Summary Articles - International Strategic Management

Summary of all key concept from articles year 2020-2021.

Preview samenvatting (2 van de 7 pagina's)

1.Yao-Su Hu – The International Transferability of the Firm’s Advantages

To what extent can a firm with a strong position at home utilize its domestic strengths to create a
strong competitive advantage abroad? Definition: The firm’s advantages and disadvantages are defined as its strengths and weaknesses
either relative to the competition in a specific competitive arena or relative to an alternative to the
firm (viewpoint from the other party) in a particular context.
Relative to the arena, in one area might, in the other might not be relevant
Unique and difficult to imitate
Abilities are about competing not about superiority.

Advantages a firm has in home, can differ from host.
Always relative (varies)
Superiority depends
Country characteristics can give international advantage

Advantage creation in host country is unlikely because of local advantage, can only gain advantage if
firm is able to transfer some advantages from outside the target country that are not available to
local players.
Transfer
Firm-specific advantages
Assets
Shared general attributes/access to factors
Fails when it loses its’ value in the host country. Immobility:
Geographic specific
Tacit

Managerial implications for transferability of advantages:
1. Think about relative advantage
2. Non-transferable? Look for different level advantage
3. Non-transferable? Different mode of operation
4. Depends on country
5. Sustained investment (learning)
6. Not easy, requires effort

1.Wu. Z. & Salomon. R. – Does Imitation Reduce the Liability of Foreignness?
Linking Distance, Isomorphism and Performance.

One option to reduce the liability of foreignness, as a post-entry operational strategy, is to imitate
local, domestic competitors = local isomorphism.
Goal:
Reduce information asymmetry
Fit local institutional environment
Acquire legitimacy
Offset LoF

Drive for managers to adopt imitation:
Regulatory distance
Cultural distance
Economic distance

Examine: whether isomorphism mediates the relationship between distance and performance.
Identify mechanisms through which isomorphism can affect performance. Findings: partially.
- Foreign firms can mitigate regulatory and economic liabilities through isomorphism.
- Cultural distance remains negatively related to performance; tacit understanding local market is
critical.
- Foreign entrants gain legitimacy through isomorphism. Firms can then leverage their legitimacy to
expand the range of acceptable strategies the longer they are present. Dynamics are important in decision making: the optimality of a strategy can change with time and/or
experience. Benefits decrease with firm experience. 2. Johanson, J. & Vahlne, J-E. – The Mechanism of Internationalization

Uppsala Model = internationalization model = a process in which the enterprise gradually increases
its international involvement. This process evolves in an interplay between the development of
knowledge about foreign markets and operations + increasing commitment of resources to foreign
markets. Difference between Change and State (no change) aspects.
Causal cycle. Additional market commitment will be made in small steps with 3 exceptions:
Large resource base? Small commitment consequences (so easier)
Stable and homogenous market conditions? Relevant market knowledge gained in other
ways than experience
Considerable experience from similar market conditions? Generalize this to the specific
market

The internationalization process, once started, will continue no matter what. Because different
interests, some will pursue these.