Globalization Case

Globalization has already realized. Investment to abroad is conducting vigorously as form of foreign direct investment, joint venture, licensing contract, and so on. These days, the competition gets more and more intensive. Without competitive advantage, firms have little possibility of survival. Even they survive in harsh competition, no one can guarantee their performance. Firms have a limited asset like knowledge and experience in host and home country. Also, they have no fully research and development ability to cope with lack of asset. So, international alliance is necessary in these situations.

International alliances make up for firm's insufficiencies. International alliances provide new knowledge and complementary knowledge to need focal firm. And they also provide experiential knowledge which they have not been for experience. So, they learn each others and share the information.

International alliances contain not only joint venture, but also parent and subsidiaries, licenses relationship, strategic alliances with no ownership. To successful alliance, there are some encouraging factors. Though alliances give a lot of benefit, they are not always successful. There also exist some obstacle factors. Here, I will analyze these factors and its effect on knowledge transfer.

Foreign Market penetration through the Internet, is not possible, because market penetration requires a local presence. Second, using Internet allows for a skimming of foreign market. Clearly, the internet has a vast potential for facilitating firm`s acquisition of objective knowledge, whereas its role as a provider of experiential Knowledge is much more questionable. Third, Internet has amount of information and easily accessible, but quality or usefulness is not good. Forth, the Internet may do adverse selection due to wrong information or wrong mediation.