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MARKT 351 A. LEBARD C-5

DEVELOPING A GLOBAL VISION I. GLOBAL MARKETING ENVIRONMENT

A. Global Firm (Multinational)– A firm that, by operating in more than one country, gains research and development, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors

B. Global Marketing – marketing that targets markets throughout the world C. U.S. Trade

1. GDP – $14,700,000,000,000 in 2010 2. Exports – Over $ $1,377,000,000,000 annually, 20% of industrial production, and

25% of economic growth 3. Agricultural Products – $96,632,000,000 in 2009 4. Nonagricultural – half of exports are chemicals, machinery, computers,

automobiles, and aircraft 5. Profit – one third of U.S. corporate profits come from foreign trade and investments Review #1

D. Trade Restrictions 1. Tariff – revenue and protective 2. Quota – limit 3. Embargo (boycott) – ban 4. Exchange control – amount and rate 5. Discrimination – bids and standards Review #2 E. Trade Enhancements 1. World Bank 2. IMF 3. GATT 4. WTO (World Trade Organization) 5. Regional Free Trade Zones a. EU (European Union) 27 country members - Since January 1, 2007, (EU27):

Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Spain, Slovakia, Slovenia, Sweden and the United Kingdom. Now three new proposed

b. NAFTA (North American Free Trade Agreement) 1993 – U.S., Canada and

Mexico Review #3 Intermission

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II. ENTERING AND OPERATING IN THE WORLD ARENA A. Exporting

1. Indirect 2. Direct

B. Joint Venturing 1. Licensing 2. Contract Manufacturing

3. Joint Ownership 4. Management Contracting

Review #4 C. Direct Ownership

1. 2. 3.

4. 5.

D. Global Organizational Forms (Multinational Firms) 1. Ethnocentric a. b. c. 2. Polycentric a. b. c.

3. Geocentric a. b. c. Review #5 E. Theory of Comparative Advantage – a nation should export those items which it produces most efficiently (lowest relative cost) and import those items it produces less efficiently (highest relative cost) 1. The rationale for international trade 2. U.S. comparative advantages a. b. c.

3. U.S. comparative disadvantages a. b. c. Review #6 End PODCAST COMPLETE Review #1 How much of U.S. corporate profits come from foreign trade and investments? 1. 10% 2. 20% 3. 33 1/3 % 4. 50% #3

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Review #2 Which of the following forms of trade restriction identifies a “ban” on the importation of a product or service? 1. Tariff 2. Quota 3. Embargo 4. Exchange control 5. Discrimination #3 Review #3 According to the podcast and measured by GDP, which of the following is the largest economy in the world? 1. EU(27) 2. China 3. U.S. 4. NAFTA #4. Intermission Review #4 According to the podcast, the U.S. is a major country of origin for which form of Joint- Venturing? 1. Licensing 2. Contract Manufacturing 3. Joint Ownership 4. Management Contracting #4. Review #5 Although the Direct Ownership form of global operations bears significant risk, Direct Ownership enjoys which of the following advantages? 1. Local incentives 2. Image enhancement 3. Deeper local relationship 4. Control All of the Above Review #6 According to the podcast, the U.S. Comparative advantages are 1. Advanced Technology g 2. Large area of fertile land in the temperate zone 3. Large domestic market 4. All of the above #4. END

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