Management Chap 4

Exporting

selling products to another country •Exporting - transfers products for sale in foreign countries. •The seller of such goods and services is referred to as an exporter; the foreign buyer is referred to as an importer.

Franchising

selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits •Franchising - providing a foreign organization with package of materials and services •Franchising is the practice of the right to use a firm's business model and brand for a prescribed period of time

Licensing

the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge Licensing - allowing an operation in another country to produce and sale company products

Globalization

the process by which businesses or other organizations develop international influence or start operating on an international scale.

A Borderless World

-organizations & managers are not isolated from international forces (trade barriers have fallen, communication is faster & cheaper, consumer tastes converge) -the difficulties and risks of borderless world are matched by benefits and opportunities -Business is becoming a unified, global field -Companies that think globally have a competitive edge -Domestic markets are saturated for many companies -Consumers can no longer tell from which country they are buying

Four Stages of Globalization

1. Domestic 2. International 3. Multinational 4. Global

acquisition

A merger is similar to an acquisition but refers more strictly to combining all of the interests of both companies into a stronger single company •Acquisition - Mergers and acquisitions (M&A) are transactions in which the ownership of companies and their operating units are transferred or combined

international markets

An international market is any geographical region where a company conducts business that is outside the territorial boundaries of a company's home country, while a domestic market is within the boundaries of its home country

Strategies for Entering International Markets

Exporting Global outsorcing Licensing Franchising Joint venture Acquisition Greenfied venture

International stage

Exports increase, company usually adopts a multi domestic approach

Domestic Stage

Market potential is limited to the home country, with all production and marketing facilities located at home.

7. Which of the following is a sociocultural factor in the international environment? a. Language b. Exchange rates c. Tariffs, taxes, and quotas d. Per capita income e. Infrastructure

a. Language

9. If you built a computer company in Africa and then found that your product was having difficulty being distributed to customers because of the road system, your problem would be related to a. an inadequate infrastructure. b. an economy incapable of supporting growth. c. a poor resource market. d. a poor product market. e. none of these

a. an inadequate infrastructure.

3. Which of the following is an entry strategy in which the organization maintains its production facilities within its home country and transfers its products for sale in foreign markets? a. Franchising b. Licensing c. Exporting d. Greenfield venture e. Joint venture

c. Exporting

joint venture

an agreement between two or more companies to share a business project •Joint Venture - is a business entity created by two or more parties, share ownership (60% / 40%) and shared returns (profit).

Market Entry Strategy

an organizational strategy for entering a foreign market

A nation's ____ includes the shared knowledge, beliefs and values, as well as the common modes of behavior and ways of thinking, among members of a society. a. power distance b. culture c. masculinity d. individualism e. uncertainty avoidance

b. culture

The management of business operations conducted in more than one country is called a. global management. b. international management. c. outsourcing management. d. planning management. e. domestic management.

b. international management.

5. Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your firm is willing to supply the equipment, products, product ingredients, trademark, and standardized operating system. What type of strategy are you going to use? a. Wholly owned foreign affiliate b. A greenfield venture agreement c. A franchise d. An export agreement e. Barter trade

c. A franchise

Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country? a. Franchising b. Licensing c. Market entry strategy d. Outsourcing e. Activity

d. Outsourcing

____ is normally used to classify countries as developed or developing. a. Exchange rates b. Interest rates c. Gross national product d. Per capita income e. Inflation rates

d. Per capita income

Today's companies compete in a ____. a. growingly domestic b. low-context culture c. high-context culture d. Greenfield economy e. borderless world

e. borderless world

A form of exporting to less-developed countries is called a. licensing. b. franchising. c. greenfield venture. d. joint venture. e. countertrade.

e. countertrade.

Global (or stateless) stage

making sales and acquiring resources in whatever country offers the best opportunities and lowest cost ownership, control, and top management tend to be disperse

Multinational stage

marketing and production facilities located in many countries, more than 1/3 of its sales outside the home country

global outsourcing

using suppliers outside the US to provide labor, goods, or services •Global Outsourcing - transferring the labor of specific tasks to low cost countries. Outsourcing refers to the way in which companies entrust the processesof their business functions to external vendors