Professional Documents
Culture Documents
Eight
Strategy
in the Global
Environment
Location economies
Economic benefits from performing a value
creation activity in the optimal location
Leveraging the skills of global subsidiaries
Applying these skills to other operations within firms global network
Localization Strategy
Customizing the companys goods or services so that
International Strategy
Multinational companies that sell products that serve
2. Timing of entry
1. Exporting
Most manufacturing companies begin their global expansion as
exporters and later switch to one of the other modes.
2. Licensing
3. Franchising
4. Joint Ventures
5. Wholly-Owned Subsidiaries
Technological know-how
Wholly-owned subsidiary is preferred over licensing and joint
ventures to minimize risk of losing control.
Management know-how
Franchising, joint ventures, or subsidiaries are preferred as risk is
low of losing management know-how.
Advantages
Disadvantages
2. Alliance structure
Structuring Alliances
to Reduce Opportunism
Opportunism includes
the expropriation of
technology or markets
Figure 8.5