International-business-国际商务

1. Differences in legal systems: COMMON LAW is based on the cumulative wisdom of judges decisions on individual cases through history. These cases create legal precedents, which other judges use to decide similar cases. For example, the United States of America, the United Kingdom, Canada CIVIL LAW is based on a codification, or detailed listing, of what is and is not permissible. For example, French, GermanOne important difference between common law and civil law systems is apparent in the roles of judges and lawyers. In a common law system, the judge serves as a neutral referee, ruling on various motions by the opposing parties lawyers. These lawyers are responsible for developing their clients case and choosing which evidence to submit on their clients behalf. In civil law system, the judge takes on many of the task of the lawyers, determining, for example, the scope of evidence to be collected and presented to the court. RELIGIOUS LAW is based on the officially established rules governing the faith and practice of a particular religion. Theocracy. For example, Iran BUREAUCRATIC LAW is whatever the countrys bureaucrats say it is, regardless of the formal law of the land. Contracts can be made or broken at the whim of those in power. 2. Laws directed against foreign firms: Nationalization: Often when leftist governments obtain power, they choose to transfer ownership of resources from the private to the public sector. Expropriation: The transfer that when the host government compensates the private owners for their losses. Confiscation: The transfer that when the host government offers no compensation. Privatization: The conversion of state-owned property to privately owned property. Constraints on foreign ownership: to avoid having their economies or key industries controlled by foreigners. Repatriate: Countries can also constrain foreign MNCs by imposing restrictions on their ability to repatriate (return to their home countries) the profits earned in the host country.3. Political risks Political risk is divided into macropolitical risk (affects all firms in a country) and micropolitical risk (affects only a specific firm or firms within a specific industry).Examples of political risks:TYPE IMPACT ON FIRMSexpropriationLoss of future profitsConfiscationLoss of assets; loss of future profitsCampaigns against foreign goodsLoss of sales; increased costs of public relations efforts to improve public imageMandatory labor benefits legislationIncreased operating costsKidnappings, terrorist threats, and other forms of violenceDisrupted production; increased security costs; increased managerial costs; lower productivityCivil warsDestruction of property; lost sales; disruption of production; increased security costs; lower productivityInflation Higher operating costsRepatriation Inability to transfer funds freelyCurrency devaluationsReduced value of repatriated earningsIncreased taxationLower after-tax profits4. Elements of cultureLanguage; communication; religion; values and attitudes; social structure5. Low-context culture: the words used by the speaker explicitly convey the speakers message to the listener, such as German, Canadian, British, American.High-context culture: the context in which a conversation occurs is just as important as the words that are actually spoken, and cultural clues are important in understanding what is being communicated, such as Chinese, Korean, Japanese.6. Hofstedes five dimensions of national cultureSocial orientation: individualism-America; collectivism-JapanPower orientation: power respect-Asia; power tolerance-AmericaUncertainty orientation: uncertainty acceptance-the United States, Hong Kong of China, Singapore; uncertainty avoidance-Austria, Japan, Italy, FranceGoal orientation: aggressive goal behavior-USA, British, German; passive goal behavior-SwedenTime orientation: long-term outlook-Japan, Hong Kong of China, Taiwan of China; short-term outlook-Pakistan, Philippines7. What is international strategic management and whats the aim of international strategic management?International strategic management is a comprehensive and ongoing management planning process aimed at formulating and implementing strategies that enable a firm to compete effectively internationally.8. Strategic alternatives The home replication strategy: The firm uses the core competency or firm-specific advantage it developed at home as its main competitive weapon in the foreign marks that it enters. the the The multidomestic strategy: The firm views itself as a collection of relatively independent operating subsidiaries, each of which focuses on a specific domestic market. the gThe global strategy: The firm views the world as a single marketplace and its primary goal is to create standardized goods and services that will address the needs of customers worldwide. the TTThe transnational strategy: The firm attempts to combine the benefits of global scale efficiencies with the benefits of local responsiveness.9. Distinctive competenceA firms distinctive competence may be cutting-edge technology, efficient distribution networks, superior organizational practices, or well-respected brand names. Without a distinctive competence, a foreign firm will have difficulty competing with local firms that are presumed to know the local market better. The Disney name, image, and portfolio of characters, for example, is a distinctive competence that allows the firm to succeed in foreign markets. Similarly, the ready availability of soft-ware programs compatible with Windows operating systems gives Microsoft an advantage in competing with local firms outside the United States.Whatever its form, this distinctive competence represents an important resource to the firm. A firm often wishes to exploit this advantage by expanding its operations into as many markets as its resources allow. To a large degree, the internationalization strategy adopted by a company reflects the interplay between its distinctive competence and the business opportunities available in different countries.10. Steps in international strategy formulation Develop a mission statement: define the firms values, purpose, and direction. Perform a SWOT analysis: assess the firms external and internal environments to identify strengths, weaknesses, opportunities, and threats. Set strategic goals: exploit the firms strengths and environmental opportunities. Neutralize external threats and overcome the firms weaknesses. Develop tactical goals and plans: devise the means to achieve strategic goals and to guide the firms daily activities. Develop a control framework: formulate managerial and organizational systems and processes.11. Three levels of international strategy for MNCs Corporate strategy: single-business; related diversification; unrelated diversification Business strategy: differentiation; cost leadership; focus Functional strategies: finance; marketing; operations; human resource management; R&D (research and development)12. Which mode of entry should it use?Decision factors: Ownership advantages Location advantages Internalization advantages Other factors, such as need for control, resource availability, global strategy13. Modes of entry Exporting: is the simplest and most common form of international business activity. It takes several forms, including indirect exports (a firm sell its product to a domestic customer, which in turn exports the product); direct exports (sales to customers located outside the firms home country); intracorporate transfers (the sale of goods by a firm in one country to an affiliated firm in another). International licensing: a firm, called the licensor, leases the right to use its intellectual property to another firm, called the licensee, in return for a fee. International franchising: an independent entrepreneur or organization, called the franchisee, to operate a business under the name of another, called the franchisor, in return for a fee. The franchisor provides its franchisees with trademarks, operating systems, and well-known product reputations, as well as continuous support services such as advertising, training, reservation services (for hotel operations), and quality assurance programs. Specialized modes: contract manufacturing (is used by firms, both large and small, that outsource most or all of their manufacturing needs to other companies); management contracts; turnkey projects (is a contract under which a firm agrees to fully design, construct, and equip a facility and then turn the project over to the purchaser when it is ready for operation). Foreign direct investment: firms enter international markets through ownership and control of assets in host countries, including greenfield strategy; acquisition strategy; joint venture.14. Advantages and disadvantages of Exporting and Foreign direct investment.ModePrimary advantagesPrimary disadvantagesExportingRelatively low financial exposurePermit gradual market entryAcquire knowledge about local marketAvoid restrictions on foreign investmentVulnerability to tariffs and NTBsLogistical complexitiesPotential conflicts with distributorsForeign direct investmentHigh profit potential Maintain control over operationsAcquire knowledge of local marketAvoid tariffs and NTBsHigh financial and managerial investmentsHigher exposure to political riskVulnerability to restrictions on foreign investmentGreater managerial complexity15. The advantages, problems and solutions of franchising.Advantages: low financial risks; low-cost way to assess market potential; avoid tariffs, NTBs, restrictions on foreign investment; maintain more control than with licensing; franchisee provides knowledge of local market.Problems: limits market opportunities/profits; dependence on franchisee; potential conflicts with franchisee; may be creating future competitor.Solutions: choose the right time to enter the market by franchising; pay attention to the construction of legal protection system and protect the intellectual property rights; sign a perfect and rigorous franchising contract.16. The advantages, problems and solutions of acquisition.Acquisition is buying existing assets in a foreign country.Advantages: a high level of control; can quickly enter the market; regional economic advantages; the purchaser quickly obtains control over the acquired firms factories, employees, technology, brand names, and distribution networks.Problems: may “buy” the problem together, such as liabilities; it may be difficult to cope with cultural differences; international differences in accounting standards; risk of ownership; a lot of money is needed; appearanceofmonopolySolutions: the government actively improves laws and regulations and strengthen supervision on cross-border acquisitions; enterprises should formulate the direction of acquisition in line with their own development strategy; strengthening the risk control of acquisition; improve the image of the acquirer in the host country; seek help from a professional agency17. The advantages and disadvantages of outsource (contract manufacturing).Advantages: low financial risks; minimize resources devoted to manufacturing; focus firms resources on other elements of the value chainDisadvantages: reduced control (may affect quality, delivery schedules, etc.); reduced learning potential; potential public relations problems-may need to monitor working conditions, etc.18. The nature of international organization designOrganization design is the overall pattern of structural components and configurations used to manage the total organization.The appropriate design for any given organization may depend on the firms size, strategy, technology, and environment, as well as the cultures of the countries in which the firm operates.19. The aim of international organization designThe development of enterprise and the change of environment are not changeless. The international organization design should follow the development of the enterprise. To help the enterprise achieve its goals and improve its performance. To achieve synergies among its far-flung operations and to implement its organizational strategy.20. Global functional design (U-form organization) / Functional organizational structureThe global functional design calls for a firm to create departments or divisions that have worldwide responsibility for the common organizational functions-finance, operations, marketing, R&D, and human resources management.This design is used by MNCs that have relatively narrow or similar product lines.Advantages: The firm can easily transfer expertise within each functional area. Managers can maintain highly centralized control over functional operations. The global functional design focuses attention on the key functions of the firm.Disadvantages: The global functional design is practical only when the firm has relatively few products or customers. Coordination between department can be a major problem. There may also be duplication of resources among managers.The important issues are determined by the upper and the top executives.21. Distributed organizational structureDivision basis on: product, area, customerAdvantages: Decision-making speed and the response to the external environment are fast. It is beneficial to form a competitive relationship between the various business divisions.Disadvantages: Too large, resulting in waste of resources.Each independent division is determined by their respective leaders.22. Hybrid global designs: Now, mixed use of functional organizational structure and distributed organizational structure.23. The organizational structure of an enterprise should be matched with the competitive advantage of the enterprise.24. Boundaryless organizationA borderless organization is a kind of organizational design that its horizontal, vertical, or external boundaries are not defined by a predefined structure. It emphasizes control.Advantages: Make the management hierarchy flat; mobilize the enthusiasm of everyone; increase the interaction between different units; turns specialists into generalistsDisadvantages: easy to get out of control; decision making is difficult to agree with25. Centralization versus decentralizationCentralization is a form of organization that the management authority of the enterprise is focus more on in the upper level of the enterprise.Advantages: It is possible to unify the command and make the standards consistent, so that the managers can coordinate the overall situation. It is easy to make the command carry out. Conducive to form a unified corporate image. To concentrate on dealing with the crisis. High efficiency in decision making.Disadvantages: It is not conducive to the development of personality and characteristics. The lack of flexibility, not taking into account the particularity of things. To reduce the strain capacity of the external environment of the organization. Cannot fully mobilize the enthusiasm, initiative and creativity of the lower level. Easy to appear autocratic phenomenon.Decentralization is a form of organizing that the right of the business management in the lower level of the enterprise.26. The marketing mix Product: development the tangible and intangible features that meet customer needs In diverse markets. Pricing: develop policies that bring in revenue and strategically shape the competitive environment. Promotion: devise ways to enhance the desirability of the product or service to potential buyers. Place: get products and services into customers hands via transportation and merchandising.27. The modes of the marketing mix. The ethnocentric approach: is relatively easy to adopt. The firm simply markets its goods in international markets using the same marketing mix it uses domestically, thereby avoiding the expense of developing new marketing techniques to serve foreign customers. The polycentric approach: is far more costly because international marketers attempt to customize the firms marketing mix in each market the firm enters in order to meet the idiosyncratic needs of customers in that market. The geocentric approach: calls for standardization of the marketing mix, allowing the firm to provide essentially the same product or service globally.28. Advantages and disadvantages of standardized and customized international marketingStandardized international marketingAdvantages: Reduces marketing costs Facilitates centralized control of marketing Promotes efficiency in R%D Results in economies of scale in production Reflects the trend toward a single global marketplaceDisadvantages: Ignores different conditions of product use Ignores local legal differences Ignores differences in buyer behavior patterns Inhibits local marketing initiatives Ignores other d