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International Marketing Assignment

International Marketing Assignment

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Published by: demstavros on Mar 28, 2010
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04/27/2013

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Introduction
The current paper focus on the impacts of the financial crisis we are facing now andsome ways on how to overcome these problems.
Definition
Credit crunch is a period during which borrowed funds are difficult to obtain and, evenif funds can be found, interest rates are very high. Credit crunches usually occur duringrecessions.The current financial crisis is considered the worst since the Great Depression whichstarted about 1930s and lasted until late 1930s or early 1940s preceding the World War II.
How the crisis started
 No one can determine how the crisis started. Usually these booms come after severalsmaller crises started in the past. For example the energy crisis and the increase of oil pricesmay lead to the crisis in automotive sector.The financial crisis we are experiencing is a result of unregulated mortgages and credit boom that were pushed by the low interest rate,
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set by Federal Reserve (at that timeFederal Reserve Ratio was only about one percent). Commercial banks increased their  borrowing heavily and exercised the practice of leverage. In more simple terms, this can betranslated as a lot of people spending more each year that may can afford. Many individuals
 
 International MarketingAssignment Repor
and businesses are in a state of moderate to advanced panic, believing that their businesses, plans, and way of life are finished forever.
Effects of recent financial crisis
Finance
The current financial crisis results to a lot of problems and/or changes globally. There isa lack of free finances. That means that individuals and/or businesses can not borrowmoney in order to retain in their business, or even to expand in new markets, globally or internationally. All businesses in the financial sector introduced very strict regulationsconcerning loans strategies and if one is qualified to obtain such a loan the interest is toohigh.
Unemployment 
Unemployment in the most developed and developing countries is in the highest levelever. Because of the decrease in all sections in the real estate business and as a consequencein other industries as well, a lot of people lost their jobs, others fear that they will also havesuch a fortune. When the unemployment increases, this means that consumers loose their  purchasing power or they are buying only the minimum/necessities to survive.
Social instability 
The social instability is also a consequence of the financial crisis. The majority of  businesses and individuals are feeling that are standing in a vacuum. The most employeesare facing the feeling of job insecurity, especially in the UK and US. So, they are workingharder, may be more hours per day in order to keep their jobs.
The impacts of the financial crisis Page 2
 
 International MarketingAssignment Repor
Bankruptcy 
We all have seen businesses which were colossus which were felt in bankruptcy. The best example in US market is AIG which was once the 18th-largest public company in theworld. It was listed on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.
International Marketing in General
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A company that masters only in its domestic market, sooner or later will lose it by strongforeign competitors which will come and challenge the company. The most companieshesitate to go abroad, because they see languages or cultural differences. Going abroadthere are benefits as well, because the company is not depending on only one country’smarket. In fact, the market of their products may be mature at home and growing abroad.Companies must adapt their marketing mix when going international. Asea BrownBoveri uses the slogan: “We are a global firm local everywhere”. Royal Ahold has the brand philosophy: “Everything the customer sees we localize. Everything they don’t see,we globalize”.Companies are most successful when they recognize a large target market whose needsare not meet yet. Building a strong culture at this target market the chances to succeed aregood.Multinational corporations face tough decisions on which products to emphasize inwhich countries. The allocation of products and the advertising budget to each country must
The impacts of the financial crisis Page 3

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