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117 Cards in this Set
- Front
- Back
World trade started after this:
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WWII
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"GATT" stands for:
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General Agreement on Tariffs and trades.
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"WTO" stands for:
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World Trade Organization
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Investment where money is flowing from one country to another to obtain a management interest in businesses operating there:
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Foreign Direct Investment (FDI)
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____ is the largest recipient of FDI in the world:
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United States
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These regional trading agreements have also relaxed trade and investment barriers among member countries:
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European Union and NAFTA (North American Free Trade Agreement)
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___ countries are having a greater impact on the global economy & provide opportunities for multinational firms to market their products & obtain resources:
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B.R.I.C.
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"B.R.I.C." stands for:
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Brazil
Russia India China |
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Not just seeking opportunities and threats domestically but globally:
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The Global Mind-Set
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The disadvantages of being you. Involves cost of risk of doing business outside a firm's domestic market:
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Liability of Foreignness
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Three motives for existing research internationally:
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1) Resource-Seeking
2) Market-Seeking 3) Client-Following |
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When companies seek to gain economies of scale and scope in the use of their current resources by expanding into new markets, increasingly foreign markets:
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Resource-Seeking
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Firms seek to lower costs of production by developing economies of scale, so they seek new places to sell their goods:
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Market-Seeking
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Following business partners aboard:
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Client-following
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*Four of the most prominent motives for International Strategy (from the book):
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1)Resource-seeking
2)Market-seeking 3)SCAs & Learning 4)Competitive Rivalry |
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You get ____ _____ in places where you get SCAs & Learning:
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Knowledge spill-over
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When choosing an international strategy, we should consider two competing issues:
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1)Global efficiencies
vs 2)Local responsiveness |
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More to do with operations. In marketing, global efficiencies is considered:
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Standardization
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More to do with marketing. In marketing, local responsiveness is considered:
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Adaptation
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Increases when the firm can sell its current good or service in multiple international markets:
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Efficiency
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The need for customization to serve international markets increases when the firm sells a good or service. They must ____ specifically to a particular local market:
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Adapt
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Firms seeking ____ _____ may decide to locate in countries where their production and distribution costs will be low:
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Global Efficiency
(Gains economies of scale) |
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An action plan that the firm develops to produce and sell unique products in different markets:
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Multidomestic Strategy
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An action plan that the firm develops to produce and sell standardized products in different markets:
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Global Strategy
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An action plan that the firm develops to produce and sell somewhat unique yet somewhat standardized products in different markets (organized by product & area):
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Transnational Strategy
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Multidomestic strategy is a.k.a as:
Products are: Marketing/Operations are: Decision making is: Knowledge Transfer is: |
-Regionalization Strategy
-Unique -Specialized -Decentralized -Low (No economies of scope/scale) |
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Global strategy is a.k.a as:
Products are: Marketing/Operations are: Decision making is: Knowledge Transfer is: Is transfered in what direction: |
-Globalization Strategy
-One size fits all -Standardized -Highly Centralized -High (can capture economies of scale & some ecomies of scope) - Travels top down |
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Transnational strategy is a.k.a as:
Products are: Marketing/Operations are: Decision making is: Knowledge Transfer is: Is transfered in what direction: |
-Global efficiencies & local responsiveness
-Standardized yet somewhat custom -Marketing (want to standardize), Operations (want to Globalize) -Centralized and Decentralized -Highest (captures both economies of scale & scope) -In all directions |
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6 Modes of International Market Entry:
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-Exporting
-Licensing -Franchising -Contract Manufacturing -Turnkey Projects -Foreign Direct Investment |
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Sending goods and services from one country to another for distribution, sale, and service. Risk & Control=low, used by SMEs:
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Exporting
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Giving permission to produce/sell our products in an international market. Risk low but not as low as Exporting:
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Liscensing
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Barriers of Exporting:
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Tariffs, logistics, quotas
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Barriers of Licensing:
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NONE
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Special form of licensing. Transferring/sharing operating principles. Continue to pay royalties. Essentially buying a customer base:
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Franchising
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Foreign country manufactures parts of products because their cost advantage, firms can invest significant amounts of capital:
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Contract Manufacturing
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Often construction projects to build large infrastructure facilities such as coal or gas fired electrical power plants, are done on a contractual basis:
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Turnkey Projects
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As you go down the Modes of International Market Entry list, Risk and Control get ___:
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Higher
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When the government ceases control of our companies assets and provides inadequate compensation:
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Expropriation
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This terms means new company ownership:
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Equity
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3 Approaches to Foreign Direct Investment:
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1)Strategic Alliance (Partnerships)
2)Joint Ventures 3)Wholly-Owned Subsidiaries |
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Non-Equity Entry Mode of FDI. Represent a cooperative agreement in which home and host country firms work closely together:
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Strategic Alliances (Partnership)
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Equity Entry Mode of FDI. Working together results in creating a separate company to promote the partners' mutual interests:
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Joint Venture
50/50% -95/5% |
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Equity Entry Mode of FDI.Protect SCA. A contractual agreement or relationship where parties benefit from sharing resources &/or capabilities:
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Wholly-Owned Subsidiaries
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Two forms of the FDI Entry Mode, Wholly-Owned Subsidiaries:
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1) Greenfield Venture
2)Acquistion |
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Venture in which a firm buys or leases land, contructs a new facility and hires or transfers mngrs & employees, then independently launches (BUILDS) a new operation (W.O.Sub) w/out involvement of a partner:
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Greenfield Venture
(100%-Build) |
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FDI entry mode in which a firm acquires (buys) an existing host country firm:
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Acquistion
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Major disadvantage of Greenfield Venture:
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It takes time to implement and gain acceptance in the market.
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The main risk of acquistion - The firm often assumes all the acquired firm's _____:
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liabilities
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A factor affecting the Selection of Entry Mode. When resource advantages are the core competencies that provide a competitive advantage over a firm's rival:
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Firm-Specific Resource and Advantages
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A factor affecting the Selection of Entry Mode. Are advantages that are concerned w/the desirability of producing in the home country vs locating production & distribution assets in the host country (exporting):
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Country-Specific or Location Advantages
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A factor affecting the Selection of Entry Mode that make it desirable for a firm to produce the good or service rather than contracting with another firm to produce or distribute it:
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Internal Coordination or Administrative advantages
(not advantage but disadvantage) |
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A decentralized org structure that enable each division to focus on a geographic area, region, or country:
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Geographic-area divisional structure
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A centralized org structure in which each product group is housed in a globally focused worldwide division or worldwide profit center:
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Worldwide divisional structure
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An org sturture in which both functional & product expertise are integrated into teams so the teams will be able to respond quickly to requirements in the global marketplace:
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Global matrix structure
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Ideal that there should be 1 boss:
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Unity of command principle
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3 International Strategies:
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1)Multidomestic strategy
2)Global Strategy 3)Transnational Strategy |
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This international strategy violates the "Unity of Command Principle":
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Transnational Strategy
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CH9-
An action plan a firm develops to form cooperative relationships with other firms. Is a very popular strategy. Purpose is to develop the companys SCAs (non-equity entry mode): |
Strategic Partnership (Cooperative Strategy)
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Two entry Modes for a Strategic Partnership (ownership vs contractual relationships):
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1)Strategic Partnership
2)Joint Venture |
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A separate business that is created by an equity alliance (Equity entry mode):
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Joint Venture
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Two types of strategic alliances are:
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1)Equity Alliance
2)Non-equity Alliance |
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An alliance in which each partner owns a percentage of the equity in a venture that the firms have jointly formed:
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Equity Alliance
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A contractual relationship b/t two or more firms in which each partner agrees to share some of its resources or capabilities:
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Non-equity alliance
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Reasons for Strategic Partnerships:
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*Gain Access to a restricted Market
*Share significant R&D investments *Gain access to complementary resources (full list on p.171) |
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Research continues to show, the key to strategic partnership is matching _______ ________ because:
-it creates dependancy -the direct competition decreases |
complimentary SCAs.
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There is a ___ __ ____ where there are identical SCAs:
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Race to Learn
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Resources that each partner brings to the partnership that when combined, allow for new resources or capabilities that neither firm could readily create alone:
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Complementary resources
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Business-level strategic [partnerships] is the:
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Value Chain
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Two types of business level strategic alliances:
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-Vertical &
-Horizontal Strategic Alliance |
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An alliance that involves cooperative partnerships aross the value chain (partnering with suppliers, mfg, distributors, retailers):
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Vertical Strategic Alliance
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An alliance that involves cooperative partnerships in which firms at the same stage of the value chain share resources and capabilities (partnering w/some1 who does what we do [RACE TO LEARN]:
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Horizontal Strategic Alliance
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Means the one who gets ther first, often rewrites the rules:
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Race to Learn
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Alliances that focus on the firm's product line and are designed to enhance firm growth:
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Corporate-Level Strategic Alliances
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Part of Corporate level strategic (partnerships). This creates partnerships to grow more:
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Diversification by partnership
(sometimed done to diversify less) |
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Part of Corporate level strategic (partnerships). 1+1+1=4, we gain econokies of scope while sharing resources, core competencies, & activities:
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Synergy by partnership
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Part of Corporate level strategic (partnerships). Franchisor - maintain control of product. Franchisee gains brand name recognition & immediate customer base:
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Franchising
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3 Corporate level strategic (partnerships):
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- Diversification by partnership
-Synergy by partnership -Franchising |
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2 International strategic (partnerships):
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1)SA vs Internatioal/Global Strategic Alliances
2)JV vs Internationl Joint Ventures |
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International strategic (partnerships) where two or more countries are involved:
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SA vs Internatioal/Global Strategic Alliances
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International strategic (partnerships) where two or parent companies from two or more different countries are involved:
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JV vs Internationl Joint Ventures
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When deciding on international ventures, ___ matters:
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Culture
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Two main types of Culture:
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1)National Culture
2)Organizational Culture |
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When managing risk in strategic partnerships, development of trust is estabished through builiding:
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Longterm business relationships
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When managing risk in strategic partnerships, have to avoid doing things that only benefits oneself which is called:
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Opportunistic behavior
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Research shows that successful partnerships create or spawn:
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more partnerships
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Failure rates in partnerships are high when the foreign investor have low ___ investment:
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equity
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Partnerships should be:
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Strategic
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Employees that drive innovation within the company. An organization wide reliance on entreprenuership and innovation as the link to solid financial performance:
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Corporate entrepreneurship
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Someone starting up a business: A process of "creative destruction" through which existing products, methods of production, or ways of admintering or managing the firm are destroyed & replaced with new ones:
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Entrepreneur
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Another word for corporate entrepreneurship. A term meaning "inside the company":
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Intrapreneurship
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Means creating something new - a new good, a new type of service, or new way of presenting a good or service to the market:
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Innovation
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Organizations often use 3 methods to innovate:
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1)Internal development
2)Cooperative Relationships 3)Acquistion (just buy it) |
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___ & ___ are the backbone of our economy & economic growth:
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Innovation & Entrepreneurship
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New means of producing, selling, and supporting goods and services:
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Process innovations
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A new way of organizing or handling the organizational tasks firms use to complete their work:
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Administrative innovation
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Circumstances suggesting that new goods or services can be sold at a price exceeding the costs including to create, make, sell, & support them:
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Entrepreneurial opportunities
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Ultimately, the purpose of innovation is to increase corporate:
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performance
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Famous economist that saw Entrepreneurship as a proces...:
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Joseph Schumpeter
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The people who drive the process of innovation:
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Entrepreneur
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Joseph Schumpeter described Entrepreneurship as a process of "___ ___":
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Creative destruction
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Means that you sometimes have to destroy to create things new:
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Creative destruction
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Creation destuction is also the ideat that Entrepreneurship & innovation is not ___ but ____:
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evolutionary but revolutionary
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Entrepreneurial opportunity that is evolutionary:
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Incremental innovation
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Entrepreneurial opportunity that is revolutionary:
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Radical innovation
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Studies show _ out of _ people aren't meant to be Entrepreneurs.
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9 of 10
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How many major failures are there in starting up a business before getting things right?
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8 to 9
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Entrepreneurship is varied by ___ and it changes by ___:
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Culture
Generation |
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A culture with many Entrepreneurs:
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Individualistic culture
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A cultuire with not so many Entrepreneurs:
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Collectivistic culture
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Two step process to Strategic Entrepreneurship:
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1)Identify
2)Exploit |
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The process of taking entrepreneurial actions using a strategic perspective by combining entrepreneurial and strategic mngt processes to enhance the firm's ability to innovate, enter new markets, and improve its performance:
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Strategic Entrepreneurship
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The entrepreneurial opportunites:
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Indentify Strategic Entrepreneurship
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Taking advantage of the entrepreneurial opportunity:
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Exploiting Strategic Entrepreneurship
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Three way to Innovate:
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-Internal Innovation
-Cooperating to Innovate -Acquiring Innovation |
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Using a firm's own resources and capabilites to innovate:
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Internal innovation
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Two or more firms forming an agreement to joint some of their resources and capabilities to innovate:
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Cooperating to Innovate
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Buying ownership of another firm's innovations and innovation capabilities:
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Acquiring Innovation
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