international-business期末试题

1.DiscusseachofthefollowingtheoriesthattrytoexplainforeigndirectinvestmentA.Internationalproductlifecycle(PLC)AcompanywillbeginbyexportingproductandlaterundertakeFDIastheproductmovesthoughitslifecycle.Newproductstage—goodproducedathomeduetouncertaindomesticdemandandtokeepproductionclosetotheR&DthatdevelopeditMaturingstage—FDIinoverseasfacilitieswheredemandishighenoughtowarrantitStandardizedProductStage—Increasedcompetitionleadstoneedtodecreasecosts—productionshiftstolowcostcountriestoserviceworldmarketAcompanybeginsbyexportingitsproductandlaterundertakesforeigndirectinvestmentasaproductmovesthroughitslifecycleB.MarketImperfections(Internalisation)市场缺陷CompanyundertakesFDItointernalizeatransactionthatisbeingmadeinefficientbyamarketimperfectionTradebarriers(e.g.,tariffs)Specializedknowledge(e.g.,managerialability)C.EclecticTheory折中AfirmundertakesFDIwhenlocation,ownershipandinternalizationadvantagescombinetomakealocationappealingNaturalResourceLocationAdvantage(optimallocation)Locationofproductioninaparticularlocationbecauseofthespecialcharacteristicsofthelocation(naturalresources:oilinMiddleEastetc—skilledworkforceSingapore—todayIndia)ManagementAbilityOwnershipadvantage(specialasset)OwnershipAdvantage:duetoownershipofspecialasset(brandrecognition,technicalknowledge,managementskill)InternalisationAdvantage:Internalizingbusinessactivities(efficiency)Internalisingtheactivity.I.e.producinginacountrytoovercometheinefficiencythatmaybeduetosaytariffbarriers.Theeclectictheorystateswhenthesethreeconditions(location,ownershipandinternalization)arepresent,FDIwilltakeplace.D.MarketPower市场控制力AfirmundertakesFDItoestablishadominantpresenceinanindustry.Marketpower=GreaterprofitsThebenefitofmarketpowerisgreaterprofitbecausethefirmisfarbetterabletodictatethecostofitsinputsandorthepriceofitsoutputVerticalintegration:Extendscompany’sactivitiesintostagesofproductionthatprovideitsinputs(backwardintegration)orabsorbitsout-puts(forwardintegration)2.WhatisFDIanddescribethefollowingreasonsforFDIgrowth,namelyPurchaseofphysicalassetsorsignificantamountofownershipofacompanyinanothercountrytogainsomemeasureofmanagementcontrolA.IncreasedglobalizationInthe1980smanycountrieshadextensivebarrierstotrade—ledtoFDIasameansofgettingaroundsuchbarriers.Alternatively,theUruguayroundoftradenegotiationsdecreasedbarriers–ledtoincreasedFDIasfirmsrealizedtheycouldnowproduceinmostefficientandproductivelocationsintheworld.B.InternationalMergersandAcquisitions[p205]ExplanationsforincreasedM&A•gainpresenceinnewgeographicmarket•increaseinternationalcompetitiveness•Fillinproductiongapsoffirms•Reducecosts(r&d,marketing,production&distribution)C.Entrepreneurshipandsmallforms[p206]AnecdotalevidencepointstoanincreasedroleinM&Abysmallbusiness3.Describetheadvantagesanddisadvantagesofmanagementcontractsandturnkeyprojectsasmethodsofcontractualentryintonewinternationalmarket.[p133]ManagementContract:CompanysuppliesanotherwithmanagerialexpertiseforaspecificperiodoftimeAdvantages:Fewassetsrisked,Nationsfinanceprojects,DevelopslocalworkforceDisadvantages:Personnelatrisk,CreatecompetitorTurnkeyProject:Companydesigns,constructsandtestsaproductionfacilityforaclientAdvantages:Firmsspecializeincorecompetency,NationsobtaininfrastructureprojectsDisadvantages:Politicizedprocess,Createcompetitor[Licensing:onecompanyowningintangibleproperty(thelicensor)grantsanotherfirm(thelicensee)therighttousethatpropertyforaspecifiedperiodoftime.Advantages:1)licensorcanuselicensingtofinancetheirinternationalexpansion.2)lessriskmethodthantheothers3)canhelpreducethelikelihoodthatalicensor’sproductwillappearontheblackmarket4)LicenseescanbenefitfromlicensingbyusingitasmethodofupgradingexistingproductiontechnologiesDisadvantages:1)itcanrestrictalicensor’sfutureactivities2)Itmightreducetheglobalconsistencyofthequalityandmarketingofalicensor’sproductindifferentnationalmarkets3)itmightamounttoacompany“leading”strategicallyimportantpropertytoitsfuturecompetitorsFranchising:franchisingisonecompany(thefranchiser)suppliesanother(thefranchisee)withintangiblepropertyandotherassistanceoveranextendedperiod.Advantages:1)franchisercanuseitasalow-cost,low-riskentrymodeintonewmarkets2)Itisanentrymodethatallowsforrapidgeographicexpansion3)Franchiserscanprofitfromthecultureknowledgeandknow–howoflocalmanagersDisadvantages:1)hardtomanagealargenumberoffranchisees2)Franchiseescanexperiencealossoforganizationalflexibilityinfranchisingagreement.]4.Jointventuresandstrategicalliancesasinvestmententrymodesintonewmarket.Advantagesanddisadvantages.[p135]JointVenture:SeparatecompanycreatedandjointlyownedbytwoormoreindependententitiestoachieveacommonbusinessobjectiveAdvantages:Reducerisklevel,Penetratemarkets,Accesschannels,ProtectinterestsDisadvantages:Partnerconflict,LosecontrolStrategicAlliance:Entitiescooperate(butdonotformaseparatecompany)toachievestrategicgoalsofeachAdvantages:Shareprojectcost,Tapcompetitors’strengths,Gainchannelaccess,ProtectinterestsDisadvantages:Createcompetitor,Partnerconflict[Whollyowned