International Business

A framework evaluating the attractiveness of a market based on various competitive forces, such as the threat of new entrants, the bargaining power of buyers and suppliers, and the rivalry among existing competitors.

Expanding on Porter's 5 Forces, this model considers the impact of external factors like Social, Technological, Economic, Environmental, Political, Legal and Ethical forces on a business.

A methodology used to assess the strengths and weaknesses of a company's position within a market.

A business model where companies collaborate and work together to achieve shared goals, creating value for customers.

A tool used to analyze a company's strengths and weaknesses, both internally and externally, to determine its market attractiveness.

A framework for evaluating a company's capability maturity, moving from chaos to optimization through five stages.

Describes the cyclical patterns of economic growth and decline, impacting investment decisions.

Distinct capabilities that provide a competitive advantage, meeting customer needs and being difficult for others to replicate.

These are the advantages a company possesses that are specific to its home country, such as brand reputation, established relationships with suppliers, and access to local resources.

These are the advantages a company possesses that can be used in any location, such as advanced technology, strong brand equity, or a skilled workforce.

These are the advantages a company possesses that are specific to a particular location, such as access to cheap labor or specialized resources, or unique regulations.

This is the process of using a company's unique strengths (FSAs) to take advantage of opportunities (LAs) in a new location.

These are the unique strengths and capabilities a company has, such as its technology, brand, or management skills.

This is the process of adapting the company's FSAs to the specific needs of a new location, such as modifying its products or marketing strategies.

This is the process of using the company's FSAs to achieve success in a new location, such as building new factories or forming partnerships.

This is the process of determining the best way to operate in a new location, such as setting up a subsidiary, forming a joint venture, or licensing its technology.

The increasing integration of physical objects with the internet, allowing them to collect and exchange data.

Screens are becoming increasingly prevalent in our everyday lives, from smartphones and tablets to fridges and even clothing.

The use of technology worn on the body, such as smartphones, watches, and fitness trackers.

Technology implanted within the human body, such as microchips or sensors.

A type of technology that enhances the user's perception of reality by adding digital information to the real world. Examples include augmented reality games and product visualizations.

The inability of a firm to fully understand and respond to all relevant aspects of a complex and unfamiliar environment due to limited information processing capacity.

The difficulty of accurately assessing and managing risks related to partners and stakeholders in geographically diverse locations.

A strategic approach where a firm adopts a more collaborative and empowering approach to managing its subsidiaries, recognizing their unique local strengths and expertise.

A framework for ensuring fairness and transparency in decision-making processes involving subsidiaries, promoting trust and collaboration within the MNE.

The failure of senior MNE management to recognize and leverage the potential of subsidiaries to develop unique strengths and capabilities.

A strategic approach that recognizes the diverse roles and contributions of subsidiaries and encourages the development of unique capabilities within each subsidiary.

The organizational structure and decision-making processes that support the differentiated approach to managing subsidiaries, enabling subsidiaries to contribute their unique strengths.

A strategic framework for managing subsidiaries based on their relative importance and contribution to the overall MNE strategy, allocating resources and empowering decision-making accordingly.

A process of analyzing a company's financial performance to identify non-recurring or one-off items that might skew the true picture of the business's underlying performance. This helps in determining the actual value of a company during M&A transactions.

Adjustments made to a company's financial statements to reflect changes in business structure, such as acquisition or divestment of subsidiaries. These adjustments reveal a more realistic picture of the company's future earnings potential.

The analysis of a company's debt structure, focusing on aspects such as the amount of debt, its interest coverage, debt maturity profile, and the debt-to-equity ratio. This helps assess the financial risk associated with the company and its ability to service its debt obligations.

The analysis of a company's working capital, which includes current assets (such as inventory and accounts receivable) and current liabilities (such as accounts payable). This provides insights into a company's short-term liquidity and operational efficiency.

A secure online platform where a company compiles and stores confidential documents and data, making it accessible to potential buyers during an M&A transaction. It provides a controlled environment for due diligence and enables organized information sharing.

A legally binding contract outlining the terms and conditions of the acquisition of a company. It specifies the purchase price, payment terms, closing conditions, representations, warranties, and indemnities. This document serves as the basis for the transaction and protects both the buyer and the seller.

A visual framework depicting the key elements that drive the value of a company. This framework helps identify and assess the most important factors contributing to its overall profitability and growth potential. This is essential for determining a fair purchase price.

A model evaluating the potential value creation and risks associated with an M&A transaction. This framework considers factors like market size, competitive landscape, synergy potential, and integration costs. It helps determine the investment's feasibility and likely returns.

A factory that focuses on utilizing low-cost inputs and building best practices within the MNE's network. These plants often enjoy more autonomy and are typically located in areas with skilled labor and good infrastructure. They act as a resource hub and play a vital role in the MNE's global supply chain.

A factory that caters primarily to the host country's or region's output market. These plants possess stronger capabilities, such as customizing products, developing new products, and implementing process improvements. They serve as a local response to specific markets and are more involved in tailoring offerings.

A factory that excels in new product development and resource recombination. These plants strongly contribute to localized manufacturing innovation and are often located in areas with a strong cluster of talented individuals. They often have close ties with research labs and key players in the input market.

A factory that provides mainly manufacturing capacity and low-cost production. They are less involved in resource recombination and developing new FSAs. These factories are often located in areas with low-cost production and less skilled labor.

A factory that mainly serves the MNE's domestic market. They are not typically involved in resource recombination or developing FSAs. They often focus on filling local demand for the core product, primarily serving as a low-cost producer for the parent company.

The ability of a company to relocate its operations to a new location based on factors such as cost, availability of resources, or government incentives. This flexibility allows the company to optimize its manufacturing network based on changing market conditions.

The process of upgrading foreign factories from basic production units to more strategic roles, such as source, contributor, or lead factories. This involves enhancing internal capabilities, building relationships with key players in the local market, and developing new FSAs.

The practice of treating foreign factories solely as cost-effective production centers, neglecting long-term investment and potential for development. This approach hinders the growth of the MNE's global network and can create instability in the face of market changes.