Chapter 8- MGT 436

Multinational company

a firm that does business in two or more national markets

Firms looking to expand to other countries will consider:

which foreign markets to enter, when to enter and on what scale

Globalization of products & markets

created opportunities for firms but has also increased certain threats, trade and other barriers have become less significant

Attributes of National competitive advantage

factor endowments, local demand conditions, competitiveness of related & supporting industries, intensity of rivalry

leveraging products

firms can increase their growth rate by taking goods or services developed in the home country and selling them internationally, distinctive competencies

Global volume

expanding sales volume through international expansion can lead to cost savings from economies

sources of cost savings can include

spreading fixed costs over more units of production, increased bargaining power, learning effects

Realizing location econonmies

arise from performing a value creating activity in the optimal location to lower cost of value creation and better allowing firm to differentiate products