MNE Topic 3

Question 1

why go international
how achieve this

Answer 1

build a competitive strategy
undertaking different strategic action

Question 2

strategic intent goals

Answer 2

1. global scale efficiency (scale & scope)
2. multinational flexibility/responsiveness (adaptability)
3. worldwide learning and innovation (R&D and idea sourcing)

• sometimes simultaneous sometimes contrasting

Question 3

3 means to achieve a competitive advantage

Answer 3

1. EOS
2. Economies of scope
3. National differences

Question 4

Economies of scale

Answer 4

cost adv obtained due to size

Question 5

Economies of scope

Answer 5

cost adv through sharing common certain resources/products

-common distribution channels
-global brand name
-pooling knowledge in different markets
-sharing R&D

Question 6

National differences

Answer 6

1. culture
2. tastes
3. behaviour
4. local comp
5. costs
6. currency stability

Question 7

Multinational flexibility

Answer 7

• diff market opps from env
• best one/attractive-> may change
• understanding & risk
  -risk = policy, economic perf, ER, labour, resources, preferences, comp

Question 8

worldwide innovation and learning

Answer 8

stimuli (trends) -> resources needed (capital/knowledge/tech)

Question 9

Strategic objectives

Answer 9

(WHAT)
1. achieve global scale efficiency
2. implement with locally responsive flexibility
3. develop cross border learning capabilities

Question 10

global scale efficiency

Answer 10

variation between value of output (revenue) over cost of factor

Question 11

Strategic means

Answer 11

(HOW)
1. develop and leverage EOS
2. Sense and respond to national differences
3. Recognise and capture scope economies

Question 12

MNE Environments

Answer 12

diversity of environments & capabilities
multiple learning opportunities = obj worldwide learning

Question 13

CAGE Distances

Answer 13

1. cultural
2. administrative
3. geographical
4. economic

• require time and inv management

Question 14

cultural distance

Answer 14

attribute of society from interactions
- values/norms/dispositions
- customs
- foods
- languages
- ethnicities
- religions
- lack of trust

e.g. Heineken crossing differences

Question 15

administrative distance

Answer 15

• legal framework (Law -> civil, common, religious, pluralistic)
• political structure
• currency convertibility/stability
• trade restrictions (regulatory/practice)
• judiciary
• human rights practice/speech freedom

Question 16

geographical distance

Answer 16

• physical distance
• lack land border
• time zones
• climate/disease env
• population density

Question 17

three economic distances

Answer 17

• GDP/PPP differences
• labour & other manufacturing costs
• financial/Human/infrastructure/knowledge

e.g. Google -> china and russia

Question 18

worth operating internationally?

Answer 18

• make difference to competitive performance of firm
• how operate internationally is aligned with and strengthen choice of how compete strategically

Question 19

integration/responsiveness matrix

Answer 19

global coordination and local adaption

1. global
2. transnational
3. international
4. multinational

Question 20

strategy

Answer 20

making choices (to do and not do)
align choices of how operate
behave with those strategic choices

Question 21

international strategy

Answer 21

Exploiting home country innovations abroad

Question 22

global strategy

Answer 22

develop global efficiency, via different means
achieve best cost and quality positions for products

Question 23

multinational strategy

Answer 23

Differentiate product and service responding to national differences in preference/ industry/gov regulations

Question 24

transnational strategy

Answer 24

Manage costs and revenue simultaneously

Efficiency and innovation = important

Innovation- arise in many parts of world

Question 25

concentration of resources for transnational

Answer 25

Concentrated at home - Core tech - Global account team Concentrated but not necessarily at home - World scale production plants (labour intense – lower wage)

Question 26

industry characteristics and strategic choices

Answer 26

integration- responsiveness framework

Question 27

limitations of the IR framework

Answer 27

1. strategy choice independent of industry context 2. strategy can vary over time 3. matrix org structures often lead to gridlock -old fashioned

Question 28

amazon integration responsiveness matrix

Answer 28

Question 29

is transnational possible

Answer 29

- matrix gridlock - flawed decision making -> primacy of home base thinking -> strength of voice = weight of argument - risk of losing control of operations in some countries

Question 30

transnational

Answer 30

pursuing simultaneously efficiencies (scope and scale), flexibility, learning globally integrated network -> managed through matrix structure business units x functions x geographical areas

Question 31

innovation

Answer 31

most important source of comp adv - learning from and in world - not all knowledge is in 1 place - knowledge valueless unless applied - cost of distance = falling rapidly - prospect for untapped knowledge sources globally - create knowledge through experimentation - connect and leverage knowledge sources sensing + mobilising + applying

Question 32

metanational

Answer 32

beyond transnational 1. develop flexibility 2. multiple innovation processes - local central, global 3. balance multiple perspectives

Question 33

how to develop flexibility - 4 ways

Answer 33

1. specialised roles 2. special teams 3. introduce boundary - spanning roles 4. disperse responsibilities (empower people to act)

Question 34

3As strategy

Answer 34

1. Aggregation 2. Arbitrage 3. Adaptation

Question 35

Aggregation

Answer 35

pursuit of increased scale to achieve greater efficiencies (sourcing) or effectiveness (brand recognition)

Question 36

arbitrage

Answer 36

pursuit of flexibility in sourcing and mkt access increase competitive adv (adjust balance of supplies from diff countries depending on exchange and logistics rates)

Question 37

adaptation

Answer 37

pursuit of insight and innovation from mats moving knowledge between mkts to apply elsewhere for comp adv

Question 38

AAA triangle

Answer 38

leaders - find which elements meet companies needs = prioritise - emphasis different As at different times of evolution - same industry can differ - one or 2 -> 3 is possible but challenge due to tensions/differences - org and strategy trade offs make hard to pursue multiple -> staffing/ operations/ marketing/leadership/metrics

Question 39

pursuing 1 or 2

Answer 39

- Ghemawat's argument differs in respect from Bartlett et al's view on transnational strategy