Professional Documents
Culture Documents
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Nature and Importance of International Business Theories of IB International Business Environment The role of Multinationals in IBM Assessment of International markets International Marketing Research Strategic Planning Management of International Operations Human Resources Management International Marketing Management
1.3 Forms of IB
Export/Import Business Foreign Business/Foreign Subsidiary Joint Ventures Management Contracts Licensing Franchising Contract Manufacturing Assembly Operations Foreign Direct Investments (Multinational and Global Businesses)
1.3.1 Licensing
Under licensing agreement one firm, the licensor, grant to another firm, the licensee the right to use any kind of expertise, such as manufacturing processes, marketing procedures, and trademarks for one or more of the licensors products for a fee or a royalty of from 2% to 5 % of sales over the life of the contract
1.3.2 Franchising
Is a new kind of licensing which permits the franchisee to sell products or services under a highly publicized brand name and a well proven set of procedures and a carefully developed and controlled marketing strategy. Examples of franchisors are hotels (Hilton, Holiday in) and soft drinks (Coca-cola)
REVIEW QUESTIONS
1. (a.) What is International Business? (b.) How does it differ from Domestic Business? (c.) Discuss the role of International Business in Tanzanian business organizations. 2. With reference to Tanzania, discuss the rationale and the main challenges faced in operating across national borders. 3. Discuss the role and determinants of the nature and evolution of international business in Tanzania
England has absolute advantage in the production of Machinery and France has absolute advantage in the production of wine. Without specialization volume of production is Machinery 50+15=65 and Wine 20+60=80. With Specialization volume of production is Machinery 100 and Wine 120
Portugal has absolute advantage in producing both products. Relative superiority is computed as follows: Wine 120/80=1.5; Cloth 100/90=1.1 Thus Portugal has relative superiority in production of wine and England has relative superiority in production of cloth
REVIEW QUESTIONS
1. Compare competitive advantage, comparative advantage and the international product life cycle as explanations of Foreign Direct Investment. How are these three theories related? 2. How does the theory of international trade assist in explaining the current trends and patterns of World Trade? 3. Discuss David Ricardos comparative advantage theory of international trade comparing it with the modern theory of international trade by Hecksher-Ohlin.
3.1.5 Aesthetics
Pertaining to cultures sense of beauty, and good taste and it is expressed in the art, drama, music folklore and dances. Art: Color mean different things to different cultures Music: Tastes vary on the basis of culture Folklore: Slogans
3.1.6 Language
The successful international business manager must achieve expert communication. This requires a thorough understanding of the language as well as the ability to speak it.
U.S.A U.S.A Japan Great Britain Great Britain Arab Countries Brazil
REVIEW QUESTIONS
1. With reference to relevant Tanzanian examples discuss the influence of SocioCultural factors on internationalization process. 2. Explain giving relevant examples how do attitudes toward time, attitudes toward change and attitudes toward achievement and work affect the various functional areas of international business such as personnel and marketing 3. What are the relevance of understanding cultural dimensions in international arena?
3.4.1 Population
Population is one of primary indicator of the market size 10 largest countries in terms of population are: China, India, U.S.A, Indonesia, Brazil, Pakistan, Russia, Bangladesh, Japan and Nigeria 10 largest Cities are: Mexico City, New York, Sao Paulo, Lagos, Bombay, Shanghai, Tokyo, Buenos Aires, Paris and Seoul Population factors include population size, population density, population growth and population distribution
3.4.2 Income
Markets are people with money. Thus income figures on a country are necessary for market evaluation 6 countries with the highest GNP are: U.S.A, Japan, Germany, France, Italy and UK. 6 countries with the largest GNP per capita are Luxembourg, Switzerland, Japan, Denmark, Norway, and U.S.A Specific factors: Income size, income per capita, income distribution, income growth and level of private investment
REVIEW QUESTIONS
1. Discuss the influence of international business environment and competitive factors on internationalization process. 2. With reference to relevant Tanzanian examples, discuss the influence of political and socio-cultural factors on internationalization process.
4.2 Sources of Competitive Advantages for MNEs Proprietary Technology Other Sources of Competitive Advantages
REVIEW QUESTIONS
1) What are the sources of competitive advantages for an international firm? 2) One of competitive advantages possessed by MNCs is proprietary technology. Explain several methods that a firm can use to protect its proprietary technology. 3) Sometimes the presence of competitors in the market can have favorable consequences for the international firm. Discuss.
REVIEW QUESTIONS
1. Suppose you have been appointed as an export manager of a company manufacturing automotive tires and tubes and you have been asked by your managing director to locate a few foreign markets holding export prospects for automotive tires and tubes made by your company. Prepare a work plan clearly indicating the steps you would like to take for the purpose. 2. (a.) Define Triad Markets (b.) Explain why the Triad Markets are so important and the marketing strategies that are different in the tackling each Triad Market. 3. Nepal has a GNP per capita 45% greater than Ethiopia. It follows that Nepal is a better market than Ethiopia because its inhabitants are richer. Discuss.
REVIEW QUESTIONS
1. In international marketing research, what methods are used to collect primary and secondary data? Indicate the sources of marketing research information and the information you could require as a marketing manager to support your marketing decisions. 2. Discuss the challenges that one can face in designing a sampling plan for a developing country market
REVIEW QUESTIONS
1. Franchising has grown significantly in recent years. Describe what franchising is and give examples of a particular product groups suitable for franchising internationally. 2. In the course of IB Multinationals employ specific strategies and structures in reaching international markets worldwide. Name the strategies employed and the structures used. Show with examples the strategy-structure linkage for the two strategies: (i.) The strategy of exploiting a technological lead (ii.) The strategy of exploiting a strong trade name
REVIEW QUESTIONS
3. While most firms pay close attention to the importance of external factors as they internationalize, many firms fail to consider internal factors adequately. What are these internal factors and how important are they to the firm in international markets?
Other factors
Homogeneity of product lines Geographic Distance between Head Office and Subsidiary Degree of interdependence between the units Availability of Competent Managers International Experience
8.2 Controlling
Definition: Evaluating results in relation to Plans Types Approaches Performance measures used for Control
British Approach
Heavy emphasis on financial controls Attention focused on major problems Use of control for general guidance than for surveillance Large amount of autonomy to operating units
German Approach
Very detailed Control Attention on all variances More emphasis on production and operational efficiency Centralized type Used as policy and surveillance instrument
French Approach
Close to German approach but less systematic and sophisticated.
U.S.A Approach
More quantitative More precise plans and budgets rather than high level of companywide understanding and agreement regarding what constitutes appropriate behavior More centralized than European Approach Thus Europeans rely more on socio-emotional control systems and the Americans opt for task oriented objective control systems
Japanese Approach
Less participative Longer term planning horizons Budgets viewed more as communication device than a controlling tool. More slack in their budgets than Americans
Integrative techniques
Good relationship with political leaders Producing as much of the product locally as possible Hiring local people to manage the operations Effective labor management relations
REVIEW QUESTIONS
1.(a.) What types of political risks do you think are of concern to the manager of an international firm (b.) Suggest a way which could assist in managing political risks associated with a firms international operations. 2. With reference to European, American and Japanese managers, discuss how decision making and controlling philosophies and practices differ worldwide.
9.2 Training
Definition Importance Types of Training Programmes
Cultural Assimilator
A cultural assimilator is a programmed learning technique that is designed to expose members of one culture to some of the basic concepts, attitudes, role perceptions, customs and values of another culture. Example: If three Tanzanian managers are transferred to Singapore a cultural assimilator should be developed to familiarize the managers with Singapore customs and cultures.
9.3.2 OD Interventions
Structural activity in which targeted individuals, groups, or units engage in accomplishing task goals that are related to organization development. Specific interventions include: Team building, Management by objectives, Confrontation meetings, Third party peace-making and survey feedback.
REVIEW QUESTIONS
1. (a.) Make a clear distinction among home country managers, host country managers, and third country managers. (b.) Discuss the main reasons for using (i) home country managers (ii) host country managers (iii) third country managers 2.Define the following terms and briefly explain their significance in international business (a.) Geocentric Strategic Disposition (b.) Cultural Assimilator (c.) Co-determination Policy (d.) Ethnocentric and Polycentric strategic orientations (e.) Industrial Democracy
REVIEW QUESTIONS
3. (a.) Why are training and organizational development important aspects in international business? (b.) Identify six major types of cross cultural training programs which are widely used by managers of large multinational firms.
MAIN ISSUES
Nature and Scope of International Marketing Considerations in Developing an International Marketing Strategy Product Strategies Pricing Policies and Strategies Promotion of Products in International Setting Physical Distribution and International Channels Coordinating and Controlling International Marketing Strategy
REVIEW QUESTIONS
1. An international marketing strategy is based on market considerations and competitive factors. How should the firm analyze and cope with these issues in formulating a strategy for international markets? 2. International product standardization has been called one of the illusions of the international marketer. Discuss. 3. Describe and discuss the main channels of distribution used in exporting a product. Which one would you recommend for the product of a small manufacturer in Tanzania, and why?
11.1 Globalization
Globalization has arrived as the major challenge facing management in this millennium. All countries and companies are almost now competing in the global market place. (a.) What does the term globalization really mean? (b.) Discuss the influence of globalization on economic development of a developing country such as Tanzania.