Business School 101: Understanding the OLI Framework

What does the OLI framework stand for?

• Ownership, Location, Internalization

• Organization, Leadership, Innovation

• Opportunity, Leverage, Integration

• Operation, Logistics, Investment

Which of the following is NOT considered an ownership advantage?

• Proprietary information

• Brand reputation

• Patent rights

• Cheap labor

Why is it important for a company to have an ownership advantage?

• To reduce production costs

• To improve employee satisfaction

• To overcome the liability of foreignness

• To increase market share

What is a key factor in determining location advantage?

• Patent rights

• Brand recognition

• Availability of skilled labor

• Proximity to headquarters

Which model can be used to determine location advantages?

• Porter's Diamond Model

• SWOT Analysis

• PESTLE Analysis

• BCG Matrix

What does internalization advantage help a company decide?

• Whether to hire more employees

• Whether to increase product lines

• Whether to produce in-house or outsource

• Whether to enter a new market

What is a reason for a company to outsource production?

• To focus on other value chain activities

• To maintain control over production

• To increase brand value

• To reduce the risk of intellectual property theft

Why did Tesla choose to build a factory in Shanghai?

• To increase brand recognition

• To collaborate with local companies

• To avoid import duties

• To access cheap labor

What is a major competitive advantage for Tesla?

• Its large number of factories

• Its unique technology and brand image

• Its partnerships with local companies

• Its low-cost production methods

What risk does Tesla avoid by internalizing its manufacturing in Shanghai?

• Decreasing brand value

• Losing market share

• Losing intellectual property

• Increasing production costs