Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Domestic companies facing competitive pressure from lower cost imports

06/01/2021 Client: saad24vbs Deadline: 3 days

CHAPTER 7 Strategies for Competing in International Markets


LEARNING OBJECTIVES


THIS CHAPTER WILL HELP YOU UNDERSTAND:


The primary reasons companies choose to compete in international markets


How and why differing market conditions across countries influence a company’s strategy choices in international markets


The five major strategic options for entering foreign markets


The three main strategic approaches for competing internationally


How companies are able to use international operations to improve overall competitiveness


The unique characteristics of competing in developing-country markets


© McGraw-Hill Education.


Why companies decide to enter foreign markets


To further exploit core competencies


To gain access to lower-cost inputs of production


To gain access to new customers and meet current customer needs


To achieve lower costs through economies of scale, experience, and increased purchasing power


To gain access to resources and capabilities located in foreign markets


WHY COMPANIES DECIDE TO ENTER FOREIGN MARKETS


Jump to Appendix 1 long image description


© McGraw-Hill Education.


WHY COMPETING ACROSS NATIONAL BORDERS MAKES STRATEGY-MAKING MORE COMPLEX


1. Different countries with different home-country advantages in different industries

2. Location-based value chain advantages for certain countries

3. Differences in government policies, tax rates, and economic conditions

4. Currency exchange rate risks

5. Differences in buyer tastes and preferences for products and services

© McGraw-Hill Education.


FIGURE 7.1 The Diamond of National Advantage


Jump to Appendix 2 long image description


© McGraw-Hill Education.


THE DIAMOND FRAMEWORK


Answers important questions about competing on an international basis by:


Predicting where new foreign entrants are likely to come from and their strengths


Highlighting foreign market opportunities where rivals are weakest


Identifying the location-based advantages of conducting certain value chain activities of the firm in a particular country


© McGraw-Hill Education.


REASONS FOR LOCATING VALUE CHAIN ACTIVITIES ADVANTAGEOUSLY


Lower wage rates


Higher worker productivity


Lower energy costs


Fewer environmental regulations


Lower tax rates


Lower inflation rates


Proximity to suppliers and technologically related industries


Proximity to customers


Lower distribution costs


Available or unique natural resources


© McGraw-Hill Education.


THE IMPACT OF GOVERNMENT POLICIES AND ECONOMIC CONDITIONS IN HOST COUNTRIES


Positives


Tax incentives


Low tax rates


Low-cost loans


Site location and development


Worker training


Negatives


Environmental regulations


Subsidies and loans to domestic competitors


Import restrictions


Tariffs and quotas


Local-content requirements


Regulatory approvals


Profit repatriation limits


Minority ownership limits


© McGraw-Hill Education.


Core Concepts (1 of 6)


Political risks stem from instability or weaknesses in national governments and hostility to foreign business.


Economic risks stem from the stability of a country’s monetary system, economic and regulatory policies, the lack of property rights protections.


© McGraw-Hill Education.


THE RISKS OF ADVERSE EXCHANGE RATE SHIFTS


Effects of exchange rate shifts


Exporters experience a rising demand for their goods whenever their currency grows weaker relative to the importing country’s currency.


Exporters experience a falling demand for their goods whenever their currency grows stronger relative to the importing country’s currency.


© McGraw-Hill Education.


STRATEGIC MANAGEMENT PRINCIPLE (1 of 6)


Fluctuating exchange rates pose significant economic risks to a firm’s competitiveness in foreign markets.


Exporters are disadvantaged when the currency of the country where goods are being manufactured grows stronger relative to the currency of the importing country.


© McGraw-Hill Education.


STRATEGIC MANAGEMENT PRINCIPLE (2 of 6)


Domestic companies facing competitive pressure from lower-cost imports benefit when their government’s currency grows weaker in relation to the currencies of the countries where the lower-cost imports are being made.


© McGraw-Hill Education.


Thinking Strategically


What effects has the adoption of the euro had on the ability of European Union (EU) countries and firms to respond to changes in intra-national economic conditions given that they now share a common currency?


What should a EU firm do to respond to a adverse currency exchange rate shift in a non-EU country?


How will exiting the EU affect the United Kingdom’s ability to compete in world markets?


© McGraw-Hill Education.


CROSS-COUNTRY DIFFERENCES IN DEMOGRAPHIC, CULTURAL, AND MARKET CONDITIONS


Whether to pursue a strategy of offering a mostly standardized product worldwide


Whether to customize offerings in each country market to match the tastes and the preferences of local buyers


Key Strategic Considerations


Jump to Appendix 3 long image description


© McGraw-Hill Education.


STRATEGIC OPTIONS FOR ENTERING AND COMPETING IN INTERNATIONAL MARKETS


Maintain a home country production base and export goods to foreign markets.


License foreign firms to produce and distribute the firm’s products abroad.


Employ a franchising strategy in foreign markets.


Establish a subsidiary in a foreign market via acquisition or internal development.


Rely on strategic alliances or joint ventures with foreign companies.


© McGraw-Hill Education.


EXPORT STRATEGIES


Advantages


Low capital requirements


Economies of scale in utilizing existing production capacity


No distribution risk


No direct investment risk


Disadvantages


Maintaining relative cost advantage of home-based production


Transportation and shipping costs


Exchange rates risks


Tariffs and import duties


Loss of channel control


© McGraw-Hill Education.


LICENSING AND FRANCHISING STRATEGIES


Advantages


Low resource requirements


Income from royalties and franchising fees


Rapid expansion into many markets


Disadvantages


Maintaining control of proprietary know-how


Loss of operational and quality control


Adapting to local market tastes and expectations


© McGraw-Hill Education.


FOREIGN SUBSIDIARY STRATEGIES


Advantages


High level of control


Quick large-scale market entry


Avoids entry barriers


Access to acquired firm’s skills


Disadvantages


Costs of acquisition


Complexity of acquisition process


Integration of the firms’ structures, cultures, operations, and personnel


© McGraw-Hill Education.


Core Concept (2 of 6)


A greenfield venture is a subsidiary business that is established by setting up the entire operation from the ground up.


© McGraw-Hill Education.


USING A GREENFIELD STATEGY FOR DEVELOPING A FOREIGN SUBSIDIARY


A greenfield strategy is appealing when:


Creating an internal startup is cheaper than making an acquisition


Adding new production capacity will not adversely impact the supply-demand balance in the local market


A startup subsidiary has the ability to gain good distribution access


A startup subsidiary will have the size, cost structure, and resource strengths to compete head-to-head against local rivals


© McGraw-Hill Education.


PURSUING A GREENFIELD STRATEGY


Advantages


High level of control over venture


“Learning by doing” in the local market


Direct transfer of the firm’s technology, skills, business practices, and culture


Disadvantages


Capital costs of initial development


Risks of loss due to political instability or lack of legal protection of ownership


Slowest form of entry due to extended time required to construct facility


© McGraw-Hill Education.


BENEFITS OF ALLIANCE AND JOINT VENTURE STRATEGIES


Gaining partner’s knowledge of local market conditions


Achieving economies of scale through joint operations


Gaining technical expertise and local market knowledge


Sharing distribution facilities and dealer networks, and mutually strengthening each partner’s access to buyers


Directing competitive energies more toward mutual rivals and less toward one another


Establishing working relationships with key officials in the host-country government


© McGraw-Hill Education.


Strategic Management Principle (3 of 6)


Collaborative strategies involving alliances or joint ventures with foreign partners are a popular way for companies to edge their way into the markets of foreign countries.


© McGraw-Hill Education.


Strategic Management Principle (4 of 6)


Cross-border alliances enable a growth-minded firm to widen its geographic coverage and strengthen its competitiveness in foreign markets; at the same time, they offer flexibility and allow a firm to retain some degree of autonomy and operating control.


© McGraw-Hill Education.


Walgreens Boots Alliance, Inc.: Entering Foreign Markets via Alliance Followed by Merger


Did industry consolidation provoke Walgreens to make its strategic international acquisition?


What strategic advantages does the alliance between Walgreens and Alliance Boots bring to both partners?

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

University Coursework Help
Top Essay Tutor
Helping Hand
Writer Writer Name Offer Chat
University Coursework Help

ONLINE

University Coursework Help

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer
Top Essay Tutor

ONLINE

Top Essay Tutor

I have more than 12 years of experience in managing online classes, exams, and quizzes on different websites like; Connect, McGraw-Hill, and Blackboard. I always provide a guarantee to my clients for their grades.

$65 Chat With Writer
Helping Hand

ONLINE

Helping Hand

I am an Academic writer with 10 years of experience. As an Academic writer, my aim is to generate unique content without Plagiarism as per the client’s requirements.

$60 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Lab report example engineering - New novel complex decisions having no proven answers are - Situational irony in heart of darkness - Borneol h nmr - Jack richards pleasant holidays - Math. - Nursing diagnosis for acute cystitis - In “the story of an hour” by kate chopin, what notion about society does chopin seek to dismiss? - Clinical development plan definition - 360g2 cassette 12 lc sm bl pigtails - Uncommon collegiate charter high school - Course Project-Part 1 - Boehm incorporated is expected to pay - Aws pci dss compliance - Public speaking strategies for success 8th edition pdf - Deliverable 3 - Kingston-Bryce Risk Mitigation Plan - Which scenario might indicate a reportable insider threat security incident - Bhopal gas tragedy case study solution - Wendy Lewis 2 - 59 ft lbs to nm - Brisbane city council potholes - 4 2 presentation marketing channel analysis assignment - Bus ashford to folkestone - Instructional management plan - Dispositional biological and evolutionary theory newspaper article - Briefly describe each of the seven quality tools - Personal leadership development plan - Deakin master of psychology clinical - Selling the farm barry estabrook summary - What is the meaning of impairment of assets - Carl's jr menu prices 2019 - Osb investment and technology jsc - How to prepare an adjusted trial balance - Nursing soap note for uti - Icd 10 code for rhonchi - Billy elliot ending scene - Week 4 - Wk 1 assign 6053 - Internet Programming by Murach ( asp.net Core MVC) QUIZ - Acc 110 discussion question - Tony hsieh at zappos structure culture and radical change - Dissolving anhydrous copper ii sulfate in water - Big dog little dog juxtaposition - 01928 area code uk - Margin call real firm - Da form 1594 replacement - Short answer - Property node labview tutorial - Upper and lower bounds - Freeway crack in the system removed from netflix - "A" WORK IN 18 HOURS - Pest control training courses sydney - Primary resources full stops - Evolution of organisation theory - Script bar and bistro - Statistic - Who were the cavaliers - English essay title page - Law and society an introduction steven barkan - Internal environment analysis of samsung - Exploring science how science works 7 worksheets - The intensity of porter's five forces model determines ________ - Remember the titans overview - To measure the amount of acetic acid in vinegar - Apples of gold child care center cleveland oh - Michael galanes say yes to the dress - Tax file declaration qld - Grant o brien woolworths biography - Naplan stimulus persuasive writing - Chapter 13 financial statement analysis - CIS 500 WEEK 3 ASSIGNMENT - Commonwealth coat of arms flag - Service Delivery Models - 500 word Case Study - 3 power point slides with speaker notes and reference slide please - Microsoft threat modeling tool mac - Palmerston estate in ireland - Peregrine assessment exam answers criminal justice - See the questions below - Is 225 a perfect square - The controlled substances act of 1970 - 20200902 - Food handling course chisholm - Metal shop safety rules - Karma kismet new delhi delhi - Process of oral communication - Cell phones being allowed in school - Corporate governance is all of the following except - Simulink pid controller example - Dc circuit physics lab report - Aisling irish community center - Reduction of camphor lab report - A1 vs a4 size - How to bend tattoo springs - Week 1 Assignment: Current Event - Local Issue - Lobe of the cerebrum controls motor functions - Le petit chaperon rouge charles perrault pdf - Department of education and training qld - Principles of macroeconomics libby rittenberg and timothy tregarthen pdf - The biggest advantage to a virtual network approach is