What is one reason that a company would choose to expand internationally quizlet?

Globalization 1.0: 1900-1941
- Sales, operations, and some procurement
- Strategy flowed from HQ to international sites

Globalization 2.0: 1945-2000
- To reconstruct damage from WWII [Cold War]
- Focus on European countries, Japan, and Australia
- Greater local-responsiveness
- HQ set goals, international sites influenced tactics

Globalization 3.0: 21st Century
- Business function locations are based on costs, capabilities, and PESTEL factors
- Companies can operate 24/7, 365 days a year
- MNE's: Apple, Google, Microsoft, Facebook, Starbucks

Helps MNEs that pursue a low-cost leadership strategy

Examples of low-cost raw materials:
- Lumber, iron ore, oil, and coal

Was a key driver of Globalization 1.0 and 2.0
- During Globalization 3.0, firms benefit from lower labor costs in manufacturing and services

India carved out a competitive advantage in business process outsourcing [BPO], not only because of low-cost labor but because of an abundance of well-educated, English-speaking young people. Infosys, TCS, and Wipro are some of the more well-known Indian IT service companies. Taken together, these companies employ more than 250,000 people and provide services to many of the Global Fortune 500. Many MNEs have close business ties with Indian IT firms. Some, such as IBM, are engaged in foreign direct investment through equity alliances or building their own IT and customer service centers in India. More than a quarter of Accenture's work force, a consultancy specializing in technology and outsourcing, is now in Bangalore, India

Helps MNEs that pursue a differentiation strategy

Foreign direct investments provide access to:
- Communities of learning: often contained in specific geographic regions
-- Globally present
-- Locally responsive
- Location economies: benefits from locating value chain activities in optimal geographies
- Tata Steel, Carnegie Steel

AstraZeneca, a Swiss-based pharmaceutical company, relocated its research facility to Cambridge, Massachusetts, to be part of the Boston biotech cluster, in hopes of developing new R&D competencies in biotechnology. Cisco invested more than $1.6 billion to create an Asian headquarters in Bangalore and support other locations in India, in order to be in the middle of India's top IT location. Unilever's new-concept center is located in downtown Shanghai, China, attracting hundreds of eager volunteers to test the firm's latest product innovations on-site, while Unilever researchers monitor consumer reactions.

1. Social Science
2. Business
3. International Marketing

Terms in this set [86]

1. Social Science
2. Business
3. International Marketing

Terms in this set [110]

1. Social Science
2. Business
3. International Marketing

Terms in this set [132]

1. Social Science
2. Business
3. International Marketing

Terms in this set [120]

What is one reason that a company would choose to expand internationally?

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