Chapter 13 The Strategy of International Business

A firm's strategy can be defined as the actions that managers take to attain the goals of the firm.

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The preeminent strategic goal for most firms is to maximize the value of the firm for its owners and shareholders.

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The customer is able to garner the benefit of the consumer surplus because one firm is competing with other firms for the customer's business, so the firm must charge a lower price than it could if it were a monopoly supplier.

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According to Porter, the way to create superior value is to drive down the cost structure of the business and/or differentiate the product in some way so that consumers value it more.

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For a firm, all positions on the efficiency frontier are viable.

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Support activities are always less important than the primary activities in achieving a competitive advantage.

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The success of many multinational corporations is based not just upon the goods or services that they sell in foreign nations, but also upon the core competencies that underlie the development, production, and marketing of those goods or services.

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The skills within the firm that a competitor cannot easily match or imitate are known as the core knowledge base.

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Systematic increases in sales that have been observed to occur over the life of the product are referred to as the experience curve.

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One of the sources of economies of scale is the ability to spread fixed costs over a small volume.

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