1. Globalization Unit 6 http://www. youtube. com/watch
Business Analysis

2. Globalization:
The tendencies of the world’s economies to act as a single interdependent system.

3. Today
Businesses that once thought they were too small to expand outside their city have learned it’s possible
Overnight delivery
Conference calls
E-Commerce
Internet

4. Why:
What benefits would companies have from conducting business in a global economy?
Generate increased sales
Produce operational efficiencies – save $$
Exposure to new technologies
Provide greater consumer choice

5. Why Nations Trade Increases a nation’s total output
Offers lower prices & greater variety
Allows companies to expand their markets and to
achieve cost, production and distribution efficiencies.

6. What to Make? What to Trade?
Absolute Advantage
A nation’s ability to produce a particular item more efficiently than all other nations.
ExAmples:
Saudi Arabia & oil
*Comparative Advantage
*Opportunity Cost
Although a nation can produce many items, they should produce those items that it produces more efficiently or at a lower cost and trade for the others.

7. Measuring International Trade
Balance of Trade – The total value of the products a nation exports minus the total value of the products it imports over some period of time.

8. Why Not? The Challenges Cultural Differences Laws Consumer Preferences
Ethical Standards
Labor Skills
Politics and Economics

9. More on Cultural Differences:
Social Values
Business Customs
Language
Ideas of Status
Decision making habits
Use of Time
Use of Space
Eating Habits, etc.
Gift Giving
Business Attire
Greetings
Views on Competition
Politeness/Truthfulness
What is “taboo”?
Dealing with invitations
Eye contact, gestures,

10. Step 1 To Going Global:
Learning a country’s business customs and cultural differences!
Best done well in advance
Learn everything you can, including non-business information
What are some things you learned during your research?

11. Learn about the country
History
Religion
Politics
Customs/Traditions

12. Tips for Success W/ International Communication:*
Be alert to other people’s customs
Deal with the Individual
Clarify your intent and meaning
Adapt your style to meet their style
Expect differences in values, beliefs, expectations and mannerisms
DON’T stereotype, look at the person as an individual first!
Use examples and repetition don’t assume you know how to read their body language
Show Respect—Know their expectation

13. Legal Differences in Global Business
U S Laws
International Laws
Country-Specific Laws

14. Legal Differences in the Global Business Environment
In addition to understanding and obeying foreign laws, all companies doing international business must also comply with the 1978 Foreign Corrupt Practice Act.

15. The 1978 Foreign Corrupt Practices Act
Outlaws actions such as bribing government officials in other nations to approve deals.
It does allow small payments to officials for expediting routine government actions.
Not all agree with this!

16. What Level of Involvement?
Once a company decides to operate in the global marketplace, it must decide on the level of involvement it is willing to undertake.
The company must also develop strategies for marketing its products internationally

17. Five Common International Market-Entry Strategies.

18. Forms of International Business Activity
Purchasing goods and services from another county and bringing them into one’s own country : Selling goods or services to another country, Are the definitions of what?

19. International Licensing
Patents, trademarks, brand names, copyrights or trade secrets. In return for a rolayty
A license that entitles one company to use all or some of another companies intellectual property in exchange for a fee.

20. International Franchising
Fastest growing form of international activity.
The person who buys the franchise gets the right to duplicate a specific product or service.
Easy way to enter foreign markets minimizing costs & risks and bypassing some trade regulations

21. International Strategic Alliances/ Joint Ventures
A long term partnership between two or more companies to jointly develop, produce or sell products in the global marketplace.
They share ideas, expertise, resources, risks, management & profits (Oneworld)
Joint Venture –
Two or more firms that join together to create a new business entity that is legally separate from the parent companies. Yet, another way to expand one’s business globally

22. Foreign Direct Investment
Ownership and control of assets in foreign countries without working with locals.
Multinational Corporations (MNCs) corporations with a physical presence in numerous countries.

23. Challenges U.S. and European senior executives say they face when managing across different countries:
Changing individual behavior
Culture differences
Business practice differences
Headquarters are too remote
Labor law differences
Accounting and tax differences

24. Guided Practice
On the internet please find an example of each of the types of companies going global.
No McDonald’s
Explain the difficulties the company has faced with working across cultures in your own words.
Type written to be handed in.
Completed Individually