1. International Marketing: Chapter 6 Key Concepts Global political change The nature of global political systems Political risks Economic risks Political sanctions Forecasting political risks Strategies for lessening political risks

2. Global Political Change u Political and economic integration u Technological integration u Conflict

3. Global Political System u No formal set of rules u No formal hierarchy of relationships u Only dynamic relationships –Who are the players? –Who has the most power?

4. Five Main Political Causes of International Marketing Instability u Unstable foreign governments u Changes in political parties in host countries u Nationalism u Animosity towards specific countries u Conflicts between governments

5. Political Risks u Confiscation u Expropriation u Domestication

6. Economic Risks u Exchange controls u Local content laws u Import restrictions u Tax controls u Price controls u Labor problems

7. Political Sanctions u One or more nations may boycott another nation –U.S. boycotts of trade of Cuba and Iran –U.S. sanctions against North Korea u Sanctions are usually unsuccessful

8. Forecasting Political Risk u Political risk assessment u Government failure is greatest risk

9. Strategies for Lessening Political Risk u Joint Ventures u Investment Base Expansion u Licensing u (Planned) Domestication u Political Bargaining u Political Payoffs