Spread Knowledge

Virtual University of Pakistan Video Lectures, Handouts, PPT, Quizzes, Assignments & Papers

MGT602 - Entrepreneurship - Lecture Handout 12

User Rating:  / 0

INTER NATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…)

LEARNING OBJECTIV ES

  1. To identify the aspects and importance of international entrepreneurship.
  2. To identify the important strategic issues in international entrepreneurship.
  3. To identify the available options for entering international markets.
  4. To present the problems and barriers to international entrepreneurship.

DIRECT FOREIGN INVESTME NT

The wholly owned foreign subsidiary has been the preferred mode of ownership for direct investment.

Minority interests The minority interest provides the firm with either a source of raw materials or a captive market for products. Entrepreneurs have used minority positions to gain a foothold in the market before making a major investment.
Joint ventures
Two firms get together and form a third company in which they share the equity. Joint ventures have been used by entrepreneurs in two situations:
1. When the entrepreneur wants to purchase local knowledge and an established facility.
2. When rapid entry into a market it needed. The keys to success of joint ventures have not been well understood. Reasons for forming a joint venture today are different than those in the past. Originally, joint ventures were used for trading purposes and were one of the oldest ways of transacting business. Joint ventures in the U.S. took the form of vertical joint ventures used by mining concerns and railroads. Motives for the significant increase in the use of joint ventures:

  1. To share the costs and risks of an uncertain project.
  2. To gain synergy between the two firms.
  3. To obtain a competitive advantage.
  4. To enter markets that pose entrance difficulties.

  5. Read more: MGT602 - Entrepreneurship - Lecture Handout 12

MGT603 - Strategic Management - Lecture Handout 42

User Rating:  / 0

STRATEGY EVALUATION

Learning objectives

This topic covers various aspects concerning with the strategy evaluation and enables you to understand the process of strategy evaluation.

Four Criteria (Richard Rummelt): He explains four criteria for strategy valuation. These four criteria are as follow

  • Consistency
  • Consonance
  • Feasibility
  • Advantage

Consistency
Strategy should not present inconsistent goals and policies.

  • Conflict and interdepartmental bickering symptomatic of managerial disorder and strategic inconsistency

Consonance
Need for strategies to examine sets of trends

  • Adaptive response to external environment
  • Trends are results of interactions among other trends

Feasibility
Neither overtaxes resources nor creates unsolvable sub problems

  • Organizations must demonstrate the abilities, competencies, skills and talents to carry out a given strategy

Advantage
Creation or maintenance of competitive advantage

Page 1 of 464