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Business 187 - Global Dimensions of Business

Business 187 - Global Dimensions of Business. Review for second midterm Prof. Wood. The midterm …. 25-30 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) .

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Business 187 - Global Dimensions of Business

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  1. Business 187 - Global Dimensions of Business Review for second midterm Prof. Wood

  2. The midterm … • 25-30 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)

  3. Multiple choice questions will cover … • assigned reading in Chapters 1, 8, 11, 9, 13, and 16 • Only Ch. 1 will be included from the first third of the course • the Porter article “The Competitive Advantage of Nations”

  4. 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

  5. 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

  6. 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

  7. What is a “multinational enterprise?” • Two basic multinational strategies • Multi-domestic (locally responsive) company • Globally integrated company • Price competition, rapid change, better communicationfavor global integrated strategy • Ethical dilemmas – How to think about right and wrong • Normativism • Relativism

  8. 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 • Most FDI is to and from developed countries, but investment in developing countries is growing

  9. Hopes and fears of developing (poor) countries • What developing countries want • Need for capital when a country is running a trade deficit • What they fear from investing companies

  10. Key issues in Chap 9: Foreign exchange • What are • money? • foreign exchange? • exchange rate? • How to find out a currency’s value • (newspaper or on line) • Dollar as most widely used/traded • London as site of most trade • Fixed vs. “floating” exchange rates

  11. 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

  12. Key issues in Porter’s Competitive Advantage of Nations • Understand what Porter means by the competitive advantage of an industry • Understand the four determinants • Factor conditions • Demand conditions • Related and supporting industries • Firm strategy, structure, and rivalry • Understand what Porter means by each • Importance of pressure on firms

  13. 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

  14. What causes firms to eliminate proposals from countries • Diversification vs. Concentration strategies • Differences between new and reinvestment decisions

  15. Key issues in Chapter 16: Marketing • Evaluating countries where you currently have little or no sales • “Gap” analysis (where you have sales) • Product policy choices • Production orientation • Sales orientation • Customer orientation • Strategic marketing orientation • Societal marketing orientation

  16. Reasons products have to be altered from country to country • Standardize basic elements to control costs • Complexities of pricing • Distribution systems • Price escalation • Need to work with distributors

  17. Promotion • Push vs. Pull marketing • Push marketing: sell through direct sales techniques • Pull marketing: You encourage demandthrough techniques such as advertising • Complex distribution systems encourage push • Differences in media • Benefits and difficulties of standardizing marketing message globally

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