国际商务PPTChapter12.ppt

* * * * * * * * * * The answer is d. * The answer is b. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-* Question 3: A firm that wants the ability to engage in global strategic coordination should choose Franchising Joint ventures Licensing Wholly owned subsidiaries The correct answer is D. Did you get it right? * * * Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-* Firms with core competencies based on technological know how should avoid licensing and joint venture arrangements to avoid losing control over the technology. Sometimes however, a firm will engage in licensing even if it does run the risk of losing proprietary know how. Usually, this will be done if the firm believes that its technological advantage is only transitory, or that it can establish its technology as the dominant design. Matsushita was able to do this with its VHS technology, and then earn a steady stream of royalties. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-* Firms, like McDonald’s, that base their competitive advantage on management-know how, don’t run the same risks as firms with technological know-how. McDonald’s brand name is protected by trademarks for example, so it doesn’t have to worry about losing control over management skills. For these types of companies, licensing or franchising may be an attractive option. Joint ventures can also be a good alternative because not only are they often more politically acceptable than wholly owned operations, but local partners can also offer knowledge of the local market. * * * * * * * The answer is b. Classroom Performance System What is the main disadvantage of wholly owned subsidiaries? they make it difficult to realize location and experience curve economies the firm bears the full cost and risk of setting up overseas operations they may inhibit the firms ability to take profits out of one country to support competitive at