560- post and responses 1

Bonnie Gibson

Discussion Board 1

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Chapter 1

Differentiate between a global company and a multinational company.

Both global companies and multinational companies operate in multiple countries, however, global companies tend to operate in a larger number of countries than multinational organizations. Global companies sell standard products without flexibility in terms of adapting to local consumers. Multinational companies have a central structure with a head office in the home country. Products are decided and developed by the head office, but subsidiary offices do have options to adapt to the local market's needs (Kedia, 2020).

 

Discuss the three factors necessary to achieve global awareness.

Global awareness is a frame of reference important to the success of a businessperson. The following factors are necessary to achieve global awareness. Tolerance for cultural differences; understanding differences, and accepting and working with others whose behaviors may differ from your own. Knowledge about culture and history; understanding culture aids in understanding the behavior of consumers and colleagues, it is also important to understand history because the way people act and think can be influenced by their history. Global awareness also involves market potentials and global economic, social and political trends (Cateors et al., 2020).

 

 

Chapter 2

What is the role of profit in international trade? Does profit replace or compliment the regulatory function of pricing? Discuss.

The most important mandate for corporations and other types of businesses is to maximize profit. A company is missing out on potential growth by limiting itself to sales generated only within its domestic borders (Masters, 2021). Profit compliments the regulatory function of pricing. Profit is the surplus revenue after a firm has paid all its costs; profit plays an important role in creating incentives for companies. Higher profit can encourage companies to reduce costs and develop new products. If an industry is profitable, new firms are encouraged to enter (Pettinger, 2018).

 

Discuss the evolution of world trade that led to the formation of WTO.

The World Trade Organization (WTO) was formed in 1994 and encompasses the General Agreement on Tariffs and Trade (GATT) structure and extends it to new areas that have not been adequately covered previously. The WTO adjudicates trade disputes. All member countries have equal representation. Following World War II the United States and 22 other countries signed the GATT which paved the way for the first effective worldwide tariff agreement (Cateors et al., 2020). The GATT managed to function as an international organization sponsoring eight rounds of multilateral trade negotiations. The Uruguay Round had extended considerably the realm of world trade rules with agreements on intellectual property and trade in services. The Agreement Establishing the World Trade Organization also referred to as the “Marrakesh Agreement”, was signed in  1994, after the Uruguay Round of Multilateral Trade Negotiations (Anand, 2020).

 

 

References

Anand, A. (2020). Formation of WTO. Law Column. https://www.lawcolumn.in/formation-of-wto/

Cateora, P.R, Money, R.B., Gilly, M.C., Graham, J.L. (2020). “International Marketing Eighteenth Edition.” McGraw Hill Education

Kedia, S. (2020). The Difference Between International, Multinational, Transnational & Global Companies. Marketing Mind. https://www.marketingmind.in/the-difference-between-international-multinational-transnational-global-companies/

Masters, T. (2021). What Is the Role of International Trade? Smart Capital Mind. https://www.smartcapitalmind.com/what-is-the-role-of-international-trade.htm

Pettinger, T. (2018).The Role of Profit in an Economy. Economics Help. https://www.economicshelp.org/blog/572/business/the-role-of-profit-in-an-economy/

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Mitch Ryan

Discussion 1 -

Chapter 1

Differentiate between a global company and a multinational company.

Global and multinational companies both operate in foreign markets, however one of the key differences between the two lie within their approach to those foreign markets. Global companies look at all foreign and domestic markets as one and instead of marketing based on different countries political, cultural, and economic forces, they market based on income levels and other forces. A prime example of this would be Coca-Cola, because when they went global all they did was put all other countries on the same equal playing field as North America and structure their approach to all countries as one. On the other hand, a multinational company looks at each foreign market as its own and takes into account those different political, cultural, and economic forces. Multinational companies are different, because it uses a decentralized approach to business (Lazzari, 2019). They all operate under the same brand, however they do act independently. 

Differentiate among the three international marketing concepts.

The three international marketing concepts are known as regular foreign marketing, international marketing, and global marketing. Regular foreign marketing is when a firm has the capacity set aside and ready to market goods and services in foreign markets. At this point the firms main focus will still be on domestic markets, however they do have the capacity to produce for foreign markets and they are able to adapt those products or services to best fit that market. International marketing are companies that are 100% involved in foreign markets. Companies of this nature then to not only plan for marketing in these markets but also production. Global marketing companies look at the foreign and home market as one. Their marketing segments are not based on the borders of nations, instead they are based on income levels, the usage of the product or services, and other factors. 

Chapter 2

What is the role of profit in international trade? Does profit replace or complement the regulatory function of pricing? Discuss

Profit plays a major role in International trade because the countries that are involved are looking to trade globally in return to gain more profit margins. Profits definitely do compliment the regulatory function of pricing. This is because consumer purchasing power is generally higher in developed countries which is a major hotspot for companies looking to trade globally since this will drive up the price.

Discuss the evolution of world trade that led to the formation of the WTO

The development of the WTO came about as U.S. Representatives were looking to reassess trade issues and they brought it to the table at the Uruguay Round trade agreement. The WTO adopted the same foundation of the GATT only adding new areas into the mix and requiring full involvement by all members while also having an expert panel to help make decisions on trade disputes. One of the key differences between the two is that GATT focused almost exclusively on goods, where the WTO encompasses all goods, services, and intellectual property, as well as some investment policies (Anderson, 2021).

References

Lazzari, Z. (2019, March 11). Global Company Vs. a Multinational Company. Chron. https://smallbusiness.chron.com/should-sales-strategy-globalization-78517.html

Anderson, K. (2021, March 24). World Trade Organization. Encyclopedia Britannica. https://www.britannica.com/topic/World-Trade-Organization

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