COMMERCE 4SA3 Lecture Notes - Lecture 3: Experience Curve Effects, International Business, Mixed Economy
16 Nov 2017
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International business strategy globalization and multi domesticity. Best worldwide regard of where they are from. Try to achieve max. local responsiveness by customizing product offering and market strategy to match diff national conditions. International strategy way firms make choices about acquiring and using scarce resources to achieve international objectives: globalization, multi-domestic. Advantage of early entry: first mover advantage, build sales volume, move down experience curve and achieve cost advantage, create switching costs. Strategic factors to entry modes: cultural environment, political/legal environment, market size, production and shipping costs. Host country problems with fdi: drives out local competitors can pre(cid:448)e(cid:374)t the de(cid:448)elop(cid:373)e(cid:374)t of (cid:862)lo(cid:272)al(cid:863) competitors, parts imported for assembly hurt trade balance, can affect sovereignty and national defense. Strategic decisions made elsewhere with best interests of other country in mind: changes local culture by changing daily habits, exposure to mnc advertising, business practices. Home country fdi benefits: creates demand for exports. Increase knowledge from operating in a foreign environment.
