Expected Value Duration Transaction Risks Costs Product Life Cycle Evolutionary Model Modes of Crossing Borders Delegate Invest Control Integrated Subsidiary Minority Investment Joint Venture Turnkey Factory Local-forlocal subsidiary Strategic alliance Licensing Do Not Invest Export agent Sales subsidiary Franchise Distributor Management Contract Porter’s National Diamond Government Firm Strategy, Structure, & Rivalry Input Factor Conditions Demand Conditions Related & Supporting Industries Chance Integration/Responsiveness Grid Pressures for H Cross-border Integration L L H Pressures for Local Responsiveness Key Issues and Frameworks -Location Issues Do firms based in a particular country have and advantage/disadvantage in a particular industry? What competitive advantages can a firm gain by locating certain activities in different countries Framework Dynamics of location-specific advantages (Porter’s diamond, “virtual” diamond) I-R (Integration - Responsiveness) Framework Pressures for Global Operational Integration: Pressures for Global Strategic Integration: Technology intensity, scale economies Pressures for cost reduction Homogenous needs/tastes Importance of multinational customers Importance of multinational competitors Investment intensity Pressures for Local Responsiveness Differences in customer needs/tastes Differences in distribution systems Needs for substitutes (regulations) Host government requirements Key Issues and Frameworks--Industry Issues Is globalization an imperative, an opportunity, or a trap in an industry? What changes will intensify the degree of global competition in an industry? Framework Forces for Globalization and Local Responsiveness (I-R grid) Benefits of internationalization Efficiency Global economics of scale Comparative advantage of location Knowledge leverage Use people and ideas globally, create knowledge via multinational scope Responsiveness to customers, key stakeholders What are the key challenges in international business? Where do we do what, and how? How does (or might) operating in a different location affect our competitive advantage? How does (or might) operating across locations affect our competitive advantage?