ULUSLARARASI İŞLETME

Exporting refers to selling products which have been produced in one country to customers in the other country or countries. The correct answer is B.

Contractual alliances are based on contractual provisions. They include contract manufacturing, licensing, franchising, research and development contracts, joint marketing, consortia, turnkey projects, build-operate-transfer arrangements, and management contracts. The correct answer is B.

Equity alliances are built based on equity ownership. Minority equity alliances and joint ventures are the most common types of equity alliances in international business. The correct answer is D.

Licensing is a particular form of contract manufacturing that allows firms to commercialize intellectual property, such as patents, copyrights, and trade secrets (Rothaermel, 2017: 262). The correct answer is C.

A turnkey project refers to the export of technology, management expertise, and, in some cases, capital equipment. The correct answer is D.

There are many advantages of M&As (Peng, 2014:325-326): 1. M&As give a firm complete equity and management control, thus eliminating the problems associated with joint ventures. 2. This full control leads to better protection of proprietary technology. 3. M&As allow for centrally coordinated global actions. 4. M&As do not add new capacity. 5. M&As enable faster entry speed. The correct answer is C.

Contract manufacturing involves contracting for the production of finished goods or parts. These goods or components are then imported to the home country or other countries for assembly or sale. The correct answer is A.

A greenfield investment refers to an entry mode through which a firm invests directly in another country by establishing a new wholly-owned subsidiary. The correct answer is A.

The Eclectic Paradigm proposes a general framework for determining the extent and pattern of internationalization of the firm. The Paradigm embraces various explanations of the activities of firms engaging in cross-border value-adding activities. According to the Eclectic Paradigm, the capacity and desire of firms to go abroad depends on having or being able to acquire assets not available to another country’s firms.

According to the Eclectic Paradigm, the capacity and desire of firms to go abroad depends on ownership-specific and location-specific advantages. Ownership-specific advantages include having or being able to acquire assets not available to another country’s firms. Such assets refer to ownership-specific advantages because they are assumed to be unique to firms of a particular nationality of ownership. Location-specific advantages include assets that are peculiar to a specific location in their origin and use.

Assets refer to ownership-specific advantages because they are assumed to be unique to firms of a particular nationality of ownership. Assets include tangible resources, such as natural resources, equipment, and capital; and intangible resources, such as intellectual properties (e.g., patents, copyrights, and trademarks) and managerial or marketing skills. Alternatively, assets might be specific to a particular location (location-specific advantages) in their origin and use, such as lower costs of production, strict protection of property rights, and broader markets (Dunning & Lundan, 2008: 96). Many high-tech Western companies have manufacturing facilities located outside home countries. These facilities offer cheaper but also high-quality labor. Firms choose to internationalize either they have ownership-specific advantages or they seek for location-specific advantages.

Assets refer to ownership-specific advantages because they are assumed to be unique to firms of a particular nationality of ownership. Assets include tangible resources, such as natural resources, equipment, and capital; and intangible resources, such as intellectual properties (e.g., patents, copyrights, and trademarks) and managerial or marketing skills. Alternatively, assets might be specific to a particular location (location-specific advantages) in their origin and use, such as lower costs of production, strict protection of property rights, and broader markets (Dunning & Lundan, 2008: 96). Many high-tech Western companies have manufacturing facilities located outside home countries. These facilities offer cheaper but also high-quality labor. Firms choose to internationalize either they have ownership-specific advantages or they seek for location-specific advantages.

In the IP model, there are two types of variables: state and change. The change variables are the crucial ones since these processes change the characteristics of the focal firm and its environment and then trigger further changes. They involve knowledge development processes, including learning, creating and trust-building; and commitment processes, including reconfiguring resources and coordinating. The state variables include both operational (resources, skills, relationships, and organizational culture) and dynamic (integrating, building and reconfiguring competencies) capabilities, commitments (the distribution of resources over the firm’s functions, its product lines, the countries where it is active, and the networks in which it has invested), and the performance of the firm.

The internationalization process model sees internalization as a cyclical process between state (assets, capabilities, commitments, and performance) and change variables (knowledge development and commitment processes).

The LLL framework has three pillars: linkage, leverage, and learning. Linkage refers to connecting and making business with resource-rich companies or companies already active in the target market. The linkage can be affected through strategic alliances. Leverage refers to gaining access to resources which are outside the firm and which can be incorporated through specific tactics (Mathews, 2017: 771) including concentrating resources around strategic goals, accumulating resources more efficiently, complementing one kind of resource with another, conserving resources whenever possible, and recovering resources from the market-place as quickly as possible (Hamel & Prahalad, 1993). Learning refers to the repeated application of linkage and leverage. Firms from developing countries can gain advantages through repeated practices of linkage, leverage, and learning, which may be built up cumulatively through such processes (Mathews, 2006: 20).

In modern trade, first-mover advantage in setting the standards and rules can give a potent edge to companies and businesses. With its company executives working in close alliance with the government, China has adopted an aggressive multi pronged strategy to push its standards globally. An aggressive export drive helps to establish its technologies abroad.

First-mover advantages include catching learning effects, achieving economies of scale, and forging alliances with the most attractive local partner, and setting the standards and rules.

Late-mover advantages comprise free-riding on first movers’ pioneering investments, avoiding considerable technological and market related uncertainties, and evading being locked into a set of fixed assets or cannibalizing the existing product lines in favor of the new ones.

There are four significant motivations for firms to enter strategic alliances (Clegg, Kornberger & Pitsis, 2016: 568):

1. Transferring technology across borders more easily, 2. Accessing new markets by using the complementary resources of local firms, including distribution channels and product range extensions, 3. Leveraging specific capabilities of partners and saving costs of duplication, such as fixed costs, 4. Sharing risks among the alliance partners.

A build-operate-transfer (BOT) arrangement includes a firm or a consortium of firms contracting to complete a significant infrastructure project abroad, operates it for a specified period, and then transfers ownership to the project sponsor.

The Eclectic Paradigm presents a general framework for determining the extent and pattern of the internationalization of the firm. The correct answer is B.

Assets not available to another country’s firms refer to ownership-specific advantages because they are assumed to be unique to firms of a particular nationality of ownership. These assets include tangible resources, such as natural resources, equipment, and capital; and intangible resources, such as intellectual properties (e.g., patents, copyrights, and trademarks) and managerial or marketing skills. Alternatively, assets might be specific to a particular location (location-specific advantages) in their origin and use, such as lower costs of production, strict protection of property rights, and broader markets. The correct answer is A.