Lecture 1 — Strategic Tripod +
Internationalization
1. Core Focus of the Lecture
This lecture introduces how firms achieve and sustain competitive advantage
within international markets, using:
1. The Strategic Tripod:
o Industry-Based View
o Resource-Based View
o Institution-Based View
2. Key internationalization models:
o Uppsala (gradual expansion)
o Born Global (rapid expansion)
2. Competitive Advantage: Foundation of Strategy
Competitive advantage exists when a firm:
Creates more value for customers than competitors, or
Achieves lower cost for an equivalent offering
Advantage must be:
Sustainable → difficult for competitors to imitate or neutralize
3. Strategic Tripod
Performance differences between firms arise from three major sources.
All must be considered when operating internationally.
3.1 Industry-Based View (IBV)
Strategy must address external competitive forces.
Porter’s Five Forces
Threat of entry
Threat of substitutes
Bargaining power of suppliers
Bargaining power of buyers
Industry rivalry
,Firms succeed when they position themselves to neutralize these forces.
Example from lecture:
Tesla entered the car industry by altering industry logic:
o Differentiation in technology and branding
o Outsourcing and partnerships to overcome entry barriers
o Vertical integration in charging and sales
3.2 Resource-Based View (RBV)
Focus on internal strengths:
Resources + Capabilities → competitive advantage.
Definitions:
Resources
Tangible: finances, physical technology
Intangible: patents, brand, culture
Capabilities
Collective ability to deploy resources effectively
To sustain advantage, resources must be:
Criterion Meaning
Valuable Supports superior performance
Rare Few rivals possess it
Inimitable Difficult/costly to copy
Non-substitutable / Organizational No alternative can replace it + structure
support enables use
, VRIN/VRIO evaluation identifies resources that generate long-term advantage.
How RBV sustains advantage:
Impediments to imitation
Patents, trade secrets, brand reputation, economies of scale
Early-mover advantages
Learning curve, switching costs, network effects
3.3 Institution-Based View (IBV)
Institutions set the rules of the game:
Formal: regulations, legal systems
Informal: culture, societal norms
Even efficient strategies fail if they violate local expectations or regulations.
Legitimacy is essential when entering new countries.
The Three Views: Integrated Logic
Perspective Core Question
Industry-Based What does the external environment allow?
Resource-Based What can we uniquely do?
Institution-Based What is legitimate and acceptable here?
Strategy must be aligned with all three to succeed internationally.
4. Internationalization Drivers
International expansion is pursued to access location advantages.
Two macro perspectives:
4.1 Why are home-country firms internationally competitive?
Internationalization
1. Core Focus of the Lecture
This lecture introduces how firms achieve and sustain competitive advantage
within international markets, using:
1. The Strategic Tripod:
o Industry-Based View
o Resource-Based View
o Institution-Based View
2. Key internationalization models:
o Uppsala (gradual expansion)
o Born Global (rapid expansion)
2. Competitive Advantage: Foundation of Strategy
Competitive advantage exists when a firm:
Creates more value for customers than competitors, or
Achieves lower cost for an equivalent offering
Advantage must be:
Sustainable → difficult for competitors to imitate or neutralize
3. Strategic Tripod
Performance differences between firms arise from three major sources.
All must be considered when operating internationally.
3.1 Industry-Based View (IBV)
Strategy must address external competitive forces.
Porter’s Five Forces
Threat of entry
Threat of substitutes
Bargaining power of suppliers
Bargaining power of buyers
Industry rivalry
,Firms succeed when they position themselves to neutralize these forces.
Example from lecture:
Tesla entered the car industry by altering industry logic:
o Differentiation in technology and branding
o Outsourcing and partnerships to overcome entry barriers
o Vertical integration in charging and sales
3.2 Resource-Based View (RBV)
Focus on internal strengths:
Resources + Capabilities → competitive advantage.
Definitions:
Resources
Tangible: finances, physical technology
Intangible: patents, brand, culture
Capabilities
Collective ability to deploy resources effectively
To sustain advantage, resources must be:
Criterion Meaning
Valuable Supports superior performance
Rare Few rivals possess it
Inimitable Difficult/costly to copy
Non-substitutable / Organizational No alternative can replace it + structure
support enables use
, VRIN/VRIO evaluation identifies resources that generate long-term advantage.
How RBV sustains advantage:
Impediments to imitation
Patents, trade secrets, brand reputation, economies of scale
Early-mover advantages
Learning curve, switching costs, network effects
3.3 Institution-Based View (IBV)
Institutions set the rules of the game:
Formal: regulations, legal systems
Informal: culture, societal norms
Even efficient strategies fail if they violate local expectations or regulations.
Legitimacy is essential when entering new countries.
The Three Views: Integrated Logic
Perspective Core Question
Industry-Based What does the external environment allow?
Resource-Based What can we uniquely do?
Institution-Based What is legitimate and acceptable here?
Strategy must be aligned with all three to succeed internationally.
4. Internationalization Drivers
International expansion is pursued to access location advantages.
Two macro perspectives:
4.1 Why are home-country firms internationally competitive?
