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Chapter 2 l.jpg
Chapter 2

  • Responding to Conflicting Environmental Forces


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Causes of Change

  • Pressure: remain competitive

  • Forces: respond to local, regional, national levels to meet demands

  • Adaptations: adapt and diffuse problems quickly to capture a knowledge-based competitive advantage

  • Political, social, economic and technology changes have forced MNE managers to rethink their businesses and go global.


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Theodore Levitt’s Globalization

  • Drives companies to develop globally standardized products to be sold world wide

  • Good or bad?

http://www.youtube.com/watch?v=HvUCCCm99UQ&feature=related


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Globalization

  • What causes globalization?

    • Economies of scale, economies of scope and factor costs


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Economies of Scale

  • Average cost/unit decrease as output increase

  • Bulk buying, marketing, specialization-cut out the middle man.


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Economies of Scope

  • Lower average cost of a firm producing two or more products.


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Factor Costs

  • Total costs of a company

  • Turn internationally to find cheap labor


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The Expanding Spiral of Globalization

  • Globalization has a domino effect

  • Standardization of parts and generalization of products



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Sources

http://cdn1.beeffco.com/files/poll-images/normal/globalization_5271.jpg

http://alidavies.com/wp-content/uploads/2010/02/Time-for-change.jpg

http://3.bp.blogspot.com/_2z9nKHWoL4Q/TB4S15J7aCI/AAAAAAAAAFw/Bn7dH310F3k/s320/globalization.gif

http://static.arstechnica.com/vintage_computers/Perkin_Elmer.JPG

http://shouhda.files.wordpress.com/2009/11/old_cell_phone.jpg

http://farm1.static.flickr.com/39/119197856_fbc73ae2c7.jpg?v=0

http://2.bp.blogspot.com/_6hK1nwXMjWw/SfwbDKVfBqI/AAAAAAAAAEA/wSzGfkE9vUc/s320/globalization.jpg

http://chrispie.punt.nl/upload/dominoeffect.jpg

http://www.rodekruis.nl/actueel/Nieuws/PublishingImages/euro-money-geld.jpg

http://s2.hubimg.com/u/1445861_f520.jpg

http://www.suu.edu/faculty/aton/3220images/woodamericangothic.jpg

http://whatnowtoons.com/images/exporting-jobs-what-now-296.jpg

http://s2.hubimg.com/u/1445861_f520.jpg

http://www.etftrends.com/wp-content/uploads/2010/09/Changes_next_exit.jpg

http://hywelsbiglog.files.wordpress.com/2008/06/image38-d-front1.jpg

http://onceuponacream.at/wp-content/uploads/2010/12/milk.jpg


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