Summary International Business Strategy - Verbeke (1st Edition)


This summary contains brief summaries to chapters 1 t/m 14 and 16.

 

Chapter 1: the 7 concepts of the unifying framework

 

Most complex issues in international business strategy revolve around seven concepts:

See page 5, figure 1.1

 

MNEs (Multinational Enterprises) need certain internal strengths to overcome additional costs of doing business abroad, those are called: internationally transferable, or non-location bound FSAs (Firm Specific Advantages)

 

1. Internationally transferable FSAs/Non-Location-Bound FSAs

These FSAs will keep their value when an MNE is crossing borders.

 

There is a paradox of an internationally transferable FSA. When a FSA exists of easily codifiable knowledge, it is cheap and easily to transfer, but it can also be easily imitated by other firms. This makes the transfer costs low, but also the value that can be derived from it, may also be low. On the other hand, when a FSA exists of tacit knowledge, which requires person-to-person communication and sending human resources abroad to build up experience over time by learning, it will be expensive and time-consuming, but also difficult to imitate and thus a valuable FSA.

 

The most important bundle of tacit knowledge is contained in the MNEs heritage (the key routines developed by the firm since its inception). There are four archetypes of administrative heritage:

  • Centralized exporter = standardized products manufactured at home, embody the firm’s FSAs and make the exporting firm successful in international markets. This all happens without doing any activity in the host country, so no

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