Management (Considerations for Global Business Expansion)

When Wayne opened his business many years ago, most businesses operated only within one country. But now thanks to __________, businesses increasingly take advantage of crossborder activities. globalization Tim opened his business with the intention of importing goods from China and selling them in the U.S. We could say that this business is born-global. Allen is considering entering the global marketplace. What question should be answered first? Is the company up to the task? Antonio's small pasta firm is considering exporting. A Canadian grocery store chain with its corporate headquarters in Quebec has approached him. Which question would need to be answered in relation to the pasta company's management experience and resource objectives? What international expertise does Antonio have, specifically does he speak French? A Canadian grocery store chain with its corporate headquarters in Quebec has approached Antonio's small pasta firm about possible exporting. Which question would need to be answered in relation to the pasta company's management objectives? Why does Antonio want to export to Canada? Antonio's small pasta firm is considering exporting its products. A Canadian grocery store chain with its corporate headquarters in Quebec has approached him. Which question would need to be answered in relation to the pasta company's financial capacity objectives? How are the initial expenses of expanding to Canada going to be covered? A Canadian grocery store chain with its corporate headquarters in Quebec has approached Antonio, the owner of a company that produces pasta, about exporting its pasta into Canada. Which question would need to be answered in relation to the company's production capacity objectives? Will Canadian sales hurt USA sales? For most small businesses, the primary motivation for going global is to opportunities. develop new market According to the 2011 BRIC Markets, which country has shown the most economic growth in GDP? China Seeking to extend the product life cycle by expanding into international markets has become a less effective strategy because customer preferences have become more similar around the world. International markets are increasingly demanding unique needs and interests. differentiated products that satisfy their To expand a market, an emerging motivation for going global is to find buyers for highly specialized products. Experience curve efficiencies refers to scale. the outcomes of learning effects and economies of A company with the most experienced production employees and the lowest unit costs in its industry indicates that it had benefited from experience curve efficiencies. Learning effects occur when insights gained by employees enhance their work performance. As Antonio's pasta company increases in size, the business is able to realize economies of scale: by spreading of an investment across more units of production. In the past, companies have left the United States to: find raw materials. A company specializing in flavoring compounds opens a plant near the rain forest. This move enables its biologists to derive flavors without destroying the plants and supports company globalization efforts being related to gaining access to resources. Increasingly, small businesses are expanding internationally to gain access to skilled labor. Nike and many other companies engage in international outsourcing, which refers to accessing foreign labor through contracts with independent providers. Labor rates have risen over time to the point that Antonio's Pasta is considering ____________ to reduce costs. offshoring. A company that operates a customer service call center is likely to contract with a company in India to: cut costs. Some small firms choose to outsource internationally in order to foreign employees. Regional free trade areas have been formed in order to cut costs and access talented reduce tariffs to increase trade. When it comes to cutting costs, many foreign companies have chosen to locate production facilities in Mexico to: obtain tariff reductions. If an olive oil importer sets up operations in Italy to be near its supplier, the company is going global by capitalizing on the special features of location. For some small businesses, a recent trend for going global is to be closer to large clients. Edward is a young entrepreneur with grand plans, including international expansion of his new company. Once that decision is made, Edwards next step is to: plan a strategy that increases the potential of the firm. A fundamental activity for global small business success is determining international markets that increase the company's unique potentials. In Antonio accepts the offer of the Canadian grocery to sell his American-made pasta in Canada, he will be: exporting. Importing can be described as the "flip side" of exporting. Mattel has allowed a producer in Thailand to manufacture and sell its branded dolls in overseas markets. The company in Thailand is a: licensee. If Finagle-A-Bagel contracts with a baker in Hong Kong to manufacture and sell a product in overseas markets, Finagle-A-Bagel would be the: licensor. For each unit produced under the licensing contract, the Hong Kong baker will pay a small fee called ________________ to Finagle-A-Bagel. royalties. The unauthorized use of intellectual property is called counterfeit activity. International franchising is a variation on the theme of foreign licensing. John is interested in joining with a large corporation in a cooperative venture to share risks and pool resources for his small auto parts manufacturing business. The strategy option he is exploring could best be described as an international strategic alliance. A business that locates a production facility or sales office overseas by purchasing a foreign business from another firm is participating in a cross-border acquisition. Coca-Cola leased land and built a bottling operation in Turkey This new facility is best described as: a greenfield venture. From a company-owned plant in Pakistan, Howard manufactures specialty apparel items for his small business, Garments of Eden. Because of overseas operations of the U.S. military in the region, Howard fears that his plant may be sabotaged or that the local government may attempt to take over the facility. Specifically, his fears are about political risk. Economic risk refers to the probability that a government will mismanage its economy and affect the business environment in ways that hinder the performance of firms operating there. When the exchange rate for a currency rises relative to that of another country, the rising currency has increased in value relative to the other currency. A small company can deal with changing currency rates by stating contracts in US dollars as opposed to the international currency. Which country would be the least challenging in its ease of doing business according to the World Bank's index? Chile The Federation of International Trade Associations website is a source of trade leads. Manufacturers or service firms that distribute a second firm's product or service is called a(n) _____. piggyback marketer. Melanie's Marbles is a young company that buys unusual marbles from many places around the world. To provide assurance for her vendors that they will be paid, Melanie's has established a ______________ at her bank.letter of credit. Once an exporter has shipped a product internationally and the title has been transferred, the exporter receives what is called a bill of lading. Which government organization is an excellent source information about analyzing markets, financing and planning strategy? Small Business Administration