Upload
rabiatul-andawiyah
View
152
Download
4
Embed Size (px)
Citation preview
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-1
International BusinessEnvironments and Operations
Part 5
Global Strategy, Structure, and Implementation
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-2
Chapter 14
Direct Investment
and Collaborative
Strategies
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-3
Chapter Objectives
• To clarify why companies may need to use modes other than exporting to operate effectively in international business
• To comprehend why and how companies make foreign direct investments
• To understand the major motives that guide managers when choosing a collaborative arrangement for international business
• To define the major types of collaborative arrangements• To describe what companies should consider when entering into
international arrangements with other companies• To grasp why collaborative arrangements succeed or fail• To see how companies can manage diverse collaborative
arrangements
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-4
Exporting May Not Be Feasible
• When production abroad is cheaper than at home• When transportation costs to move goods or services
internationally are too expensive• When companies lack domestic capacity• When products and services need to be altered
substantially to gain sufficient consumer demand abroad
• When governments inhibit the import of foreign products
• When buyers prefer products originating from a particular country
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-5
FactorsAffecting Operating Modesin International Business
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-6
ForeignExpansion: Alternative
Operating Modes
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-7
Non-collaborative Foreign Equity Arrangements
• Taking Control: Foreign Direct Investment– Internalization– Appropriability– Freedom to Pursue a Global Strategy
• How to make FDI– Buying– Greenfield Investments
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-8
Motives for Collaborative Arrangements
• To Spread and Reduce Costs• To Specialize in Competencies• To Avoid/Counter Competition• To Secure Vertical and Horizontal Links• To Gain Knowledge
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-9
International Motives for Collaborative Arrangements
• To Gain Location Specific Assets• To Overcome Governmental Constraints• To Diversify Geographically • To Minimize Exposure to Risky Environments
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-10
Types of Collaborative Arrangements
• Factors Influencing Choice of Arrangement Type:– Control– Prior Expansion
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-11
Licensing
Licensing agreements may be:
• Exclusive or nonexclusive
• Used for patents, copyrights, trademarks, and other intangible property
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-12
Franchising
• A specialized form of licensing– includes providing an intangible asset and
continually infusing necessary assets• Franchise Organization• Operational Modifications
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-13
Management Contracts
Foreign management contracts are used
primarily when the foreign company can
manage better than the owners.- Company transfer management personnel &
administrative know-how abroad to assist another company for a fee. (3-5 years contract)
- A company believes other company can manage its operation more efficiently than it can.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-14
Turnkey Operations
Turnkey operations are:
• Most commonly performed by industrial-equipment, construction, and consulting companies
• Often performed for a governmental agency
- One company contracts with another to build complete, ready-to-operate facilities.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-15
Turnkey Operations
• Contracting to Scale
• Making Contacts
• Marshaling Resources
• Arranging Payment
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-16
Joint Ventures• More than one organization owns a company
– Consortium: more than two organizations participate
– May have various combinations of ownership
Possible Combinations:
• Two companies from the same country joining together in a foreign market
• A foreign company joining with a local company
• Companies from two or more countries establishing a joint venture in a third country
• A private company and a local government forming a joint venture
• A private company joining a government-owned company in a third country
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-17
Equity Alliances
A collaborative arrangement in which at
least one of the collaborating companies
takes an ownership position
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-18
Problems with Collaborative Arrangements
• Relative Importance• Divergent Objectives• Questions of Control• Comparative Contributions and
Appropriations• Culture Clashes • Differences in Corporate Cultures
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-19
Managing International Collaborations
• Dynamics of Collaborative Arrangements• Finding Compatible Partners• Negotiating the Arrangement• Drawing Up the Contract• Improving Performance
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-20
Future: Why Innovation Breeds Collaboration
Collaborative arrangements will bring both
opportunities and problems as companies move
simultaneously to new countries and to
contractual arrangements with new companies.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
14-21
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the
United States of America.