INTB 1203 Lecture Notes - Lecture 3: Experience Curve Effects, Comparative Advantage, Consumer Behaviour
15 Dec 2016
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Test 2: chapters 12, 13, 15, 16, 17. Practice questions: describe the global standardization strategy. The production, marketing, and r&d activities of firms pursuing a global standardization strategy are concentrated in a few favorable locations. Firms pursuing a global standardization strategy try not to customize their product offering and marketing strategy to local conditions because customization involves shorter production runs and the duplication of functions, which tends to raise costs. Instead, they prefer to market a standardized product worldwide so that they can reap the maximum benefits from economies of scale and learning effects. First, it avoids the often substantial costs of establishing manufacturing operations in the host country. Second, exporting may help a firm achieve experience curve and location economies. First, exporting from the firm"s home base may not be appropriate if lower-cost locations for manufacturing the product can be found abroad (i. e. , if the firm can realize location economies by moving production elsewhere).
