Philips vs Haier: Comparative Case Studies

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PHLIPS AND HAIER: COMPARATIVE CASE STUDIES Strategic Management II Lu Lu (6500354) Handed ON: 11th May, 2009 Word Counted (Excluding charts, references): 2989 PHLIPS AND HAIER: COMPARATIVE CASE STUDIES TABLE OF CONTENT ABSTRACT .......................................................................................................... 02 INTRODUCTION ..................................................................................................... 02 LITERATURE REVIEW ...................................................................................... 03 CASE STUDIES: PHILIPS Background .................................................................................................... 05 SWOT…show more content…
The paper will be divided into four sections: section one will briefly review the theories of FDI; section two will discuss the cases of both firms‘ strategic changes; section three will discuss the dynamics of strategies in both firms to demonstrate their utilisation in obtain and sustain competitive advantages; in last section, managerial implications will be presented. LITERATURE REVIEW: FDI THEORY A number of literatures have been developed to analyse the motivations behind MNEs to invest abroad, as summarised in Table 1. Table 1: Early theoretical framework for FDI Theory Main arguments  Ownership Advantage Theory (Stephen Hymer, 1960)     1) Product Life Cycle Theory (Vernon, 1966) 2) 3) Criticisms Firms which invest abroad must have some specific ownership advantages outweigh the disadvantages in offshore markets. Ownership advantages include: access to raw materials; economies of scale; intangible assets such as brands, patents, management, etc. Disadvantages include: unfamiliar with offshore market; cost of searching information, negotiation and learning, etc. Technological advantages of firm lead to competitive advantages, and thus give it an edge in exports.

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