International Management Lecture week 2.

Continue with last session.

Firms and global market.

Amazon is e-commerce, reason why it did not succeed is because of technological constraints.
Customers are not used to credit card solutions, and cash collection is still a means of payment.
Amazon in China has disadvantages based on product variety.

How well has Amazon done in China, according to the video? Which factors explain its comparative
level of success in China?
-Liability of foreign shizzle

Overall, which factors (Based on the video) seem best to explain why Amazon is more successful in
some countries than in others? What do we learn from the Amazon case about internationalization,
overall?

Porters diamond model=> understand this model.

4 Motives(types) for FDI Natural resource seeking, resources at lower costs than domestic
markets.
Market seeking Volkswagen, different markets
Efficiency seeking How can you do what you already do better? Gain access to resources,
technologies to help you do things better. Regionally, integrated market open borders, treaties,
NAFTA enables companies to take location specific advantages. Do things better elsewhere
Strategic asset seeking  international expansion, specific assets where you get advantages,
pharmaceutical company, Takeda (Japanese firm)

Seven concepts of framework=> Home country, transferable FSA’s are for example technology, but
some things are non-transferable

Bounded reliability= to what extent can you rely on foreign partner to execute your strategy. You
have to take bounded reliability and rationality into account.

Sources bound to location, and firm.

We look to mobility of this.

Firm’s resources
=physical to reputational resources. Laundry list, core competence (of amazon e.g)
so you start with resources then core competences, core competencies is the platform in which
Amazon operates.

Tacit knowledge= knowledge that cannot be transferred, deeply entrenched.

Explicit= rules (easy to transfer)
Lecture week 4, Monday 26th Februari 2018

Centralized exporter, International projector, International coordinator, Multi-Centered MNE.

Centralized exporter=> Sell different markets, there is no transfer of FSA. Standardized products. For
example commodities. No oil companies. Good examples is flowers (tulips)

International ProjectorProjecting its home country success recipes abroad. Firm that has partner
network has location specific advantages, it is projecting (Subway) and not adding to the country,
MCdonalds

International coordinator  Oil industry, Jeans. Take location specific strengths use those location
specific strengths and FSA to compete globally.

Multi-centered MNE Banking, Insurance company, consulting services. FMCG

Generic strategies of MNE’s

Understand what decisions follow from different generic strategies.

Firms can use three generic strategies for creating value globally
-DeploymentProjector
-Development  endowments (every location has his advantage) Vodafone
-Deeping

Lecture week 6;
Lincoln Electrics= different entry modes, guiding question throughout this course is how can firms
expand internationally and which FSA and LBA.

Understanding what are emerging markets=

Poverty= low or middle income

Low average living standards
Capital Markets
-Low sovereign debt ratings (Credit ratings)
-Low Stock market turnover of listed stocks
(Financing from own money instead of private equity)

Dysfunctional Markets=

Frontier markets= difference in labels, more economic perspective. Emerging looks from institutional
way.

When transaction costs are high => Failure of Markets occur.

Omdat je institutional void kan wegwerken als overheid waardoor in toekomst het van ermerging
naar developed kan gaan, emerging heeft juist als kenmerk dat zie issues hebben met legal aspect
dus hoge bureacracy etc, het lang duren van contracten etc.
IFRS= transparancy (in terms of accounting standards)
Independent auditors= Certification
Stock Exchange (Nasdaq has a certain specific set of rules) SEC = gives approvals.
Corporate Law=
Financial intermediaries=

Deep Markets= Haier

BG= What are they, independent firms operating in multiple industries.

Tata Group

Lecture week 7

Subsidiary= Different host country operations

‘’ Evaluate the different ways in which MNEs can organize their expansion into global market’’

Today discuss;
HQ-Sub Relations; requires careful attention, since it is quite important.
Classification MNE Environments
Classification MNE Structures

Opportunities in different markets are not optimally exploited= Development, develop new sources
of comp. advantage, you have to identify, this means that you have to treat each market differently,
what happens in development= Why is it important from development point of view? How can you
match key concepts of development to the answer you try to answer?
Task interdependency= when activities are conducted across different countries, you are spreading
activities across different markets you need to combine exchange information, resource allocation,
managing supply chain.

Adaptation= adapting to local markets.

Know what concepts are and know how to apply them.
Understand question and link concept, you will be awarded points how you apply certain concepts.