Chapter 7 - International strategy: Creating value in global markets. After reading this chapter, you should have a good understanding of the following learning objectives: The importance of international expansion as a viable diversification strategy; the sources of national advantage that is, why an industry in a given country is more (or less) successful than the same industry in another country; the motivations (or benefits) and the risks associated with international expansion, including the emerging trend for greater offshoring and outsourcing activity;. | International Strategy: Creating Value in Global Markets chapter 7 International Strategy Globalization has to do with the rise of market capitalization around the world: International exchanges have increased Trade in goods & services Exchange of money, information, & ideas Laws, rules, norms, values, and ideas are growing more similar across countries Challenges include balancing between emerging markets & developed markets How to meet the needs of customers at very different income levels 7- Globalization = has two meanings. One is the increase in international exchange, including trade in goods and services as well as exchange of money, ideas, and information. Two is the growing similarity of laws, rules, norms, values, and ideas across countries. Globalization has undeniably created tremendous business opportunities for multinational corporations. One of the challenges with globalization is determining how to meet the needs of customers at very different income levels. In . | International Strategy: Creating Value in Global Markets chapter 7 International Strategy Globalization has to do with the rise of market capitalization around the world: International exchanges have increased Trade in goods & services Exchange of money, information, & ideas Laws, rules, norms, values, and ideas are growing more similar across countries Challenges include balancing between emerging markets & developed markets How to meet the needs of customers at very different income levels 7- Globalization = has two meanings. One is the increase in international exchange, including trade in goods and services as well as exchange of money, ideas, and information. Two is the growing similarity of laws, rules, norms, values, and ideas across countries. Globalization has undeniably created tremendous business opportunities for multinational corporations. One of the challenges with globalization is determining how to meet the needs of customers at very different income levels. In many developing economies, distributions of income remain much wider than they do in the developed world, leaving many impoverished even as the economies grow. The concept “bottom of the pyramid” refers to the practice of a multinational firm targeting its goods and services to the nearly 5 billion poor people in the world who inhabit developing countries. Factors Affecting a Nation’s Competitiveness Michael Porter’s diamond of national advantage explains why some nations and their industries outperform others: Factor endowments Demand conditions Related and supporting industries Firm strategy, structure, & rivalry 7- Some nations and their industries are more competitive than others. Understanding these differences helps a firm create a competitive advantage when it expands internationally. Diamond of national advantage = a framework for explaining why countries foster successful multinational corporations, consisting of four factors – factor endowments; demand conditions; .
