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International Business > Regional Focus > Flashcards

Regional Focus Flashcards

1
Q

Why did China fail (until 1950) to react adequately to the Western technological Challenge?

A

, mainly because the ideology, mindset and education system of the bureaucracy promoted an ethnocentric outlook, indifferent to developments outside China

weil die Ideologie, Denkweise und das Bildungssystem der Bürokratie eine ethnozentrische Ausrichtung förderten, die gegenüber Entwicklungen außerhalb Chinas gleichgültig war.

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2
Q

Show the development of the China GDP

1820 –> 1913

A
  • in 1820 the GDP had accounted for 32% of the world GDP
  • by 1913, it had declined dramatically to only 9% of world GDP
  • in this periode the economies of Europe and the US surged ahead
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3
Q

China’s current economy

5 Problems

A
  • real estate bubble
  • stock market bubble
  • municipal dept
  • excess capacity (cheep credit, boost from governement)
  • capital flight
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4
Q

China

major exports

and

imports

A

major exports:

  • computers, broadcasting equipment, telephones

major imports:

  • crude petroleum, intergrated circuits, iron ore, gold, cards
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5
Q

Name the 3 biggest reason “why foreign companies fail in China”

A
  1. Not understanding the market and culture (consumer behaviour, internet, …)
  2. Picking the wrong / ingnoring the right local Partner
  3. not playing nice with the government
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6
Q

China:

How many companies fail and withdraw from china in 2 years?

A

48% of foreign corporations fail an withdraw from china within two years

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7
Q

China:

Top 5 Business Challenges for foreign Companies?

Survey

A
  • Inconsistenc regulatory interpretation and unclear laws
  • rising labour costs
  • regulatory compliance risks
  • shortage of qualified employees
  • increasing chinese protectionism
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8
Q

China:

Which advantages do the chinese companies have over the foreigner?

A
  • cost advantages
  • price
  • government and other guanxi
  • unethical behaviour
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9
Q

China:

Which advantages do the foreigner companies have over the chinese?

A
  • brand
  • product
  • technology
  • marketing and sales
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10
Q

China:

Outlook for Business Opportunities

ZF

A

− Over 50% of Swiss, EU, and US companies stated an intention
to increase investments in China in 2017.
− China once again ranks as a top investment priority for
Swiss firms, with 57% of managers of Swiss subsidiaries
considering China to be a top 3 investment priority, in contrast
to 48% in 2016.
− Foreign SMEs are expecting higher profits in substantially
greater numbers than last year.
− Testament to the ability of Western companies of all sizes to
compete and succeed in China.
− All but american managers are looking optimistically towards
the next five years (election of D. Trump may have caused a
more cautious response).

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11
Q

China:

Explain “Guanxi”

A

“Guanxi] describes a relationship that is established between people or organizations with the aim of obtaining personal advantages.

„[Guanxi] beschreibt eine Beziehung, die zwischen Menschen oder Organisationen mit dem Ziel aufgebaut wird, sich persönliche Vorteile zu erschleichen

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12
Q

India:

The DISadvantages of being a grey economy

A
  • Roughly 90% of India’s economic activities happen in the informal sector: not listed, unorganized, poorly capitalized on, not taxed, legally unprotected
  • 9 in 10 workers are estimated to work in the grey economy (the finance ministry of India thinks the figure may be lower)
  • Businesses in the informal sector employ two-thirds of all manufacturing workers, at far lower pay than in those in the formal sector
  • In the World Bank’s “Ease of doing business” annual report, India ranks at a miserable position of 172th out of 190 for paying corporate taxes
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13
Q

India:
Facts of the onverburdened judiciary

A
  • A relatively weak executive and slow parliament are a large burden on the judicial pillar
  • India’s judiciary is opaque, slow and understaffed:
  • There are only 14 judges per million people (USA: 107 per million)

Thousands of unfilled judicial job positions, including 31 judgeships in the Supreme Court

  • approximately 30m legal cases pending,
  • 6m of which have been stuck in the courts for five years or longer
  • 2/3 of the 400,000 inmates in Indian prisons are yet to be convicted of any crime

Result: the combination of an overburdened judiciary with widespread corruption, the Indian citizen deeply distrusts the country’s judiciary

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14
Q

India

Digital Transformation

Grafik

A
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15
Q

India:

Electronic Payments

Facts

A
  • Early 2017: almost none.
    January 2018: over 150m transactions per month
  • The Indian taxman should love it: electronic transactions leave a digital trail that makes it harder to do business informally
  • The government should love it too: less corruption and better criminal prosecution
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16
Q

India:

How many unbanked people?

A

estimated 233 million

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17
Q

India:

How many non-cash transactions in % of all transactions?

A

22%

but might overtake cash transactions in 2020 –> rise of digital payment

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18
Q

Middle East:

Facts About the Arab League

A

Founded 1945 –> 22 Country memebers (Egypt, Saudi, Quatar, Kuwait, Iraqu, Syria…..)

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19
Q

Middle East:

Arab League

Grafik

A
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20
Q

Middle East:

6 UN Languages

Grafik

A
21
Q

Middle East:

Gulf Cooperation Council

Facts?

A

is a regional intergovernmental political and economic union established in 1981 and consisting of:

Kuwait, Bahrain, Quatar, Oman, Saudi Arabia, United Arab Emirates

Objectives:

  • Similar regulations: religion, finance, trade, customs, tourism, legislation, administration
  • fostering scientific / technical progress of the miliatry
  • encouraging cooperation of the private sector
  • strengthening ties between their peoples
  • establishing common currency
22
Q

Middle East:

Geopolitical importance is coming from:

A
  • Geopolitical position: connected to 3 continents, Chokepoints & energy routes.
  • Demography: Pyramid, youth (jugend) and migration
  • Democracy and stability: Index
  • Conflicts and military spending
  • Natural Resources: Position (routes), oil and energy, minerals, tourism, manpower.
  • Scarcities (Mängel): Water, Food, knwoledge societies
  • Discussion: reasons behind Arab Springs and the economic costs of it.
23
Q

Middle East:

Strait of Hormuz

Facts?

A
  • The Strait of Hormuz is the world’s most important oil Chokepoint; about 30% of all global seaborne-traded oil cross the strait (17/59 mb/d).
  • More than 85% of the crude oil that moved through this chokepoint went to the Far-East (Osten Asiens)
24
Q

Middle East:

Air traffic density?

A
  • By 2034, the fleet of passenger and freighter aircraft in the ME region will treble: 2,950 aircrafts.
  • The total aircraft movements to and from and within the ME region (36 airports) is estimated to increase to 2,346,000 in 2025.
  • Aircraft movements in the ME region will go up 5.2 per cent annually by 2030
  • Gulf airports are expected to handle 450 million passengers by 2020.
25
Q

Middle East:

Population vs. MENA und EU

Demografische Pyramide

Grafik

A
26
Q

Middle East:

Share of population as foreigners

Grafik

A
27
Q

Middle East

Youth unemployment in the MENA?

A

> 30%

–> highest in Libya, Iraq, Oman

28
Q

Middle East:

Improvement of democracy?

A

The Middle East and North Africa (MENA) and Sub-Saharan Africa (SSA) have recorded a very modest improvement in their regional average scores for democracy between 2006 and 2014, but from very low bases indeed, and democracy in both regions weakened between 2013 and 2014.

29
Q

Middle East:

Democracy?

Grafik

A
30
Q

Middle East

Water Issues

Facts?

A
  • In most countries agriculture accounts for over 2/3 of total water use.
  • The corollary of decline of agriculture, and with it water, is the declining centrality to the political economy of the modern Middle East.
  • As processes of globalization deepen, and Middle Eastern states and ruling classes become more and more dependent on, and oriented to, external sources of capital, so the domestic agricultural sector becomes less and less politically significant.

Die Folge des Rückgangs der Landwirtschaft und damit des Wassers ist die abnehmende Zentralität der politischen Ökonomie des modernen Nahen Ostens.

31
Q

Middle East:

GCC Countries

A

Gulf Cooperation Council (GCC), political and economic alliance of six Middle Eastern countries—Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman

32
Q

Middle East

Military Expenditures

A
33
Q

Middle East:

What are the Reasons behind the Arabic spring? (4)

A
  • Political Situation
  • economic situation
  • lack of freedom
  • lack of perspectives
34
Q

Middle East:

Cost of Arab Spring (2006)

4 Facts

Grafik

A
35
Q

Middle East

Global Competitiveness Index Rankings

Grafik

A
36
Q

Middle East:

Global Manufacturing Competitiveness Index

Grafik

A
37
Q

Middle East:

Family Businesses

Facts?

A
  • 90% of the companies are family-owned businesses
  • Fam. own. bus. generate 80% of the regions GDP
  • Fam. own. bus. employ 70%
  • Fam. own. bus. controll 98% of the oil production in the gulf region
38
Q

Middle East:

Why are Fam. own. Bus. are so important?

Cultural Resons / Economic Reasons?

A
  • Cultural reasons: old traditions of tight family links, clans and family structure of the society, image and status are related to the family.
  • Economic reasons: no dilution (Verdünnung) of wealth, keep business secret, difficulties facing traditional SMEs if not based on family structures.
39
Q

Middle East:

Islam an Business

12 Facts?

A
  1. Prohibition of Interests (Riba)
  2. Prohibition of Uncertainty (Gharar)
  3. Prohibition of gambling and speculation
  4. Prohibited sectors for investments activities (weapons, gambling, sex, alcohol, etc)
  5. Prohibition of selling debts
  6. Mobilization of funds: Partnership between banks an depositors as well as investors
  7. Freedom of ownership and entrepreneurship
  8. Government involvement in the market
  9. Role of Labor as essential contributor to wealth generation
  10. The institution of Charity as a wealth distribution tool and as expression of social solidarity
  11. Avoidance of wasteful use of resources during the economic cycle.
  12. Governance in financial operations: compliance to Islamic rules including:  Possible Shari’a Boards  All transaction should be Documented  Sanctity of contracts  No embedded contracts within other contracts  No sales of in-existing or un-owned object  All elements of a sale (contract, good, price, delivery) must be known at the time of contracting
40
Q

Middle East:

Key Player in Halal Industry

Name some?

A
  • Nestle – world’s largest food manufacturing corporation
  • McDonalds –the world’s largest leading restaurant chain
  • KFC – fully integrated poultry chain
  • Tesco & Carrefour – world’s number one & two retail chain
41
Q

Middle East: Arabs Culture Identify

Status consciousness related to ?

A
  1. Status consciousness related to sources of power which are:
    a. Family and tribe (Stamm)
    b. Relationship to state apparatus
    c. Position and relationship in the organization
    d. Degrees and qualifications
    e. Financial situation
42
Q

Hofstede’s cultural dimensions

A
  1. Power distance: the degree to which the less powerful members of a society accept and expect that power is distributed unequally
  2. Individualism/ collectivism: is about the relative importance of individual versus group interests
  3. Masculinity/ femininity: is about what values are considered more important in a society. The Masculine side of this dimension represents a preference in society for achievement, heroism, assertiveness and material rewards for success.
  4. Uncertainty Avoidance: the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity
  5. Time orientation: maintain some links with its own past while dealing with the challenges of the present and the future.
  6. Indulgence (Genuss): the extent to which people try to control their desires and impulses, based on the way they were raised
43
Q

Middle East

Hofstede Cultural Dimensions

Country Comparison

Grafik

A
44
Q

What means

High context vs. Low Context?

In Cultures?

A

High Context:

High context: Communication tends to be indirect, harmoniously structured and understated (zurückhaltend).

Low Context:

Communication tends to be linear, dramatic, precise and open

45
Q

High vs. Low Context

Country Comparison..

Grafik

A
46
Q

Middle East

The basic of Muslims’ faith

A

• Belief in One and unique God • Belief in Angels • Belief in Prophethood • Divine books as revealed by God to various prophets • Qadar (fate, destiny) • The Day of Judgment • Life after Death  Heaven and Hell • Every one is responsible for himself, no one can bear the burdens of another

47
Q

Middle East

Forbidden in ISLAM

A

 Meat of animals found dead or carnivores (dogs, lions, cats..)

 Meat on which the name of God is not invoked at the time of slaughtering or meat on which some one else’s name was invoked.

 Blood and blood products.

 Pork or any of its components.

 Alcoholic beverages (such as beer and wine) and any similar intoxicants under any form like Drugs.

 The quantity of forbidden food is irrelevant.

 Exceptions to these rules: in extreme danger of death or medical prescription due to lack of alternatives.

48
Q

China

Reform and Opening

  • who?
  • what?
  • what improved (besides economy growth)?
A

Who:

Gaige Kaifang und Deng Xiaoping (father of economic reform)

What:

Four Modernization programm (agriculture, industry, defence, sience)

–> economy grew rapidly

+ great improvement of industrial output

+ higher standards of living

49
Q

Upsala Model

The Steps?

A

Domestic Focus

Pre-Export stage

Experimental involvement

Active Involvement

Commited Involvement

International Business (7 decks)

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