Objectives
0422.11.6 Analyze how cultural, economic and political factors impact businesses engaged in international trade.
Doing Business Internationally Growing with increased acceptance
of capitalism around world Advances in technology (Internet) Reduction of Trade Barriers Instantaneous global news coverage
Ways to Get Involved in International Trade Importing Exporting Licensing Contract Manufacturing Joint Ventures
Foreign Direct Investment Multinationals Mini-nationals
Ways to Get Involved in International Trade Importing – purchasing goods from a
foreign country Meet same standards as domestic
products Quota’s can limit entry of some
products Hire Customs Broker – specialists
licensed by US Treasury Department Know laws, procedures and tariffs Handle 90% of all imports
Ways to Get Involved in International Trade Exporting – selling domestic goods
in a foreign country Minimal risk and control Help from government through
BuyUSA site
Ways to Get Involved in International Trade Licensing – letting another
company us a trademark, patent, special formula, company name or other intellectual property for a fee or royalty
Franchising
Intellectual property is divided into two categories: Industrial property, which includes
inventions (patents), trademarks, industrial designs, and geographic indications of source
Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs
Ways to Get Involved in International Trade Contract Manufacturing – hiring a
foreign manufacturer to make your products according to your specifications
Pay lower wages Proprietary information must be
given to foreign companies Golf club head molds stolen in China and
copies of knockoff made
Ways to Get Involved in International Trade Joint Venture – business enterprise
that companies set up together Some countries do not allow foreign
investors to own 100% of a business Companies must find a “local”
business partner
Ways to Get Involved in International Trade Foreign Direct Investment –
establishment of a business in a foreign country
Sony – Japanese company $8 billion in China 11 manufacturing plants in United States
Ways to Get Involved in International Trade Multinationals – large corporations
that have operations in several countries
Proctor & Gamble Nike PepsiCo Coca-Cola
Ways to Get Involved in International Trade Mini-Nationals – midsize or smaller
companies that have operations in foreign countries
Difference in investment in factories, offices, other facilities
Graphic Organizer
Prepare a graphic organizer that lists the factors that are used to evaluate a countries marketing opportunities and threats. Political Factors Trade Regulations and Laws Economic Factors Socio-Cultural Factors Technical Factors
Global Environmental ScanPolitical Factors Government Stability Type of Government Trade Agreements Foreign Investment Opportunities
Global Environmental ScanTrade Regulations & Laws Percentage of Business Ownership
Allowed Laws to protect Intellectual Property
Global Environmental ScanEconomic Factors Infrastructure Labor Force Employee Benefits Taxes Standard of Living Foreign Exchange Rate
Global Environmental ScanSocio-Cultural Factors Language & Symbols Holidays & Religious Observances Social & Business Etiquette
Global Environmental ScanTechnological Factors Measurement System Electrical Voltage Standards Telephone/Internet Access Computers/Faxes/Voice Mail/Cellular
Phones Radio/Television
CIA's World Fact Book web site
Global Marketing Strategies Globalization – selling the same
product and using the same promotion methods in all countries
Common need that transcends different cultures
Coca-Cola Microsoft
Global Marketing Strategies Adaptation – using an existing product
and/or promotion with changes made to better suite the characteristics of a country or region
Product Adaption – change some aspect of actual product for different markets
Promotion Adaption – change some part of promotional message for different markets Chevy Nova means “no go” in Spanish
Global Marketing Strategies Customization – creating specially
designed products or promotions for certain countries or regions
Global Marketing Strategies Activity Textbook page 88 Global Marketing
Strategies Read the examples listed. What is your first impression of each
product advertisement?
Review Assignment
Textbook page 89 After You Read Questions #1, 2, & 3
Answer questions in complete sentences on the back of the global scan graphic
Textbook page 91 Review Facts and Ideas Questions # 6, 8, 9, & 10
Answer questions in complete sentences
Writing Review Assignment Explain the difference between
customization, globalization and adaptation.
Mini-Quiz
1. _____ refers to the fact that all countries depend on each other for resources that they themselves lack.
2. Two types of advantages in international trade are comparative and ____.
3. A trade deficit occurs when a country’s ____ are greater than its ____.
Mini-Quiz
4. The business activity in the global market that carries the lowest risk is _____.
5. Offering a product for sale world-wide without making any changes or modifications to the product is called ____.
Mini-Quiz
1. Interdependence refers to the fact that all countries depend on each other for resources that they themselves lack.
2. Two types of advantages in international trade are comparative and absolute.
3. A trade deficit occurs when a country’s imports are greater than its exports.
Top Related