BU398 Lecture 7: Class 7-International Organizations
Document Summary
Challenges/ what needs to be done in building global capacity. There is an increased complexity and differentiation globally e. g. customer preferences, different political systems. Essentially , these are ways to fix vertical/ horizontal linkages, but brought at a wider/ global perspective. Make sure all information is communicated amongst these geographically divided companies. Economies of scale (increasing size, lowering costs; e. g. , volume discounts from suppliers) If you increase size domestically enough, maybe you want to go internationally. Economies of scope (number/variety of products, services, markets, countries; - e. g. , worldwide marketing group able to service a global organization) Low-cost production factors (opportunity to obtain resources at lower costs; reduced government restrictions) Competitive issues in each country are independent of other countries (i. e. , the company deals with each country individually) Strategic alliances can help companies get involved in international operations. Separate entity created with two or more active firms as sponsors (e. g. , competitors joining forces to compete globally)
