BU491 Chapter Notes - Chapter 3: Factor Endowment
Document Summary
To achieve a sustainable competitive advantage, mnes need to develop layers of competitive advantage (global scale efficiency, multinational flexibility, and the ability to develop innovations and leverage knowledge on a worldwide basis). The challenge for most companies is to achieve all 3 of these simultaneously. Competitive advantage: developed by taking strategic actions that optimize a company"s achievement of these three different and conflicting goals. The mne"s strategic challenge therefore is to exploit all three sources of global competitive advantage (scale economies, national differences, and scope economies) to optimize global efficiencies, multinational flexibility, and worldwide learning. Global efficiency: overall efficiency is the ratio of the value of its outputs to the value of its inputs, not just cost reduction, also revenue enhancement. Multinational flexibility: the ability of a company to manage the risks and exploit the opportunities that arise from the diversity and volatility of the global environment. Macroeconomic risks: completely outside the control of the.
