Summary: Lecture 2
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Key features Uppsala Model
(A) distance can mean one of two things
(B) commitments should be increased slowly
(C) commitments are reversible. -
Born Global originated by...
McKinsey in 1993 -
What is the Born Global concept?
due to increased information, everyone – even the smallest players – has access to information about the export market, and can begin from its inception, without having to build a domestic base. (Information, Contacts, Knowledge, Globalisation) -
What is a business cluster ?
A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field (e.g. Silicon Valley). Clusters form because of spillovers or network effects. -
When is a country attractive?
Theoretically, a country will be attractive to a foreign investor if, in investing in that country, the investor gets a return that is equal to or higher than their risk-adjusted weighed cost of capital. -
country attractiveness framework - three major components
1. country risks
2. market opportunities
3. industry opportunities -
Country risks ( assessing country attractiveness)
a. political risks
b. economic risks
c. competitive risks
d. operational risks -
Political risks (country risks)
i. Shareholder Exposure: asset destruction, spoliation, and immobility
ii. Employee Exposure: kidnapping, harassment
iii. Operational Exposure: market disruption, labor unrest -
Economic risks (country risks)
i. Economic Growth
ii. Variability
iii. Inflation
iv. Input Costs
v. Exchange Rates -
Competitive risks (country risks)
business logics (cartels, corruption, networks)
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