33:620:492 Lecture Notes - Lecture 11: Reverse Innovation, Prevailing Wage
2 Apr 2016
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Document Summary
Some moivaions for internaional expansion: increase size of potenial market for a irm"s products and services. Gain access to consumers in emerging markets: extend a product"s life cycle. Example: coke and pepsi have saturated the u. s. , but growth potenial exists in other countries: gain access to raw materials. Rio tinto has mining operaions on 6 coninents: opimize the locaion of value-chain aciviies. Beneit can be performance enhancement, cost reducion, or risk reducion (e. g. locaing manufacturing in other countries can reduce foreign currency risk: explore reverse innovaion. Innovaion in developing countries can be brought home to developed countries. Basic beneits of internaional expansion: increased market size. Opportunity for revenue growth: economies of scale and learning. Spread r&d and other costs over increased volume. Signiicant for auto, aircrat, pharmaceuicals: locaion advantages. Potenial risks of itnernaional expansion: poliical risks. Potenial naionalizaion of a irm"s resources: economic risks. Diferences and luctuaions in the value of diferent currencies.
