International Business

1. What is a firm specific advantage?
A firm specific advantage is when a firm has an advantage compared to its competitors in terms of a higher productivity in tangible and intangible assets. This specific advantage can make the company stand out from its former competitors. A company with an easy codifiable knowledge can be cheaply transferred and effectively used abroad and it can easily be imitated by domestic firms. It’s better for a company to have tacit knowledge which eliminates the treat of the firm specific advantage being imitated, because it’s not like a manual that is read that can be analyzed and copied, it needs some sort of communication channel of a one to one conversation as an example.

  2. What is Honda’s FSA?
Honda’s firm specific advantages in the case of page 61-64 in the international business strategy book were a few. One being the management flexibility of reacting strategically to new challenges, such as its rise in the exchange rate. Honda was adaptation persistent, which gave them the success they are today. This persistency and risk, somehow makes Honda establish itself in unfamiliar industries and markets, one of them being starting a motorcycle manufacturing operation in the US, with not much agreement and consent but an innovative spirit. Honda has immense experience with internal combustion engines and green initiatives such as its CVCC engine permitted the regulated burning of a very lean mixture without the catalytic converter or exhaust-gas recirculation required by most other engines. Honda leverages and succeeds due to its tacit firm specific advantages.

  3. What basic but important distinction does Verbeke make?
In this chapter this important distinction is very insightful and there are many ideas which underlies around it. The distinction is made between non-location-bound FSAs versus location bound FSAs.

  4. Why are some FSAs location bound?
Some FSAs are location bound or in or in other words...