Evolving into Multinationalism.As a firm evolves from purely domestic into a true multinational enterprise, it must consider (1) its competitive advantages, (2) its production location, (3) the type of control it wants to have over any foreign operations, and (4) how much monetary capital to invest abroad. Explain how each of these considerations is important to the ­success of foreign operations.

Competitiveness of the Home Market.A strongly competitive home market can sharpen a firm’s competitive advantage relative to firms located in less competitive markets. Explain what is meant by the “competitive advantage of nations.”

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