chapter 7,8

• Internalization factors


  Not related to Transaction Costs
• Knowledge Transfer and Learning


  • Insight from dealing directly with suppliers/customers
• Coordination and Integration


  • Potential better integration with partners
• Pegged


  • Allows more flexibility to respond to changing conditions
  • Although achieving some of the benefits, it gives autonomy in times of need
  • Peg can be adjusted every few years
• Pegged


  • Danish Krona
• Fixed


  • Credibility "unambiguous commitment" which can help attract foreign investment and promote economic stability
  • Discipline: "impose discipline," limiting their ability to engage in currency depreciation/inflationary measures
• Fixed


  • Bulgarian Lev versus Euro
• Tariffs on Steel Imports produced unintended consequences, adding to high input costs in related industries (e.g., auto industry, mobile manufacturing, and construction). They also produced retaliatory tariffs in other industries.
• Tariffs/Europe to protect traditional textile businesses from imports from China/Bangladesh/Vietnam.
• European Union's Common Agricultural Policy leads to overproduction (milk) and inefficiencies (more expensive produce). It helps large agribusinesses and not small farmers and consumers, contributing to income inequality and market inefficiencies. European farmers are not closer to being able to compete with African farmers.
• There is an article that allows measures for the protection of their essential security interests. Article XXI - "security exception."
• Strategy


  • Determining goals/vision
  • Long-term plan of action
  • Allocation of resources to achieve those goals
• Strategy


  An integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage
• Strategy


  The determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals
• Strategy


  A pattern in a stream of decisions to emphasize that strategy is about the decisions that shape the actions of an organization over time
• Strategy


  The creation of a unique and valuable position, involving a different set of activities, suggesting that strategy is about combining activities to create a unique position in the marketplace
• Strategy


  The direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration of resources within a challenging environment
• Strategy is not a Goal or Vision, a Plan, a Catch-all Term, or Operational Effectiveness
• Unique Value Proposition


  A distinct way of offering value to customers that sets a firm apart from its competitors
• Operational Effectiveness


  Performing similar activities better than rivals perform them
• Strategic Positioning


  Performing different activities from rivals or performing similar activities in different ways
• Value Chain


  Disaggregating the firm (and its product/service offerings) into strategically relevant activities to better understand sources of value
• Value Chain vs Supply Chain


  Value Chain emphasizes value creation and optimization of activities to achieve a competitive advantage, while Supply Chain focuses on the efficient management of resources and logistics to meet customer demands
• Primary and Secondary Activities


  • Primary activities are directly involved in the creation of the product, its sale, transfer to the buyer, and after-sales assistance
  • Support activities provide the background necessary for the effectiveness and efficiency of the firm
• International Success


  • Depends on the competitiveness of their value proposition or offering to international customers
  • Depends on core competencies (VRIO), skills within the company that competitors cannot easily match or imitate
• Economies of Scale


  Reducing unit costs by producing large volumes of a product
• Location Economies


  Dispersing value creation activities to the most efficient and effective locations
• Experience Curve


  Systematic reductions in production costs over a product's lifetime
• Scope Economies


  Use of existing resources or competences for new products, markets, or services
• Formal Institutions


  Include political, legal, and economic systems
• Informal Institutions


  Include culture, social norms, ethics, and religion
• PESTEL


  Systematically assesses the macro-environmental factors that can impact an organization's performance
• SWOT


  Summarizes conclusions from internal/external analysis
• MINIMAX


  An easy way of performing a SWOT and deriving some provisional views of strategy
• CAGE Framework


  Assesses the relative differences or distances between two countries across Culture, Administration, Geography, and Economics
• AAA Model


  Three generic approaches to international value creation: Adaptation, Aggregation, Arbitrage
• Cost Reduction/Global Integration


  Pressures driven by the need for global efficiency and consistency, often to leverage economies of scale and scope
• Local Responsiveness


  Pressures arising from the need to adapt products and services to fit the local market preferences, consumer behaviors, regulations, and competitive conditions
• Home Replication Strategy


  The firm views international business as separate from, and secondary to, its domestic business
• Multidomestic Strategy


  Firms consider each country or region as a stand-alone local market worthy in itself of significant adaptation and attention