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  • EXAM: If I ask you what are 4 modes of entry into a foreign country, you can say:Export, international licensing & franchising, specialized modes/strategic alliance, and FDI.He said to combine international licensing and franchising into 1, and that 'strategic alliance' is a better word for 'specialized modes’
  • 550 finalpptx

    1. 1. MG 520 International Business Management<br />Slides Highlighted for Final Exam<br />
    2. 2. 1-2<br />WHY: Contemporary Causes of Globalization<br />Strategic Imperatives<br />To leverage core competencies<br />To acquire resources and supplies<br />To seek new markets<br />To better compete with rivals<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    3. 3. 1-3<br />HOW: Four Ways of Expanding Internationally<br />Figure 6.6<br />Source: <br />
    4. 4. 3-4<br />The Political Environment <br />Political Risk<br />Ownership<br />risk<br />Transfer<br />risk<br />Operating<br />risk<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    5. 5. 3-5<br />Intellectual Property<br />Patents<br />Copyrights<br />Trademarks<br />Brand names<br />Intellectual property often forms the basis of a firm’s competitive advantage!<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    6. 6. 4-6<br />Hofstede’s Five Dimensions<br />Social Orientation<br />Power Orientation<br />Uncertainty Orientation<br />Goal Orientation<br />Time Orientation<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    7. 7. 5-7<br />Nature of Ethics in International Business<br />Ethics are an individual's <br />personal beliefs about whether <br />a decision, behavior, or action <br />is right or wrong. <br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    8. 8. 5-8<br />Social Responsibility: Balancing Commitments to Stakeholders<br />Employees<br />Investors<br />Customers<br />Government<br />Local Communities<br />Stakeholders: Groups, individuals, and organizations that are directly affected by the practices of an organization<br />CORPORATION<br />
    9. 9. 6-9<br />Classical Country-Based Trade Theories<br />Mercantilism<br />Absolute Advantage<br />Comparative Advantage<br />Comparative Advantage with Money<br />Relative Factor Endowments<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    10. 10. 6-10<br />Firm-Based Trade Theories<br />Country Similarity Theory<br />Product Life-Cycle Theory<br />Global Strategic Rivalry Theory<br />Porter’s National Competitive Advantage<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    11. 11. 6-11<br />Porter’s Diamond of National Competitive Advantage<br />Firm Strategy, <br />Structure, <br />and Rivalry<br />Factor<br />Conditions<br />Demand<br />Conditions<br />Related and <br />Supporting<br />Industries<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    12. 12. 6-12<br />International Investment Theories<br />Ownership Advantages<br />Internalization<br />Dunning’s Eclectic Theory<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    13. 13. 6-13<br />International Investment Theories<br />Ownership Advantages<br />Internalization<br />Dunning’s Eclectic Theory<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    14. 14. IMF’s Current Exchange Rate Arrangements<br />Crawling pegs<br />Exchange rates within crawling bands<br />Managed float with no preannounced path for the exchange rate<br />Independently floating exchange rates<br />
    15. 15. Influences of Exchange Rate Fluctuation<br />Supply and demand of the currency<br />Interest rates<br />Inflation<br />Investor Expectations <br />
    16. 16. Balance of Payments<br />The state of a nation’s balance of payments (BOP) reveals the state of that country’s economy<br />If the BOP is slipping into deficit the government is probably considering one or more market or nonmarket measures to correct or suppress that deficit<br />Currency devaluation or restrictive monetary or fiscal policies to induce deflation are likely<br />Currency or trade controls may be near<br />
    17. 17. 7-17<br />Balance of Payments<br />The Balance of Payments (BOP) <br />Accounting System records <br />international transactions and <br />supplies vital information about the <br />health of a national economy and <br />likely changes in its fiscal and <br />monetary policies. <br />
    18. 18. A Nation’s Balance of Payments<br />Current account: records exports and imports in goods and services<br />Goods or merchandise account<br />Services account <br />Unilateral transfers<br />Capital account: records the net changes in international financial assets and liabilities<br />Direct investments<br />Portfolio Investments<br />Short-term capital flows<br />
    19. 19. A Nation’s Balance of Payment<br />Official Reservesaccount: records the assets held by the government<br />Gold, foreign currencies<br />Accounts in foreign banks: A balance of the country’s foreign currency<br />
    20. 20. 7-20<br />Types of Current Account Transactions<br />Exports and imports of goods<br />Exports and imports of services<br />Investment income<br />Gifts<br />
    21. 21. Foreign Exchange Risk Management<br />Transaction exposure refers to a change in the value of a financial position created by foreign currency changes between the establishment and settlement of a contract<br />Translation exposure refers to the potential change in value of a company’s financial position due to exposure created during the financial consolidation process<br />Economic exposure refers to the potential for the value of future cash flows to be affected by unanticipated exchange rate movements<br />
    22. 22. 9-17<br />Nontariff Barriers<br />Quotas<br />Numerical export controls<br />Product and testing standards<br />Restricted access to distribution networks<br />Public-sector procurement policies<br />Regulatory controls<br />Currency controls<br />Investment controls<br />Local-purchase requirements<br />Know 4 of these for final<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    23. 23. 919<br />Other Nontariff Barriers<br />Product and testing standards<br />Restricted access to distribution networks<br />Public-sector procurement policies<br />Local-purchase requirements<br />Regulatory controls<br />Currency controls<br />Investment controls<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    24. 24. 9-35<br />Forms of Economic Integration<br />Free Trade Area<br />Customs Union<br />Common Market<br />Economic Union<br />Political Union<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    25. 25. 9-25<br />Forms of Economic Integration<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    26. 26. 11-26<br />Strategic Alternatives<br />Home replication strategy<br />Multidomestic strategy<br />Global strategy<br />Transnational strategy<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    27. 27. 11-27<br />Figure 11.1 Strategic Alternatives<br />Pressures for Global Efficiencies<br />Global Strategy<br />Firm views the world as<br />single marketplace. Goal <br />is to create standardized<br />products.<br />Transnational Strategy<br />Firm combines benefits <br />of global scale<br />efficiencies with benefits<br />of local responsiveness<br />High<br />Low<br />Home Replication<br />Firm uses core <br />competency or firm-<br />specific advantage<br />Multidomestic Strategy<br />Firm operates as a <br />collection of relatively<br />independent subsidiaries<br />Low High<br />Pressures for Local Responsiveness/Flexibility<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />
    28. 28. 12-28<br />Figure 12.1 Choosing a Mode of Entry<br />Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall<br />

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