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Strategic Management

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Globalization is the process of closer integration and exchange between different countries and people worldwide, made possible by falling trade and investment barriers, tremendous advances in telecommunications and drastic reductions in transportation costs.

Integration-Responsiveness Framework, strategy framework that juxtaposes the pressures an MNE faces for cost reductions and local responsiveness to derive four different strategies to gain and sustain competing advantage when competing globally: international strategy, localization strategy, global-standardization strategy, and transnational strategy.

Local Responsiveness is the need to tailor product and service offerings to fit local consumer preferences and host-country requirements; generally entails higher cost.

International Strategy is essentially a strategy in which a company sells the same products or services in both domestic and foreign markets.

Localization Strategy attempt to maximize local responsiveness, hoping that local consumers will perceive them to be domestic companies.

Global-Standardization Strategy attempt to reap significant economies of scale and location economies by pursuing a global division of labor based on wherever best of class capabilities reside at the lowest cost.

Global Strategy is a firm’s strategy to gain and sustain a competitive advantage when competing against other foreign and domestic companies.

Transnational Strategy, a strategy that attempts to combine the benefits of a localization strategy (high local-responsiveness) with those of global-standardization strategy (lowest cost position attainable); The transnational strategy is also sometimes sometimes called glocalization.

Foreign Direct Investment (FDI) is where you make investments in value-chain activities abroad.

Globalization Hypothesis by Professor Theodore Levitt which states...

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