Final Exam Study Guide CH. Highest Score A.

1. a firm can use a combination of exporting and wholly owned subsidiaries -allows firms to achieve location and scale economies (but still remain in control over product manufacturing and distribution) cost reduction strategy achieving lower costs than industry incumbents through process improvements Local responsiveness (LR) strategy Globalization strategy that emphasizes adapting to the needs of local markets and allows subsidiaries to develop unique products, structures, and systems. cost reduction pressures 1. harder to reduce the price of commodities as price is the main competitive weapon -especially noticed with universal needs and conventional products Universal Needs needs that exist when the tastes and preferences of consumers in different nations are similar if not identical conventional needs 1. chemicals 2. petrolium 3. sugar 4. steel local responsiveness pressures arise in national and regional differences in consumer taste and preferences Differences in Consumer Tastes and Preferences strong pressures for local responsiveness emerge when consumer tastes and preferences differ significantly between countries Differences in Distribution Channels a firm's marketing strategies needs to be responsive to differences in distribution channels between countries Host Government Demands