1. The term “sovereignty” is defined as “supreme and independent political authority.

”
Sovereignty is a central consideration in several global business issues today. For example,
Europe views the U.S. Helms-Burton legislation against Cuba to be an unacceptable extension of
sovereignty outside the U.S. “Extraterritorial sovereignty” is invoked by those who object to the
constraints that the Foreign Corrupt Practices Act places on U.S. businesses.

WTO , based in Geneva , has a DSB (Dispute-Settlement Body) representing all member countries that
mediates trade complaints concerning unfair trade barriers and other issues.

2. https://files.pearsoned.de/ps/ext/9780273766773
3. Jhxdbf
4. What are the advantages and disadvantages or using licensing as a market entry tool?
Give examples of companies from different countries that use licensing as a global
marketing strategy.
a. Advantages: 1. Low cost entry alternative2. Allows licensor to circumvent tariffs,
quotas, or similar export barriers3. Limits political risk and risk of expropriation
b. Disadvantages:1. A limited form of participation; licensor generally has no
control on marketing program associated with product produced under license.
5. 2. Financial upside limited by royalty rate.3. Licensees can become competitors.
6. The president of XYZ Manufacturing Company of Buffalo, New York, comes to you with a license
offer from a company in Osaka. In return for sharing the company's patents and know-how, the
 Japanese company will pay a license fee of 5 percent of the ex-factory price of all products sold
based on the U.S. company’s license. The president wants your advice. What would you tell
him?Assuming XYZ is a small manufacturer with limited international experience, and if the
picture for both market and sales (market share) potential are promising, licensing can be an
attractive entry mode. Possibly entry into the Japanese market could be expedited by following
this approach, especially if distribution would be a problem. However, XYZ must carefully study
the geographic scope of the agreement. Should licensed product be marketed only in Japan?
Another concern for XYZ is that the licensee will become a stronger competitor once it has
absorbed XYZ’s know-how. XYZ may wish to investigate other potential licensees before making
a final decision. XYZ must also ensure that its patents are protected in Japan. Overall, as Root
(1994, 119) notes, “managers can rationally choose licensing as a primary entry mode only when
they compare the expected profitability of a proposed licensing venture with the expected
profitability of alternative entry modes.” Root suggests profit contribution analysis based on
projections of incremental revenues and incremental costs associated with the licensing
agreement. Incremental revenues (excluding royalty revenues) for life of agreement:· Lump-
sum royalties· Technical-assistance fees· Engineering/construction fees· Equity
shares in licensee· Dividends on equity sharesIncremental costs for life of
agreement:Opportunity costs· Loss of current export revenues (if company currently
exports)Start-Up Costs· Target market research· Acquisition of local patent/trademark
protection· Negotiation of licensing agreement· Training licensee’s employeesOngoing
Costs· Periodic training/updating of licensee· Maintaining local patent/trademark
7.
8.
9.
10.

11. 5.
12. Global issues that arise with physical distribution and transportation logistics such
as anticipating demand, proper inventory investments, order processing and handling,
warehouse decisions, and transportation decisions (air, truck, water, pipeline,
etc.).protection

One issue is finding the most cost-effective mode for moving goods between far-flung global
production, distribution, and retail units.

Companies have a variety of transportation options available: trucks provide flexibility and
excellent coverage; water is a low-cost, but slow mode for bulky products; air, by contrast,
fastest but also the most expensive.

Many companies will use intermodal (i.e., multimodal) transportation in which a container
moves via various modes. Both inbound and outbound logistics must be managed to
achieve optimum levels of services and speed.

In Chapter 13, 3M and Laura Ashley are both discussed as companies that have improved
their distribution efforts.3M established a distribution center in the Netherlands and invested
millions in a truck fleet to provide daily service on the Continent.

Laura Ashley has subcontracted with FedEx's Business Logistics Service to provide air
service between Asian Factories and the company's retail stores.

Previously, output from Asian factories was shipped to the company's distribution center in
Wales and then sent back to Asia to stock the retail stores.
13.