Flashcards on International Business Strategy and Entry Modes
International Business Strategy & Entry Modes Guide
Tap to flip · Swipe to navigate
Internationalization Strategy
23 cards
Card 1
Question: Why do companies follow internationalisation strategies to access new markets?
Answer: To increase the size of potential markets for their products and services and to amplify the life cycle of products that are in the maturity stage dom
Card 2
Question: What cost advantages motivate firms to internationalise?
Answer: To obtain scale economies (spread R&D/marketing costs), reduce transport costs, optimise activity locations (lower labour costs), and access cheaper n
Card 3
Question: How does internationalisation help firms respond to changes in competition and customers?
Answer: Firms can counter increased global competitors seeking advantages and can locate near customer bases in foreign markets (examples: CIE Automotive, Hin
Card 4
Question: List the main advantages of internationalisation.
Answer: Larger potential markets, increased scale and economies, greater bargaining power with suppliers, increased innovation capacity, extended product life
Card 5
Question: What are the primary risks associated with internationalisation?
Answer: Exposure to political and economic instability, exchange rate fluctuations, and management complexity from cultural, linguistic, consumer preference,
Card 6
Question: What are the three main types of internationalisation strategies?
Answer: Global strategy, multidomestic strategy, and transnational strategy.
Card 7
Question: What are the two opposing forces that influence the choice of internationalisation strategy?
Answer: The need to reduce costs (favors geographic concentration and standardisation) and the need to adapt to local markets (favors dispersed operations and
Card 8
Question: What characterises a global strategy?
Answer: High pressure to cut costs, offering standardized products/services, centralised corporate control, strong integration/coordination across businesses,
Card 9
Question: What is a key operational trade-off for firms using a global strategy?
Answer: Deciding where to locate activities requires balancing benefits of activity concentration (cost reduction) against higher transportation costs and pot
Card 10
Question: Give examples of industries where a global strategy is commonly used.
Answer: Pharmaceuticals, aviation, and semiconductors.