Questions and Answers
What is essential for a nation to gain and hold strong international trading and investment positions?
Maintaining economic competitiveness, influencing trade regulations, and developing a global orientation
What is the primary way for companies to achieve competitive advantage?
Through innovation
Why can some firms innovate consistently while others cannot?
Due to differences in national competitive advantage
What are the four broad attributes that determine national competitive advantage according to Porter?
Signup and view all the answers
What do factor conditions include, according to Porter's model?
Signup and view all the answers
What helps MNEs remain abreast of low-cost inputs and knowledge regarding their industry?
Signup and view all the answers
What determines national competitive advantage, according to Porter?
Signup and view all the answers
What is essential for businesses to fashion and shape their goods and services?
Signup and view all the answers
What is a potential consequence of globalization on national sovereignty?
Signup and view all the answers
What is a challenge faced by international firms due to differences in economic environment?
Signup and view all the answers
Why may international firms encounter operating problems in a foreign country?
Signup and view all the answers
What is a factor that affects the success of a foreign firm in a particular cultural setting?
Signup and view all the answers
What is a restriction that countries may place on international business?
Signup and view all the answers
What is a reason why capital may be flowing more freely to certain countries?
Signup and view all the answers
What is a challenge faced by international firms due to differences in legal-political environment?
Signup and view all the answers
What is a consequence of differences in national environments on international business?
Signup and view all the answers
What is the primary benefit of having sophisticated buyers in a country?
Signup and view all the answers
What happens when a company dominates the industry and does not feel the need to upgrade its products and services?
Signup and view all the answers
What is the primary role of government in international business, according to G. Porter?
Signup and view all the answers
What is a consequence of government intervention to protect home industries?
Signup and view all the answers
What is one way to create an international perspective in a company?
Signup and view all the answers
What has been the trend in the U.S. share of world output over the past 30 years?
Signup and view all the answers
What is a result of a company not having an international perspective?
Signup and view all the answers
What is a factor that influences the four determinants of a company's competitive environment?
Signup and view all the answers
Study Notes
Globalization and Capital Flow
- Capital is flowing more freely to countries with lower tax rates and fewer regulatory restrictions.
- This puts additional pressure on national fiscal and monetary policies.
National Sovereignty
- Globalization may undermine national sovereignty in two ways:
- Cultural borrowing may dilute a country's cultural uniqueness.
- Important decisions may be made abroad by foreign owners of domestically located firms.
International Business Environment
Legal-Political Environment
- Companies operating internationally are subject to the laws and political systems of each country.
- Different laws can cause operating problems (e.g., Blockbuster in Germany).
Economic Environment
- Countries differ significantly in terms of GDP per capita.
- Poor countries have smaller markets, less disposable income, higher illiteracy rates, and lower life expectancy rates.
Cultural Environment
- Country norms, attitudes, values, and beliefs differ from country to country.
- Cultural issues, such as work attitudes and leadership styles, can affect a foreign firm's success.
Mobility
- Countries restrict the international movement of goods, currency conversion, and immigration.
Gaining International Trading Positions
- A nation must maintain economic competitiveness, influence trade regulations, and develop a global orientation.
Innovation and Competitive Advantage
- Innovation is key to achieving competitive advantage.
- This can be accomplished through ongoing improvement or making existing products obsolete.
- Four attributes determine national competitive advantage: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry.
Porter's Model
- Factor conditions include land, labor, and capital.
- Demand conditions require sophisticated local demand to shape goods and services.
- Related and supporting industries provide low-cost inputs and knowledge.
- Firm strategy, structure, and rivalry help manage operations in the face of competitiveness.
National Competitive Advantage
- The four determinants in Porter's model interact and depend on each other.
- Government policies and chance can influence the four determinants.
- A government's major role in international business is as a world trade negotiator.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
