Exam 3 Flashcards
What causes companies to globalize?
The rapid transformation of the world marketplace forces companies large and small to look outward from their domestic markets.
What are the four major factors of globalization?
Market, Costs, Enviromental, Competitive
Market Factors of Globalization
Single global strategies can be developed for multiple countries that have similar demand conditions.
Cost Factors of Globalization
Avoiding cost inefficienties and duplication
Enviromental Factors of Globalization
The falling of barriers to trade; rapid technological advances.
Competitive Factors of Globalization
Prevention of competitors gaining undue advantage.
What are the proactive and reactive motivations for international business?
Reactivie: Done in response to another person’s action
Proactive: Take advantage of opportunities
What are the steps, in order, for strategic planning for global expansion?
(1) Assessment and Adjustment of Core Strategy
(2) Formulation of Global Strategy
(3) Development of Global Program
What is the difference between macro data and micro data?
Macro: Global/Country Market Analysis (Tariff information, U.S. Export/Import Data, Foreign Expot/Import data, Non-Tariff Information)
Micro: Industry within a market (Local laws, size of market, local standards and specs, distribution system, competitive activity)
What is the difference between primary and secondary data?
Primary: The collecttion and analysis of data for a specific research purpose through interviews, focus groups, surveys, observation, or experimentation.
Secondary: The collection and analysis of data originally collected to serve another purpose rather than the specific objectives of the firm.
What is the difference between qualitative and quantitative data?
Qualitative: Data that have been analyzed to provide a better understanding, description, or prediction of given situations, behavioral patterns, or underlying dimensions.
Quantitative: Data amassed in numerical order to search for statistical significance or trends.
What type of research is the most reliable when making predictions about how people will really act in real-life situations?
Experimentation
In order of expense and complexity, what are the different global market entry and development strategies?
Exporting/Importing, Liscensing, Franchising, Strategic Alliance and Joint Ventures
What are the four P’s of Marketing?
Product, Price, Place, Promotion
What are the advantages and disadvantages of global standardization and localization?
HELP!!
What are the factors that encourage standardization and what are the factors that encourage local adaption?
Standardization:
- Economies in product R&D
- Economies of Scale in production
- Economies in marketing
- Control of marketing programs
- “Shrinking” of the world marketplace
Local Adaptation:
- Differing use conditions
- Governemtn and regulatory influences
- Differing buyer behavior patterns
- Local initiative and motivation in implementation
- Adherence to the marketing concept
What is product positioning?
The perception by consumers of a firm’s product in relation to competitor’s products.
Why is international pricing more complicated than domestic pricing?
Government Influence, Different Currencies, Addtional Costs
What is a Supply Chain?
A complex global network created by a firm to connect its vendors, suppliers, other third parties, and its customers in order to achieve greater cost efficiencies and to enhance competitiveness.
Of all the different ways to set pricing, per our class discussion, what is generally the best way?
HELP!
What are the 11 C’s of channel desisgn?
Customers, Culture, Competitors, Company Objectives, Character, Capital, Cost, Coverage, Control, Continuity, Communication
What is the relationship between channel design and intermdeiary choice?
They connect producers and consumers.
What is the relationship between material management and physical distribution?
Material management and physical distribution both handle the movement of material. Both have goals of logistic management to result in maximum cost effectiveness while maintaining service goals and requirements.
What are the benefits of an efficient supply chain?
Increase customer satifaction
Save money
Reduce delivery lead times
Eliminate waste
What are the dimensions used to evaluate transportation modes?
Transit Time
Predictability
Cost
Non-Econonmic Factors
What are the effects of a company being able to reduce its order cycle time?
The customer service level will rise, and you will see an increase in product moved from the first step in the supply chain to the last quicker.
What is the relationship between order cycle time, inventory, cost of inventory, number and location of warehouses, customer service levels and customer satisfaction?
Sufficient inventory management
What are the stages of international involvment and who (structurally) does what at each stage?
- Little or no formal organization - Local resident expert or freight forwarders
- The International Division - Joint Staff
- The Global Organization - One leader (President, CEO)
Global Product Structure
Prouct divisions are responsible for all global activity
Global Area Structure
Geographic divisions are responsible for all global activity
Global Functional Structure
Departments are formed on the basis of functional areas, such as production, marketing, and finance
Process Structure
A variation of the functional structure in which departments are formed on the basis of production processes
Global Customer Structure
Divisions are formed on the basis of customer groups
Mixed Structure
Structure that combines two or more organizational dimensions
Matrix Structure
Uses functional and divisional structures simultaneously
What are the factors used to determine org structure and locus of decision-making in international organizations?
Its degree of involvement in international operations, The products the firm markets, The size and importance of the firm’s markets, The human resource capability of the firm
What factors should be considered when selecting managers for overseas assignments?
Compentence, Adaptability, Personal Characteristics, Adaptability screening and Orientation
What is the cost of maintaining a manager in an overseas assignment versus keeping her in a simlar role in the home country?
2 to 2.5 times more than keeping the manager in the home country.
Why will some countries in Africa continue to suffer economically?
Political instability and the resulting inability of many African firms to trade consistantly.Education, enviromental factors
Government intervention in international business affairs
Governments may intervene in the international business environment when certain international indexes or trigger mechanisms are met
Developed nations willingness to help debtor nations
Developed nations will continue to help the debtor nations to increase market opportunities.
Value of currencies
The international value of currencies will be greatly affected by market forces (investor trust, economic conditions, earnings perceptions, and political stability).
International Debt Burden of countries
The international debt load of the United States will continue to be of major concern and may require new dimensions be pursued in international business.
Technology’s affect on global business
High technology advances and the costs associated with leading edge technology will greatly impact global competition.
