Chapter 03 – Doing Business in Global Markets
3-21
REACHING BEYOND
our borders
(Text page 69
PPT 3-31
Golden Arches
Glowing across the
Globe
(See complete PowerPoint slide notes on page 3.64.)
PPT 3-32
That’s at McDonalds?
(See complete PowerPoint slide notes on page 3.64.)
E. CONTRACT MANUFACTURING
1. CONTRACT MANUFACTURING involves a for-
eign country’s production of private-label goods to
which a domestic company then attaches its brand
examples: Dell, Xerox, and IBM).
2. By using contract manufacturing a company can
3. A firm can also use contract manufacturing tempo-
rarily to MEET AN UNEXPECTED INCREASE IN
4. Also, labor costs are low.
F. INTERNATIONAL JOINT VENTURES AND STRA-
1. A JOINT VENTURE is a partnership in which two
or more companies (often from different countries)
2. The text offers the example of the joint venture be-
4. The BENEFITS of joint venture:
a. Shared technology and risk
c. Entry into markets where foreign companies
are not allowed unless their goods are pro-
duced locally
Chapter 03 – Doing Business in Global Markets
PPT 3-33
Contract Manufacturing
PPT 3-34
Joint Ventures
3-25
PPT 3-35
Strategic Alliances
(See complete PowerPoint slide notes on page 3.66.)
PPT 3-36
Foreign Direct Investment
(See complete PowerPoint slide notes on page 3.66.)
Chapter 03 – Doing Business in Global Markets
that the COMPANY MAINTAINS COMPLETE
CONTROL over any technology or expertise it
products in many different countries and has
Chapter 03 – Doing Business in Global Markets
critical thinking
exercise 3-2
EVALUATING GLOBAL
EXPANSION
PPT 3-37
Multinational Corporations
TEXT FIGURE 3.5
The Largest Multinational
Corporations in the World
(Text page 71)
bonus case 3-2
GAP’S EVOLVING VIEW OF
ETHICS
PPT 3-38
Sovereign Wealth Funds
Chapter 03 – Doing Business in Global Markets
d. There is concern that the size and government
5. Different strategies reflect different levels of own-
ership, financial commitment, and risk.
learning goal 4
Evaluate the forces that affect trading in world markets.
2. Culture can include social structures, religion,
manners and customs, values and attitudes, lan-
3. American businesspeople are notoriously bad at
adapting to cultural differences among nations.
TRICITY, an attitude that our culture is superi-
or to all others.
b. In contrast, foreign businesspeople are very
good at adapting to U.S. culture.
Chapter 03 – Doing Business in Global Markets
progress
assessment
(Text page 72)
PPT 3-39
Progress Assessment
PPT 3-40
Forces Affecting Global Trade
lecture link 3-4
FOREIGN ETIQUETTE TIPS
PPT 3-41
Cultural Differences
PPT 3-42
Lost in Translation
4. RELIGION is an important part of any society’s
culture and can have a significant impact on busi-
5. SOCIOCULTURAL DIFFERENCES can also im-
6. Learning about sociocultural perspectives regard-
ing time, change, competition, natural resources,
7. A sound global philosophy is never assume what
works in one country will work in another.
1. Due to economic conditions, global opportunities
may not be viable opportunities at all.
Chapter 03 – Doing Business in Global Markets
lecture link 3-5
BLOOD TYPE MATTERS IN
JAPAN
PPT 3-43
Ready to Travel Abroad?
TEXT FIGURE 3.6
Oops, Did We Say That?
(Text page 73)
PPT 3-44
Do as the Germans…
PPT 3-45
Exchange Rates
3. Global financial markets operate under a system
of FLOATING EXCHANGE RATES in which cur-
rencies “float” according to supply and demand in
the global market for currency.
possible is BARTERING, trading merchan-
dise for merchandise with no money involved.
INCONSISTENT.
3-33
critical thinking
exercise 3-3
CURRENCY SHIFTS
PPT 3-46
Devaluation and Countertrading
PPT 3-47
Legal Concerns Overseas
ferently country to country.
2. American businesspeople are bound to follow
U.S. LAWS AND REGULATIONS in conducting
business globally.
OF 1978 prohibits “questionable” or “dubious”
1. Technological constraints may make it difficult to
fect exportable products (such as the difference
Chapter 03 – Doing Business in Global Markets
TEXT FIGURE 3.7
Countries Rated Highest on
Corrupt Business
(Text page 75)
This text figure lists the 10 countries rated highest on cor-
rupt business practices.
lecture link 3-6
BRIBERY PITFALLS
The Sarbanes-Oxley Act has focused corporate executives’
attention on uncovering and preventing bribery. (See the com-
plete lecture link on page 3.81 of this manual.)
bonus case 3-3
COOLING OFF THE SWEAT
SHOPS
Apparel leaders such as Nike, Reebok, and Liz Claiborne
are responding to critics by joining the Fair Labor Association,
a sweatshop-monitoring organization. (See the complete case,
discussion questions, and suggested answers beginning on
page 3.94 of this manual.)
PPT 3-48
Environmental Forces
(See complete PowerPoint slide notes on page 3.71)
progress
assessment
(Text page 75)
PPT 3-49
Progress Assessment
(See complete PowerPoint slide notes on page 3.71)
Chapter 03 – Doing Business in Global Markets
learning goal 5
economic principle called MERCANTILISM,
Chapter 03 – Doing Business in Global Markets
PPT 3-50
Trade Protectionism
(See complete PowerPoint slide notes on page 3.72)
lecture link 3-7
DOES TRADE PROTECTION
PROTECT OR RISK YOUR
FUTURE?
This reading focuses on the consequences of the 1930
Smoot-Hawley Act. (See the complete lecture link on page
3.82 in this manual.)
PPT 3-51
Tariffs
(See complete PowerPoint slide notes on page 3.72)
Chapter 03 – Doing Business in Global Markets
petitively priced.
money for the government.
4. QUOTAS are more restrictive.
a. An IMPORT QUOTA is a limit on the number
of products in certain categories that a nation
can import.
b. Nations also PROHIBIT the export of specific
to free trade.
b. India imposes a number of restrictive stand-
ards to inhibit the sale of imported products.
3-39
PPT 3-52
Import Quotas and Embargos
(See complete PowerPoint slide notes on page 3.72)
ducers.
6. Overcoming trade constraints creates business
opportunities.
1. Leaders from 23 countries formed the General
TRADE (GATT) is a 1948 agreement that estab-
3. The 1986 URUGUAY ROUND OF GATT TALKS
national laws that IMPEDE TRADE EXPANSION.