GMS 522 Chapter Notes -Experience Curve Effects, Marketing Mix, Overproduction
The profit advantage: international sales perceived by firms to be a potential source of higher profit margins or of additional profits. However, actual profits and perceived profits are always different. Actual profits are usually quite lower as start-up costs are usually high. This can also be due to the firm"s inexperience in entering global markets. Having a unique product: many firms believe that they may have a unique product or that they may have a technological advantage over their competition. If this is the case, many firms in this situation will have a major competitive advantage which will result in major business success abroad. Technological advantages: having this used to result in long lasting benefits for a firm but in today"s markets, this is not the case. This is due mainly to the fact that there are many competing technologies and that there is a frequent lack of intellectual property rights protection in some key markets.