Post on 21-Dec-2015
The midterm …
25-28 multiple-choice questions A choice of one of two essays
(handed out ahead of time)
Bring Scantron (Form 882-E – the small style)
Blue book (small is OK)
Multiple choice questions will cover …
assigned reading in Chapters 1, 8, 11, 9, 13, and 16
From the first third of the course, only Ch. 1 will be included
Also, the Porter article “The Competitive Advantage of Nations”
Use these slides and the class review discussion as guides Study…
the text your notes the original slides available on the class web
page Memorizing stuff from the slides is not enough!
Make sure you understand each concept on the slides
Have slides, your notes, and text open all at once All midterm topics are mentioned on slides, but
the slides themselves cannot provide full detail
Key issues in Chap. 1: International Business - An Overview
Why has international business grown? Government policies (freer trade) New technology New institutions
Modes of international business Importing and exporting merchandise Service “exports and imports” Investment:
direct investment and portfolio investment
What is a “multinational enterprise?” Two basic multinational strategies
Multi-domestic (locally responsive) company Globally integrated company
Price competition, rapid change, better communication favor global integrated strategy
Ethical dilemmas – How to think about right and wrong Normativism Relativism
Key issues in Chaps. 8 and 11: Foreign Direct Investment (FDI)
Definition of foreign direct investment Why firms do foreign direct investment
Be able to think about under what circumstances a firm would produce abroad
Why not just license your tech to a local firm? Acquisitions vs. do-it-yourself Most FDI is to and from developed countries,
but investment in developing countries is growing
Hopes and fears of developing (poor) countries
What developing countries want
What they fear from investing companies
Key issues in Chap 9: Foreign exchange
What are money? foreign exchange? exchange rate?
How to find out a currency’s value (on line or in newspaper)
Dollar as most widely used/traded London as site of most trade
Fixed vs. “floating” exchange rates
Trading terms: bid, offer, spread Fully convertible (hard) currency vs.
“soft” currencies Key issues of “fundamental analysis”
in predicting change in a currency’s value
Note: Text of Ch. 9 is confusing and difficult. Download the slides
Porter’s Competitive Advantage of Nations
Understand what Porter means by the competitive advantage of an industry
Understand the four determinants Factor conditions (specialized factors) Demand conditions Related and supporting industries Firm strategy, structure, and rivalry
Understand what Porter means by each Importance of pressure on firms
Key issues in Global Sourcing (Country Evaluation and Selection)
How location decisions should be influenced by Porter’s theories
Scanning and initial decision techniques Know some key criteria
Size Growth rate Stability Spillovers
Limitations of scanning Dangers in using standard data sources
What causes firms to eliminate proposals from countries
Diversification vs. Concentration strategies
Differences between new and reinvestment/harvest decisions
Key issues in Chapter 16: Marketing
Product policy choices Production orientation Sales orientation Customer orientation Strategic marketing orientation
Forecasting for countries where you currently have little or no sales
“Gap” analysis (where you have sales)
Reasons products have to be altered from country to country Standardize basic elements to control
costs
Complexities of pricing Distribution systems
“Distribution” is “the course – physical path or legal title – that goods take between production and consumption.”
Includes both shipping and the process by which the product is sold
Price escalation Need to work with distributors
Promotion Push vs. Pull marketing
Push marketing: sell through direct sales techniques
Pull marketing: You encourage demand through techniques such as advertising
Complex distribution systems encourage push Differences in media Benefits and difficulties of standardizing
marketing message globally
Conclusions from the Dental News case
Dental News exists because There are few distributors of dental
equipment in poorer countries Communications media from rich countries
don’t tell dentists in poorer nations what they can get and how…
So it’s hard to be a dentist in these nations
Not required:Key points from Chap. 15: Control Strategies
What is control? planning, evaluation, and correction to
ensure the organization meets its objectives Why is control important? Control difficulties abroad
Distance Diversity Uncontrollables Extra uncertainties (government instabilities,
etc.)
Location of decision-making
Globally integrated strategy – more centralized
Multidomestic strategy – decentralized
Be able to describe how the choice of strategy will affect what a firm does
Control mechanisms
don’t memorize a list of mechanisms, but know that …
Strategic intent is the big shared mission that everyone knows they are pursuing
Corporate culture is shared values that produce similar behavior in different countries
Not requiredKey points in Chap. 17: Export and Import Strategies (Micro view)
Ch. 16 covered the macro, strategic view of marketing
Ch. 17 deals with specific details of exporting Characteristics of exporters
Probability of being an exporter increases with company size (revenues)
Export intensity, the % of revenues coming from exports, is not correlated with size
U.S. Government help: Export Assistance Centers of the International Trade Administration (ITA)
U.S. embassies in other countries
Intermediaries in distribution Sales representatives (“reps”) do not take title Distributors actually buy your goods from you Export management companies
handle everything, but rare in U.S.
Famous kinds of Asian intermediaries Sogo shosha - Japanese general trading company
Chaebol - Big Korean group with trading company
Other intermediaries in U.S. Freight forwarder (exporting) Customs broker (for importing)
Export Documentation
Key export documents Pro forma invoice – like a “letter of intent” Commercial invoice – an actual bill (describes
goods and payment terms) Bill of lading – receipt for goods from the
carrier (airline, shipping line) Export license – required for some
tech goods Certificate of origin – proof goods came
from a particular place
17-11