Chapter 6

KEY TERMS:
Diversification strategy

Explanation
A term used in international business to describe a strategy whereby a company moves rapidly into many markets and gradually increases its commitments within each one A cost-reduction advantage due to economies of scale attained through moving into a foreign market ahead of competitors Reduction in the amount of investment. Also known as divestment A strategy for exploiting temporary monopoly advantages by moving first to those countries most likely to develop local production Foreigners companies lower survival rate in comparison to local companies for many years after they begin operations A theory that helps explain capital budgeting and, when applied to international operations, means that investors are willing to take less return in order to be able to shift the resources to alternative uses The process in oliogopoly industries for competitors to emulate each other, such as going to the same locations Situations in which the marketing program in one country results in awareness of the product in other countries

First-mover advantage

Harvesting (or divesting) Imitation lag

Liability of foreignness

Liquidity preference

Oligopolistic reaction

Spillover effect

Chapter 7
KEY TERMS:
Appropriablity theory

Explanation
The theory that companies will favor foreign direct investment over such nonequality operating forms as licensing arrangements so that potential competitors will be less likely to gain access to proprietary information The joining together of several entities, such as companies or governments, in order to strengthen the possibility of achieving some objective A situation in which a cooperating company takes an equity position (almost always a minority) in the company with which it has a collaborative arrangement A perspective that holds that each company has a unique combination of competencies

Consortium

Equity alliance

Resource-based view

Chapter 8
KEY TERMS:
Centralization

Explanation
The situation in which decision making is done at the home office rather than at the country level The planning, implementation, evaluation, and correction of performance to ensure that organizational objectives are achieved Linking or integrating activities into a unified system The situation in which decisions tend to be made at lower levels in a company or at the country-operating level rather than at headquarters

Control

Coordination Decentralization

Divisional structure

An organization that contain separate divisions based around individual product lines or based on the geographic areas of the markets served An organization that is structured according to functional areas of business How the company specifies, divides, and assigns the set of organizational tasks An organizational structure in which foreign units report (by product, function, or area) to more than one group, each of which shares responsibility over the foreign unit A structure that integrates various aspects of the other forms of structures A situation in which a group of companies is interrelated and in which the management of the interrelation is shared among so-called equals The values, beliefs, business principles, traditions, ways of doing things, and nature of internal work environment within a company The formal arrangement of roles, responsibilities, and relationships within an organization

Functional structure Horizontal differentiation Matrix division structure

Mixed structure Network organization

Organization culture

Organization structure

Chapter 9
KEY TERMS:
Cost-plus strategy Gap analysis

Explanation
The strategy of pricing at a desired margin over cost A tool used to discover why a companys sales of a given product are less than the market potential in a country; the reason may be a usage, competition, product line, or distribution gap Formerly trademarked names that have become part of the public domain The handling of goods through unofficial

Generic names Gray market

distributors Penetration strategy A strategy of introducing a product at a low price to induce a maximum number of consumers to tray it A promotion strategy that sells consumers before they reach before they reach the point of purchase, usually by relying on mass media A promotion strategy that involves direct selling techniques Charging a high price for a new product by aiming first at consumers willing to pay that price and then progressively lowering the price

Pull promotion

Push promotion Skimming strategy

Chapter 10
KEY TERMS:
Acceptable quality level (AQL)

Explanation
A concept of quality control whereby managers are willing to accept a certain level of production defects, which are level of production defects, which are dealt with through repair facilities and service centers The use of the Internet to join together suppliers with companies and companies with customers

e-commerce

Electronic data interchange The electronic movement of money and information via computers and telecommunications equipment Enterprise resource planning (ERP) Extranet Foreign trade zones (FTZs) Software that can link information flows from different parts of a business and from different geographic areas The use of the Internet to link a company with outsiders A government designated area in which goods can be stored, inspected, or manufactured without being subject to formal customs procedures until they leave

the zone International Organization for Standardization (ISO) A quality standard developed by the International Standards Organization in Geneva that requires companies to document to quality at all levels of the organization The use of the Internet to link together the different divisions and functions inside a company That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption, to meet customers requirements; sometimes called materials management The process of shifting production to a foreign country Where one company contracts with another company to perform certain functions, including manufacturing and back office operations. May be done in or close to the companys home country (nearshoring) or in another country (offshoring) An online collaboration model that brings manufactures, distributors, value-added resellers, and customers together to execute trading transactions and to share information about demand, production, availablility, and more Meeting or exceeding the expectations of a customer A highly focused system of quality control that uses data and rigorous statistical analysis to identify defects in a process or product, reduce variability, and achieve as close to zero defects as possible The strategy that a company pursues in purchasing materials, components, and final products; sourcing can be form domestic and foreign locations and form inside and outside the company The coordination of materials, information, and funds from the initial raw material supplier to the ultimate customer The process that a company uses to achieve quality, where the goal is elimination of all defects The control of the different stages as a product moves from raw materials through production to final distribution

Intranet Logistics (or materials management)

Offshore manufacturing Outsourcing

Private technology exchange (PTX)

Quality Six sigma

Sourcing strategy

Supply chain

Total quality management (TQM) Vertical integration

Zero defects

The elimination of defects, which results in the reduction of manufacturing costs and an increase in consumer satisfaction