Advanced Corporate Strategy

ST104x

Leverage local expertise

One of the primary motives for internationalization of specific activities by MNEs is to get
access to specific resources that foreign countries can offer. For instance, an apparel firm
might want to locate its design studios in geographies with strong design capabilities like Italy
and France, rather than its home country.

Similarly, a global corporation might want to locate its IT services in geographies like India
where local expertise is available in abundance, high quality, and possibly at an affordable
cost. Such local expertise could also be availability of lead users, who provide the firm with
much needed high-quality early feedback on products and services; specific raw materials and
inputs required; or strong institutional regimes.

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