I.

A company from Austria (low power distance) is considering entering the

Vietnam (high power distance) market.
Communication tips for the Austrian manager:
1) Give clear and explicit directions to those working with him
2) Deadlines should be highlighted and stressed
3) Do not expect subordinates to take initiative
4) Be more authoritarian in his management style
5) Show respect and deference to those higher up the ladder

II. A company from France (high uncertainty avoidance) is considering investing in

Denmark (low uncertainty avoidance)
Communication tips for the French manager:
1) Try to be more flexible or open in his approach to new ideas than he may be used to
2) Be prepared to push through agreed plans quickly as they would be expected to be realized
as soon as possible
3) Allow employees the autonomy and space to execute their tasks on their own; only
guidelines and resources will be expected of him

III. A company from UK (high individualism) is considering investing in Mexico (low

individualism)
Communication tips for the UK manager:
1) Note that individuals have a strong sense of responsibility for their family
2) Remember that praise should be directed to a team rather than individuals
3) Understand that rewards depend upon seniority and experience
4) Be aware that the decision making process will be rather slow, as many members
across the hierarchy need to be consulted

IV. A company from Denmark ( low masculinity) is considering investing in Mexico

(high masculinity)
Communication tips for the Danish manager:
1) Be aware that people will discuss business anytime, even at social gatherings
2) Avoid asking personal questions in business situations
3) Take into account that people are not interested in developing closer friendships
4) Communicate directly, unemotionally and concisely
5) In order to assess others use professional identity, not family or contacts
Strategy Pros Cons
• Exploit the experience curve (EC)
Global effects and economies of scale (ES) • Lack of local responsiveness
• Cost effectiveness
• Transfer core competencies to
• Lack of local responsiveness
International foreign
• Unable to exploit EC and ES
markets
Multi • Customize products and services
• High cost
domestic along with real demands for market
• Exploit the EC and ES
• Cost effectiveness
Transnational • Customize products and services • Require good-structuring organization
along with real demands of market
• Develop the global learning system
EXPORTING
Choose exporting:
-it avoids the costs of establishing local manufacturing operations
-it helps the firm achieve experience curve and location economies
Not choose exporting:
-high transport costs and tariffs can make it uneconomical
-agents in a foreign country may not act in exporter’s best interest
Type of exporting:
-Indirect Exporting (Export merchants, Export agents, Export management companies (EMC)
-Cooperative Exporting (Piggyback Exporting)
-Direct Exporting (Firms set up their own exporting departments)

LICENSING
 Choose licensing:
-The firm avoids development costs and risks associated with opening a foreign market
-It avoids barriers to investment
-Capitalize on market opportunities without developing those applications itself
Not choose licensing:
-The firm doesn’t have the tight control required for realizing experience curve and location
economies
-ability to coordinate strategic moves is limited
-proprietary (or intangible) assets could be lost

FRANCHISING
Choose franchising
-it avoids the costs and risks of opening up a foreign market
-firms can quickly build a global presence
Not choose exporting:
-it inhibits the firm's ability to take profits out of one country to support competitive attacks
in another
-the geographic distance of the firm from franchisees can make it difficult to detect poor
quality
TURNKEY PROJECT
Choose turnkey project
-Way of earning economic returns from the know-how required to assemble and run a
technologically complex process
-Less risky than conventional FDI
Not choose turnkey project
-No long-term interest
-May create a new and direct competitor
-If the firm's process technology is a source of competitive advantage, then selling it through a
turnkey project is also selling competitive advantage to potential and/or actual competitors

JOINT VENTURES
Choose JV
-Benefit from a local partner's knowledge of local culture, political systems, and business
systems
-The costs and risks of opening a foreign market are shared
-Satisfy political considerations for market entry
Not choose exporting:
-Risks giving control of its technology
-May not have the tight control to realize experience curve or location economies
-Shared ownership can lead to conflicts and battles for control if goals and objectives
differ or change

WHOLLY OWNED SUBSIDIARY

-“Green field”: firm build a subsidiary from the ground up
Greenfield venture may be better when the firm needs to transfer organizationally embedded
competencies, skills, routines, and culture
-Merger & Acquisition: acquire an existing company
Acquisition may be better when there are well-established competitors or global competitors
interested in expanding
Choose wholly owned subsidiary
-Reduces the risk of losing control over core competencies
-Gives a firm the tight control over operations in different countries that is necessary for
engaging in global strategic coordination
-May be required in order to realize location and experience curve economies
Not choose wholly owned subsidiary
- Bears the full cost and risk of setting up overseas operations