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Questions and Answers
What is the primary goal of a company's concentration on a single industry?
What is the primary goal of a company's concentration on a single industry?
What is the term for expanding a company's operations into an industry that produces inputs for its products?
What is the term for expanding a company's operations into an industry that produces inputs for its products?
What is the result of individuals and departments coordinating their actions?
What is the result of individuals and departments coordinating their actions?
What is the term for entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses?
What is the term for entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses?
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What is the primary goal of a company's diversification strategy?
What is the primary goal of a company's diversification strategy?
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What is the benefit of a company's vertical integration strategy?
What is the benefit of a company's vertical integration strategy?
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What is the primary goal of a company's corporate-level strategy?
What is the primary goal of a company's corporate-level strategy?
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What is the term for the process of creating a competitive advantage in an industry?
What is the term for the process of creating a competitive advantage in an industry?
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What is the primary goal of a company's business-level strategy implementation?
What is the primary goal of a company's business-level strategy implementation?
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What is the term for a company's strategy of operating in multiple countries?
What is the term for a company's strategy of operating in multiple countries?
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Study Notes
International Expansion
- There are four ways to expand internationally: licensing, franchising, strategic alliance, and wholly owned foreign subsidiary.
Licensing
- Allowing a foreign organization to manufacture and distribute a product in their country in return for a negotiated fee.
Franchising
- Selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits.
Strategic Alliance
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Managers pool their organization's resources and know-how with a foreign company, sharing risk and reward.
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Joint Venture: a strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business.
Wholly Owned Foreign Subsidiary
- Establishing production operations in a foreign country independently of local direct involvement.
Planning and Implementing Strategy
- Allocate responsibility for implementation to appropriate individuals or groups.
- Draft detailed action plans that specify how a strategy is to be implemented.
- Establish a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan.
Diversification
- Unrelated Diversification: entering a new industry or buying a company in a new industry that is not related to an organization's current businesses or industries.
Global Strategy
- Selling the same standardized product and using the same basic marketing approach in each national market, resulting in cost savings, but vulnerable to local competitors.
Multi-Domestic Strategy
- Customizing products and marketing strategies to specific national conditions, helping gain local market share, but raises production costs.
Exporting and Importing
- Exporting: making products domestically and selling them abroad.
- Importing: selling at home products that are made abroad.
Formulating Corporate-Level Strategies
- Concentration on a Single Industry: reinvesting a company's profits to strengthen its competitive position in its current industry.
Vertical Integration
- Expanding a company's operations either backward into an industry that produces inputs for its products or forward into an industry that uses, distributes, or sells its products.
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Description
This quiz covers the concepts of licensing and franchising in the context of international business expansion. It explains how companies can allow foreign organizations to manufacture and distribute their products or use their brand name and operating know-how.
