In this assignment, the author would analyse the internationalisation of Fujifilm largely via local production. To do so, there would be considered three of the major internationalisation approaches, which have been considered as the most valuable for this case due to its practical appliance to the case study. The form of the analysis would be presented as following First of all, the main the theories’ basis would be introduced, immediately after the author would compare
the theory to the information given in the case study, where other theoretical information would be applied for after establish the validity of the theory to the case study. Once the three approaches have been established, the author would summarise the main point to end with a final conclusion.
Table of Contents
Introduction
The Transaction Cost Approach (TCA)
The Eclectic Framework (Dunning, 1998)
Summarise of the Main Points
Conclusion
Objectives and Topics
This paper aims to evaluate the strategic decision of Fujifilm to internationalize its operations primarily through local production. The analysis centers on identifying the driving forces behind this entry mode choice, specifically examining how cost efficiency, market demand, and competitive pressures against industry rivals like Kodak influenced the company's organizational structure.
- Strategic analysis of internationalization through local manufacturing.
- Application of the Transaction Cost Approach (TCA) in manufacturing entry modes.
- Evaluation of Dunning’s Eclectic Framework regarding ownership and location advantages.
- Assessment of competitive dynamics and market price sensitivity in the US.
- Integration of dynamic internationalization strategies to determine organizational timing.
Excerpt from the Book
International Trade theories
These theories explained the internationalisation of the firm as a series of incremental steps in which the company allocate resources as its knowledge and experience in the foreign market increase (Morgan and Katsikeas, 1997). Nevertheless, the reasons behind the commitment of these resources are varied.
According to the classical trade theory, the competitive advantages result from the differences in production costs which are attributed to the differences between countries in labour, capital and technology (Morgan and Katsikeas, 1997).
This supposition applies to Fujifilm´s decision to internationalise due to the organisation’s finance power and technology orientation, whilst keeping costs down with automatic procedures. However, this theory fails to explain the US choice as the organisation could have chosen another country with lower labour costs involved.
Summary of Chapters
Introduction: This chapter outlines the scope of the assignment, detailing the analytical framework used to study Fujifilm’s internationalization, which includes theoretical evaluation and practical application to the case study.
The Transaction Cost Approach (TCA): This section explores how transactional costs and the need for operational control drive the decision to maintain an owned manufacturing subsidiary versus outsourcing.
The Eclectic Framework (Dunning, 1998): This chapter applies Dunning’s OLI paradigm to Fujifilm, focusing on ownership advantages, location attractiveness, and the specific needs for control in the US market.
Summarise of the Main Points: A synthesised review of the theories applied, confirming that financial stability and the need for direct market involvement necessitated local manufacturing.
Conclusion: This final chapter synthesizes the findings, asserting that local production is the most adequate strategy for Fujifilm to manage quality, avoid trade disputes, and address local demand requirements.
Keywords
Fujifilm, Internationalization, Local Production, Transaction Cost Approach, Eclectic Framework, Kodak, Market Entry, Competitive Advantage, Manufacturing Subsidiary, Trade Theories, Strategic Management, US Market, Operational Control, Product Development, Foreign Direct Investment.
Frequently Asked Questions
What is the primary focus of this assignment?
The assignment analyzes Fujifilm's strategic decision to internationalize by establishing local production facilities in the US rather than relying on exporting or outsourcing.
What are the central themes discussed in the paper?
The core themes include international trade theories, transaction cost economics, the importance of maintaining brand quality, and the competitive necessity of pricing effectively against major rivals like Kodak.
What is the primary research objective?
The research aims to determine why Fujifilm chose local production as its primary mode of internationalization and how this decision aligns with the firm's strategic objectives of cost control and market penetration.
Which scientific methods or frameworks are utilized?
The paper employs the Transaction Cost Approach (TCA), Dunning’s Eclectic Framework (OLI), and the Dynamic Internationalization Strategies model (Kutschker & Baurle).
What does the main body of the work cover?
The main body examines the validity of classical trade theories and market imperfection theories in the context of Fujifilm, specifically comparing the benefits of owning a subsidiary versus contractual alternatives.
Which keywords best characterize this research?
Key terms include internationalization, Fujifilm, Transaction Cost Approach, Eclectic Framework, foreign direct investment, and competitive strategy.
How does Fujifilm's competition with Kodak influence its strategy?
The competition forces Fujifilm to maintain lower prices while avoiding import duties; establishing local production allows the firm to bypass these duties and better respond to US market demand.
What role does 'control' play in the firm's decision?
Control is critical to protect Fujifilm’s brand image, ensure that manufacturing standards are met, and manage the complex training procedures associated with their specific technological orientation.
- Quote paper
- Javier Garcia (Author), 2004, International Marketing Management and Exporting of Fujifilm, Munich, GRIN Verlag, https://www.grin.com/document/23127
