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CHAPTER 20. CORPORATE STRATEGY AND FOREIGN DIRECT INVESTMENT. CHAPTER OVERVIEW:. I. THEORY OF THE MULITNATIONAL CORPORATION II. THE STRATEGY OF MULTINATIONAL ENTERPRISE III. DESIGNING A GLOBAL EXPANSION STRATEGY. I. THE THEORY OF THE MULTINATIONAL CORPORATION.

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chapter 20

CHAPTER 20

CORPORATE STRATEGY AND FOREIGN DIRECT INVESTMENT

chapter overview
CHAPTER OVERVIEW:
  • I. THEORY OF THE MULITNATIONAL CORPORATION
  • II. THE STRATEGY OF MULTINATIONAL ENTERPRISE
  • III. DESIGNING A GLOBAL EXPANSION STRATEGY
i the theory of the multinational corporation
I. THE THEORY OF THE MULTINATIONAL CORPORATION
  • I. THE THEORY OF THE MULTINATIONAL CORPORATION
  • A. The MNC as an Oligopolist: Why FDI?
  • 1. When is FDI justified?
  • 2. Internalization
  • 3. Market Integration
  • a. Vertical
  • b. Horizontal
the theory of the multinational corporation
THE THEORY OF THE MULTINATIONAL CORPORATION
  • B. Financial Market Imperfections
  • 1. Hypothesis
  • 2. Diversification Effect of the MNC
ii the strategy of the mnc
II. THE STRATEGY OF THE MNC
  • II. THE STRATEGY OF THE MNC
  • A. Three strategies:
  • 1. No. 1 That of the Innovation- based MNC
the strategy of the mnc
THE STRATEGY OF THE MNC
  • Three Strategies (con’t)
  • 2. No. 2 That of the mature MNC
  • a. the importance of economies of
  • scale and
  • b. economies of scope
the strategy of the mnc1
THE STRATEGY OF THE MNC
  • 3. No. 3 The senescent MNC
  • a. global scanning capability
  • b. the role of rationalization and
  • integration.
the strategy of the mnc2
THE STRATEGY OF THE MNC
  • 4. FDI and Survival
  • a. Cost reduction
  • b. Economies of scale
  • c. Multiple sourcing
  • d. Keeping domestic customers
iii designing a global expansion strategy
III. DESIGNING A GLOBAL EXPANSION STRATEGY
  • III. DESIGNING A GLOBAL EXPANSION STRATEGY
  • A. Five Necessary Elements:
  • 1. Awareness of profitable investments
  • -building competitive advantage
  • 2. Selecting a mode of entry
  • -evaluate systematically
designing a global expansion strategy
DESIGNING A GLOBAL EXPANSION STRATEGY
  • A. Five Necessary Elements (con’t)
  • 3. Adjusting the Effectiveness of the Entry Mode
  • - continual auditing
  • 4. Using appropriate evaluation criteria
designing a global expansion strategy1
DESIGNING A GLOBAL EXPANSION STRATEGY
  • 5. Estimating the longevity of competitive advantage:
  • a. Develop competitive strength
  • transferable overseas.
  • b. Not easily duplicated
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