Foreign Market Entry Concepts

These flashcards cover key vocabulary and concepts related to foreign market entry strategies from the lecture notes.

Liability of Foreignness

The disadvantages that foreign firms face in host countries due to their non-native status.

Institutional Void

Conditions of a country lacking market-supporting infrastructure.

Location-Specific Advantage

Benefits a firm gains from features unique to a specific location.

First-Mover Advantage

Benefits accrued to firms that enter a market first, which late entrants do not enjoy.

Late-Mover Advantage

Benefits accrued to firms that enter a market later, free-riding on first mover investments.

Scale of Entry

The amount of resources a firm commits to entering a foreign market.

Entry Mode

The form of operation a firm employs to enter foreign markets.

Nonequity Mode

A mode of entry reflecting smaller commitments to overseas markets, such as exports and contractual agreements.

Equity Mode

A mode of entry indicating larger commitments to overseas markets, such as joint ventures and wholly owned subsidiaries.

Co-marketing

Efforts among several firms to jointly market their products and services.

Turnkey Project

A project in which clients pay contractors to design and construct new facilities and train personnel.

Greenfield Operation

Building factories and offices from scratch in a foreign country.

Joint Venture (JV)

A new corporate entity created and jointly owned by two or more parent companies.

Wholly Owned Subsidiary (WOS)

A subsidiary located in a foreign country that is entirely owned by the parent multinational.

Country-of-Origin Effect

The perception of firms and products based on their country of origin, which can be positive or negative.

Linkage, Leverage, and Learning (LLL) Advantages

The advantages sought by multinationals from emerging economies, enabling them to compete globally.