Marketing Chapter 8

Which global entry strategy has the most risk and why?

Direct investment requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. This entry strategy requires the highest level of investment and exposes the firm to significant risks, including the loss of its operating and/or initial investments

Which global entry strategy has the least risk and why?

Exporting requires the least financial risk but also allows for only a limited return to the exporting firm. Global expansion often begins when a firm receives an order for its product or service from another country, in which case it faces little risk because it has no investment in people, capital equipment, buildings, on infrastructure.

What types of governmental actions should we be concerned about as we evaluate a country?

Tariffs, quotas, boycotts, exchange controls, and trade agreements

What metrics can help analyze the economic environment of a country?

The general economic environment, the market size and population growth rate, and real income.

What are the three global product strategies?

1. Sell the same product or service in both the home country market and host country 2. Sell a product or service similar to that sold in home country but include minor adaptations 3. Sell totally new products or services

Why are each of the BRIC countries viewed as potential candidates for global expansion?

Brazil's ability to weather, and even thrive during, the most recent economic storm, has transformed it into a global contender. Russia has undergone multiple up- and downturns in its economy. However, its overall growth prospects appear promising, especially as a consumer market. With more than 1.2 billion people, or approximately 15 percent of the world's population, together with expanding middle and upper classes, India is one of the world's fastest growing markets. China's leadership, while maintaining communist political ideals, has embraced market-oriented economic development, which has led to startlingly rapid gains

What are some important cultural dimensions?

Cultural Dimensions include power distance, uncertainty avoidance, individualism, masculinity and time orientation

What are the components of a global marketing strategy?

Determining the target markets to pursue and developing a marketing mix that will sustain a competitive advantage over time.