samenvatting_introduction_to_international_business.pdf Samenvatting Introduction to International Business
Rijksuniversiteit Groningen | International Business | Introduction to International Business
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INTRO TO IB KEY WORDS AND CONCEPTS
Conceptual Foundations of International Business Strategy 1. Internationally transferable FSAs . Tacit knowledge = personal knowledge MNE’s heritage=key routines developed by the firm since its inception. 4 archetypes of administrative heritage: • Centralized exporter=only exporting the standardized product, no activity in host country. • International projector=FSAs from ...view middle of the document...
Means combining existing resources with newly accessed resources. 5. Complementary resources of external actors. • External actors can provide the missing ingredients when going abroad. • These help to overcome the distance. 6. Bounded rationality (imperfect assessment). • Reflects on ‘scarcity of mind’. • The problem is the access to information. • If they have information, the problem is the capability to process complex information. 7. Bounded reliability (imperfect effort). Agents don’t always carry through on their expressed actions.
INTRO TO IB KEY WORDS AND CONCEPTS
Prahalad and Hamel’s Core Competencies Core Competencies = company’s most important FSA, its vital routines and recombination capabilities. A core competency should: - Be difficult for competitors to imitate . - Provide potential access to a wide variety of markets. - Make significant contribution to the perceived customer benefits. - Loss of the CC would have important negative impact on the firm’s performance. Strategic management=needed to develop a strategic architecture to allow this. Key Critique=Prahalad and Hamel do not include country factors in their analysis. They overestimate the role of strategic management and underestimate the role of (host) country location factors. Porter’s Diamond of National Competitiveness Idea: a company’s ability to compete abroad is based on a set of location advantages in its home country !when a company experiences a high level of pressure in the home country, it will push the firm to innovate and upgrade systematically. 4 key sets of country attributes are: 1. Factor conditions=most importantly created factor conditions such as skilled labor, scientific knowledge and infrastructure. Particularly valuable if they are specialized. 2. Demand conditions=the focus is not on market size alone but also on domestic buyer sophistication. When buyers are demanding, competitiveness increases. 3. Related and supporting industries=need for high quality suppliers. 4. Firm strategy, industry structure and rivalry=a competitive home based industry may help the firm in that industry become more internationally competitive. !the 4 variables + government + chance determine international competitiveness. Key Critique: FSAs are in Porter’s theory completely domestically determined. Porter places too much emphasis on the home country as level of analysis. Ghemawat’s Distance Theory Idea: the distance between two countries gives higher risks and cost to entering new markets. 1 basic categories of distance: 1. Cultural distance=results from differences in national cultural attributes such as language, religious beliefs, social norms and race. 2. Administrative/institutional distance=differences in societal institutions. 3. Geographic/spatial distance=physical distance, taking into account the ease of transport. 4. Economic distance=differences in wealth, income level, infrastructure and costs and quality of natural, financial and human resources. Key...