Chapter 4 Developing a Global Vision Global Vision
Chapter 4 Developing a Global Vision
Global Vision • Recognize and react to international marketing opportunities • Be aware of threats from foreign competitors • Use international distribution networks
Importance of Global Marketing • U. S. exports a fifth of industrial production and one-third of its farm products • One of every sixteen jobs in U. S. is supported by exports
The Negatives of Global Trade • Millions of Americans have lost jobs • Millions fear losing jobs • Workers face pay-cut demands • Service and white-collar jobs are vulnerable to operations move
The Advantages of Global Trade • Rise from poverty foreign nations • Per capita income increases • Productivity and living standard increase • Inflation not as threatening • Open economy spurs innovation • Export jobs may pay more
Multinational Advantage • Overcome trade problems • Sidestep regulatory problems • Shift production from one plant to another • Tap new technology from around the world • Save in labor costs
Global Marketing Standardization • World markets are becoming more alike • Standardized products can be sold the same way worldwide • Successful companies may vary products for global markets
The External Environment Culture Environmental Factors Economic and Technological Development Political Structure Demographic Makeup Natural Resources
Culture ® Language ® Religion ® Superstitions ® Etiquette ® Customs ® Traditions ® Notion of time
Economic and Technological Development Type of Society Description Traditional Agricultural, Little Upward Mobility Pre-Industrial Social and Economic Change Takeoff New Industries Industrializing Spread of Technology Fully Industrial Exporter, Technology as Driver of New Innovation
Legal Considerations Exchange Control A tax levied on goods entering a country Limit on the amount of a product that can enter a country Exclusion of products from a country Foreign exchange must be sold to a control agency Market Grouping Common trade alliance Trade Agreement An agreement to stimulate international trade Tariff Quota Boycott
Political and Legal Considerations Examples Mercosur European Union NAFTA
Risk Levels for Global Entry Risk Joint Contract Venture Manufacturing Licensing Export Low risk/ low return Direct Investment High risk/ high return Return
Entering the Global Marketplace Export Sell domestically produced products to buyers in other countries. Licensing Legal process allowing use of manufacturing/patents/knowledge. Contract Manufacturing Private-label manufacturing by a foreign country Joint Venture Domestic firm buys/joins a foreign company to create new entity. Direct Investment Active ownership of a foreign company/manufacturing facility.
Porter’s ‘Diamond’ of National Competitive Advantage Company Strategy, Structure and Rivalry Intensity of Competition Factor Conditions Demand Conditions Natural Resources Education Size of Market Consumer Sophistication Related and Supporting industries Suppler Clusters
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