Essay multinational business reading respond

1038 Words Nov 17th, 2013 5 Pages
1) What are the two types of pressures that firms competing in the global marketplace typically face? Pressures for cost reductions and Pressures to be locally responsive Under what types of conditions do these pressures arise?
Pressures for cost reduction:
Intense in industries of standardized, commodity type product that serve universal needs
Meaningful differentiation on non-price factors is difficult
Major competitors are based in low-cost locations
Consumers are powerful and face low switching costs
Liberalization of world trade and investment environment
Pressures for local responsiveness:
Differences in consumer tastes and preferences
Differences in infrastructure and traditional
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(Bartlett and Ghoshal) Strategy effective if firm faces strong pressures for local responsiveness and strong pressures for cost reductions
Global learning is critical to meet competitive demands from Valuable skills can develop in any of the firm’s worldwide operations and Transfer of knowledge from foreign subsidiary to home country, to other foreign subsidiaries
3) a) Prior to 1997, Diebold manufactured its ATM machines in the United States and sold them internationally via distribution agreements, first with Philips NV and then with IBM. Why do you think Diebold chose this mode of expanding internationally? Diebold was not really confidence about the foreign market and wanted to reduce the risk via distribution agreements.
Which of the four strategies did Diebold pursue in this beginning phase? International Strategy
What were the advantages and disadvantages of this arrangement? Disadvantage: Pressure for cost and local responsiveness are low, so the customization of product offering and market strategy were limited. Advantage: centralize product at home, create value by transferring valuable core.
b) What prompted Diebold to change its international expansion strategy in 1997 and
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