International Business Guideline

Topics: Economics, Firm, Eclectic paradigm Pages: 6 (1260 words) Published: June 7, 2013
* OLI ECLECTIC PARADIGM AND INTERNATIONAL PROCESS
Questions need to answer:

1. Explains which types of firms are more likely to go abroad? 2. Impact of ownership specific advantages (firm), coupled with location specific (country factors) and internalization advantages (benefits of doing it alone)? 3. Does it explain things better than other theories? Why? 4. How useful is this theory? Suggest reading Brouthers, L.E., Brouthers, K.D., & Warner, S. (1999) Is Dunning’s eclectic framework descriptive or normative. Journal of International Business Studies, 30: 831-844. 5. Briefly describe Dunning’s eclectic paradigm. How accurately does it explain the firm internationalisation process? Provide examples.

Answer all these questions with separate sub-headings , please provide the IB theory and examples!!!

Guidelines for writing those points:
Historical Journey of OLI
* Dunning
* The make or buy decision
* MNEs value creation is related, directly or indirectly, to knowledge management. * A major source of MNE competitive advantage resides in the value-creating potential of relationships, i.e. critical resources that span its boundaries and are embedded in inter-firm routines and procedures. OLI

O = Ownership issues will increasingly revolve around issues of intangible assets and intellectual property rights (IPR). L = The governance of IPR will dominate location issues, just as property rights and the rule of law dominated FDI flows over the previous half century. I = International issues are related to managing risk associated with ever-larger R&D budgets required by a higher technological frontier, as well as reconciling the conflict between the bureaucracy of large MNEs and the creative environment required for knowledge production and use.

O = Ownership
* Firm Specific Advantages
* Why question – a firm need to go abroad?
* MNE has one or more “firm specific advantage”
L
* Country Specific Advantage : WHERE?
* Motive is to use the firm’s competitive advantage (core competency) in conjunction with factor advantages in a foreign country. * Using land, production factors (e.g. labor, land) MNE makes profits (earns rents) on its firm specific advantage. I

* How or organizational questions (how to go abroad?)
* Choices of entry mode, branding from the market (arm’s length) *
Usefulness of Dunning’s Eclectic Paradigm
* Offers a unifying framework for determining the extent and patter of foreign owned activities. * It posits that multinational activities are driven by three sets of advantages : OLI * Configuration of these sets of advantages that either encourages or discourages a firm from undertaking foreign activities and becoming MNE. * SAMSUNG CASE : Bi polar perspective, Western-centric model, Stage by stage internationalization process, OLI configuration to facilitate progressive IDP stages, ownership advantages of Global Born EMNE.

* Mode of Entry (Peng & Meyer, Chapter 11&12) – NEED TO KNOW

Questions need to answer:
1. What are the CHARACTERISTICS AND CONTRACTUAL ENTRY STRATEGIES? Describe the concept of ‘Licensing’ and ‘Franchising’. 2. What is the Differences and similarity between licensing and franchising? Explain the advantages and disadvantages of ‘Franchising’ as a mode of entry using the examples described in the Case ‘Subway and the Challenges of Franchising in China’. 3. Respective benefits and disadvantages of different entry modes 4. Indirect and direct (FDI) entry modes

5. Choice is influence by resources and experience of the firm (ownership specific advantages) as well as external environment 6. Choice is also affected by need for control vs growth

Answer all these questions with separate sub-headings , please provide the IB theory and examples!!!

Guidelines for writing those points:
* Contacting Licensing
Firm A’s agreement to...
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