What are economies of scale?
Cost advantages from more efficient production lowering cost per unit.
What does a merger strategy plan to do?
Join two companies into a single new legal entity.
What is a business model?
A framework for how a company creates, delivers, and captures value.
What does a blue ocean strategy create?
A new, uncontested market space where competition is irrelevant.
What is VRIO analysis?
A framework evaluating resources by Value, Rarity, Imitability, and Organization.
What does competitive advantage mean in business?
Doing better than any other competitor can do.
What is strategy in the context of business competition?
How the firm plans to win the game.
What are the five business strategy principles in the chess analogy?
Control the center, develop the pieces, castle, do not waste moves, and connect the pieces.
What does controlling the center mean in business strategy?
Focusing on strategic advantage in areas where value is created.
Which areas are examples of value creation in controlling the center?
Customer relationships, distribution channels, data, talent, and intellectual property.
What does developing the pieces mean in business strategy?
Building capabilities by investing in skilled people, technology, organizational processes, and partnerships.
What does castling represent in business strategy?
Protecting what matters through financial risk management, cybersecurity, legal protection, succession planning, and operational resilience.
What does a chess sacrifice represent in business?
Deliberate tradeoffs made expecting a better position, greater initiative, or eventual success.
What is internationalization in business?
The process of expanding business operations beyond domestic borders.
What are key drivers in internationalization?
Primary factors influencing a firm's decision to expand abroad.
What are the four categories of internationalization drivers?
Market, Resources and Capabilities, Efficiency, and Strategic Assets.
Why might a fast food company internationalize?
To access new markets and benefit from economies of scale.
Why might a car manufacturer locate plants in different countries?
To cut costs and move closer to customers.
Why might a technology company launch products worldwide?
To reinforce its world leader position and access new markets.
How do market drivers expand business opportunities?
By expanding the customer base.
What is one way market drivers diversify business income?
By diversifying revenue streams.
How do market drivers follow customers internationally?
By following customers into foreign markets.
What can internationalization provide access to regarding materials?
Raw materials or components scarce or cheaper abroad.
Besides materials, what else can internationalization provide access to?
New technologies, research, and skilled labor.
How can firms reduce production costs internationally?
By locating facilities in countries with lower labor costs.
What tax-related advantage can firms gain by internationalizing production?
More favorable tax regimes abroad.
What are efficiency drivers in business strategy?
Achieving economies of scale, optimizing the value chain, and exploiting global competitive advantages.
What is a joint venture in international business?
Collaboration with local partners to gain market insights and reduce risks.
Why do firms use mergers and acquisitions internationally?
To gain access to foreign markets, technologies, or brands.
What does achieving economies of scale help a firm do?
Reduce costs by increasing production volume.
How does optimizing the value chain serve as an efficiency driver?
By improving each step to increase overall efficiency.
What advantage does exploiting competitive advantages on a global scale provide?
It enhances a firm's position against international competitors.
What should firms assess during internationalization?
Markets, resources and capabilities, and strategic choices.
What should firms consider regarding internationalization challenges?
The challenges and risks they may face.
What should firms evaluate when entering a new market?
Future opportunities that may arise.
Test your knowledge with 15 questions on International Strategic Management Introduction.
1. What is internationalization?
2. Before internationalizing, which combination should a firm assess to support its strategic decisions?
Review the complete course in the study sheet for International Strategic Management Introduction.
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