FSAs are firm specific resources/capabilities that are needed to successfully compete against rival organisations. They can be tech-/ or knowledge based and are used to get and advantage i.e. in production or marketing.
Honda has a large selection of automobiles and motorcycles that covers a wide range of stakeholders worldwide
He distinguishes between non-location-based FSAs and location-based FSAs
They are unique to the location thus can not be transferred across borders.
It means that the Firm specific advantages can only be exploited in a specific location (a country, a city).
In 1996, the Japanese Firm Kao tried to expand to Europe and America. The reason for their failure was the dominant domestic position of the firm within Japan. The firm owned a wholesale distributor, called Hansha that only distributed Kao’s products. Given this fact, Kao had the ability to supply small shops and prevent outsider from entering the market. Furthermore, Kao could easily receive privileged information on consumers’ shopping habit. These circumstances were neither given in Europe nor America.
Honda profits from cheap labour and the Research and Development (R&D) centres.
How to create FSAs that can be transferred across borders while creating value – therefore being
successful in expanding to a foreign country.
He talks about the ability of a firm to process / combine resources better than other firms giving it a significant advantage on the market.
Physical resources, human resources, financial resources, up-/ downstream knowledge, administration knowledge and reputational resources
Unique resources give a firm an advantage over other firms that are set in the same field.
Those unique resources allow a firm to generate more value by meeting the stakeholders demands or by attracting more customers.
The ability of a firm to combine its resources in a unique way, meeting stakeholder demands.
Without a given routine the resources can not be combined in a way repeatedly to eventually create a FSA.
The ability to recombine an existing set of resources.
To stay competitive in especially foreign markets and to satisfy stakeholder needs in those foreign countries.
Recombining physical resources with downstream knowledge.
If a FSA is easily transferable it can also be easily copied by rival firms in the host country.
Advantages helping the firm to engage in a foreign environment.
Host country location advantages are important for recombining existing NLB FSAs to be abled to exploit them to their fullest extent.
Abundant natural resources, a superior education system or the presence of a demanding local market.
FSAs are hard to develop because you have to delevop an in depth-knowledge about your