1. What four factors are determinants of national advantage and serve as a basis for international business-level strategies?
There are four factors that can determine the national advantage from which the basis of international business-level strategies can be honed. These factors are: (1) factors of production, (2) demand conditions, (3) related and supporting industries, (4) firm strategy, structure, and rivalry. Factors of production define the relative availability of resources like land, labor and capital in the particular country.Demand conditions define the demand for the particular product manufactured by the firm in that country. Related and supporting industries define the allied industries that aid the growth of the main industry. For example, the automobile industry to flourish in a particular area requires the presence of the various component manufacturers with-in a short radius from the manufacturing hub so the transportation and otherrelated costs can be brought down.Firm strategy, structure and rivalry defines the amount of competitiveness in the particular industry, the structure of the industry and the strategy used by the firm in order to capture enough market share.
2.What are the three-international corporate-level strategies? What are the advantages and disadvantages associated with these individual strategies?
The three international corporate level strategies are: multidomestic, global, and transnational strategy.The multidomestic strategy tries to capture market share in each country in which it operates. Using this strategy, the firm comes up with products that suit the local needs. The advantage isthat it will typicallybuild the local market share; however its disadvantage is that it is less knowledge sharing and the inability to develop economies of scale.The global strategy advantage is that it can create more standardized products globally across the markets as well as it can create economies of scale. It also has an advantage that it can launch innovative campaigns and products across the markets as well Large multinationals particularly use this strategy. The disadvantage is that it cannot be differentiated or cannot be localized.The transnational strategy is a combination of multidomestic and the global strategy. The advantage is that the strategy is very flexible depending upon the requirements. The downsideis that it can lose touch with standardization, as well as profitability, as it tries to meet local needs for products.
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