MGT302 Final Exam Study Guide ALL ANSWERS LATEST SOLUTION SPRING FALL-2022 AID GRADE A+

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Tacit Knowledge – Information that is intuitive and difficult to articulate or codify in writing; Ex. swimming or riding a bike (you would want to show a person v. just tell them if they’ve never ... done these things before) • Can be gained through personal experience or interaction • Shared knowledge might be dispersed throughout the company Codified Knowledge – Information that can be easily captured in the form of text, tables, or diagrams; Ex. Jamba Juice recipes, procedures, etc. on how to make smoothies • Product specifications, scientific formulas and computer programs are examples of codified knowledge First Mover Advantages versus Pioneering Costs First Mover Advantages: this is the advantage gained by the first business/company to enter into a new market, can achieve huge market potential and growth as a result Pioneering Costs: costs the firm has to bear that a later entrant can avoid; can arise when the business system in a foreign country is so different from that in a firms home market that the enterprise has to devote considerable time efforts and expense to learning the rules of the game.) Externalities knowledge ‘spillovers’- general knowledge related to a specific industry or idea; comes from sheer concentration of intellectual talent, and a network of informal contacts that allows firms to benefit from each other’s knowledge generation. Basic Entry Decisions: • Which foreign markets – Choose markets close to home and easily moved to • Timing the entry – First mover advantage for new entrants can lead to brand becoming synonymous with the solution of a problem; Ex. Apple iPod is synonymous with mp3 players/portable music problem in the mind of the consumers o Switching costs for customers implemented by first mover can further solidify customer use/base o First mover mistakes can end up benefiting later entrants • Scale of entry – Do we want to enter a foreign market on a very large scale? (Show up and make a large statement) Or should we show up slowly? Resources may determine this for you Strategic Commitments Decision that has a long-term impact and is difficult to reverse such as entering a foreign market on a large scale; can have important influence on the nature of competition in a market; limits a company’s strategic flexibility. Exporting – The sale of products produced in one country to residents of another country • Direct exporting – Company conducts all phases of the sale and transfer of the merchandise to a buyer • Indirect exporting – Firm hires the expertise of someone else to facilitate the exchange for a fee; Advantage of knowledge/expertise in foreign market; Disadvantages: o Limits access to local information o Lack of control over intermediaries Advantages: • Avoids the costs of establishing manufacturing operations in the host country • Minimizes risk and investment • Rapid speed of entry • May realize experience curve and location economies Disadvantages: • Current production location may not have location economies • Transportation costs • Trade barriers and tariffs • Company viewed as an outsider • May not learn about customers and competitors • Exchange rate risk Conditions Favouring Exporting: • Limited sales potential in target country • Little product adaptation required • High target country production costs • Liberal import policies • High political risk Turnkey Projects – When a firm agrees to set up an operating plant for a foreign client and then hand over the “keys” when the plant is fully operational (staff, licenses, etc.); Ex. Enron turnkey plants in India Advantages: • Can earn a return on knowledge asset • Less risky than conventional FDI Disadvantages: • Arrangement does not create long-term interest in the foreign country • May create a competitor Licensing – Allows for another company/person to use your name, production process, etc. for a fee; tends to be a limited (usually short term) agreement; Ex. purchase of ASU apparel off campus would be purchase of licensed clothing – someone went out a obtained legal approval of producing ASU products (i.e. Walmart); An arrangement in which the owner of an intellectual property (the licensor) grants another firm (the licensee) the right to use that intellectual [Show More]

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