering the cultures and geographic elements then gaining enough progress they moved towards the foreign market similar they do in present day before