Chapter 7: Global Management (Regional Trading Zones (APEC, UNASUR, ASEAN,…
Chapter 7: Global Management
Choosing a Location
Transportation and labor cost
Kind of facility being build
Wholly Owned Affiliates
Foreign offices, facilities, and manufacturing plants that are 100 percent owned by the parent company.
When companies combine key resources, costs, risks, technology, and people. Most common form is joint ventures
collection of networked firms in which the manufacturer or marketer of a product or service, the franchisor, licenses the entire business to another person or organization, the franchisee.
Domestic company, the licensor, receives royalty payments for allowing another company, the licensee, to produce product, sell its service, or use its brand name in a particular foreign market.
Selling domestically made products to foreign markets
Consumers, Trade Barriers, and Trade Agreement
The U.S marketplace is the most competitive in the world and has been one of the easiest for foreign companies to enter
For consumers, trade agreements increase choices, competitions, and purchasing power and decrease power
Regional Trading Zones
Now we have World Trade Organization
an agreement to regulate trade among more than 120 countries. Active 1947-1995
Historically, government have actively used trade barriers to make much more difficult or expensive to buy imported goods.
voluntary export restraints
government import standards
Tax on imported goods
Impact of Global Business
own businesses in two or more countries
Direct foreign investments
Company builds a new business or buys an existing business in a foreign country