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Global economics WGU
Chapter 10 Over Coming Liability of Foreigness
| Question | Answer |
|---|---|
| liability of foreignness | inherent disadvantage foreign firms experience in host countries because of their innovative status |
| resource based view | argues that foreign firms need to deploy overwhelming resources & capabilities to affect the liability of foreignness |
| location specific advantages | benefits a firm reaps from the features specific to a place- geography |
| agglomeration | location specific advantages that arise from the clustering of economic activities in certain locations |
| natural resource making location specific advantages | possession of natural resources & related transport & communication infrastructure |
| natural resource making examples | oil in the middle east, Russia, and Venezuela |
| market seeking location specific advantages | abundance of strong market demand and customers willing to pay |
| market seeking examples | GM in China |
| efficiency seeking | economies of scale and abundance of low cost factors |
| efficiency seeking examples | IT in silicon Valley and Bangalore Telecom in Dulles aerospace Russia |
| first mover advantage definition | benefits that occur to firms that enter the market first and that later entrants do not enjoy |
| late mover advantage definition | benefits that accrue to firms that enter the market later and that early entrants do not enjoy |
| first mover advantages | proprietary technological leadership |
| first mover advantages | pre-emption of scarce resources |
| first mover advantages | AVOIDANCE OF CLASH WITH DOMINANT firms at home |
| first mover advantages | relationships with key stakeholders such as governments |
| proprietary technological examples | Apples IPOD, IPAD, IPHONE |
| pre-emption of scarce resources examples | Japanese MNE's in South Asia |
| establishment of entry barriers for late examples | Polands F-16 fighter jet contract |
| avoidance of clash with dominant firms at home | Sony, Honda go to the US market ahead of their Japanese rivals |
| relationships with key stakeholders such as governments | Citigroup, JP Morgan Chase and metallurgical corp of China enter Afghanistan |
| later mover advantages | opportunity to free ride on 1st mover investments |
| opportunity to free ride on first mover investments | Ericson won big contracts in Saudi Arabia free riding on Coscos efforts |
| late mover advantages | resolution of technological and market uncertainty |
| resolution of technological and market uncertainty examples | GM and Toyota have patience to wait until Nissan leaf resolves uncertainties about the electric car |
| later mover advantages | first movers difficulty to adapt to market changes |
| first movers difficulty to adapt to market changes examples | greyhound is stuck with the bus depots where as Megabus uses curbside stops |
| scale of entry | amount of resources committed to entering a foreign market |
| modes of entry | method used to enter a foreign market |
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nashanta
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