Professional Documents
Culture Documents
International Marketing: Global Company
International Marketing: Global Company
Multidomestic company
An organization with multi-country affiliates, each of which formulates its own business strategy based on perceived market differences
Global company
An organization that attempts to standardize and integrate operations worldwide in all functional areas
International company
Either a global or a Multidomestic company
Environment
All the forces surrounding and influencing the life and development of the firm
Uncontrollable forces
External forces over which management has no direct control, although it can exert an influence
Controllable forces
Internal forces that management administers to adapt to changes in the uncontrollable forces
Domestic environment
All the uncontrollable forces originating in the home country that surround and influence the firms life and development
Foreign environment
All the uncontrollable forces originating outside the home country that surround and influence the firm
International environment
Interaction between domestic and foreign environmental forces or between sets of foreign environmental forces
Self-reference criterion
Unconscious reference to ones own cultural values when judging behaviors of others in a new and different environment
Portfolio investment
The purchase of stocks and bonds to obtain a return on the funds invested
Direct investment
The purchase of sufficient stocks in a firm to obtain significant management control
Growth triangles
Transnational economic zones spread over large, geographically proximate areas covering three or more countries where differences in factor endowments are exploited to promote external trade and investment
Indirect exporting
The exporting of goods and services through various types of home-based exporters
Direct exporting
The exporting of goods and services by the firm that produces them
Joint venture
A cooperative effort among two or more organizations that share a common interest in a business enterprise or undertaking
Management Contract
An arrangement by which one firm provides management in all or specific areas to another firm
Licensing
A contractual arrangement in which one firm grants access to its patents, trade secrets, or technology to another for a fee
Franchising
A form of licensing in which one firm contract with another to operate a certain types of business under an established name according to specific rules
Contract Manufacturing
An arrangement in which one firm contracts with another to produce products to its specifications but assumes responsibility for marketing
Strategic Alliances
Partnerships between competitors, customers, or suppliers that may take one or more of various forms
Sogo Shosha
The largest of the Japanese general trading companies
Cooperative exporters
Established international manufactures that export other manufacturers, goods as well as their own
Manufacturers Agents
Independent sales representatives of various noncompeting suppliers Distributors Independent importers that buy for their own account for resale
Trading Companies
Firms that develop international trade and serve as intermediaries between foreign buyers And domestic sellers and vice versa
Parallel Importers
Wholesalers that import products independently of manufacturer-authorized importers or buy good for export and divert them to the domestic market
Gray Market
The sale of goods that are either legal but-unauthorized imports bearing domestic manufacturers trade names or exports that have been diverted to domestic market
Hypermarkets
Huge combination supermarket /discount stores where soft and hard goods are sold
Superstores
Name given to hypermarkets in Japan, some parts of Europe, and the United States
Mercantilism
An economic philosophy based on the belief that (1) a nations wealth depends on accumulated treasure, usually gold, and (2) to increase wealth government policies should promote exports and discourage imports
Absolute Advantage
The capability of one nation to produce more of a good with the same amount of input than another country
Comparative Advantage
A nation having absolute disadvantages in the production of two goods with respect to another nation has a comparative or relative advantage in the production of the goods in which its absolute disadvantage is less
Factor Endowment
Heckscher-Ohlin theory that countries export products requiring large amounts of their abundant production factors and import product requiring large amounts of their scarce production factors
Exchange Rate
The price of one currency stated in terms of another currency
Currency Devaluation
Lowering its price in terms of other currencies
Dumping
Selling a product abroad for less than the cost of production, the price in the home market, or the price to third countries
Subsidies
Financial contribution provided directly or indirectly by a government, which confers a benefit; include grants, preferential tax treatment, and government assumption of normal business expenses
Countervailing Duties
Additional import taxes levied on imports that have benefited from export subsidies
Tariffs
Taxes on imported goods for the purpose of raising their price to reduce competition for local producers or stimulate their local production
Ad valorem Duty
An import duty levied as a percentage of the invoice value of imported good
Compound Duty
A combination of specific and ad valorem duties
Variable Levy
An import duty set at the difference between world market prices and local governmentsupported prices
Nontariff Barriers
All forms of discrimination against imports other than import duties
Quotas
Numerical limits placed on specific classes of imports
Developed
A classification for all industrialized nations, which are most technically developed
Developing
A classification for the worlds lower-income nations, which are less technically developed
Underground economy
The part of a nations income that, because of unreporting or underreporting, is not measured by official statistics
Human-needs approach
Defines economic development as the elimination of poverty and unemployment as well as an increase in income
Import substitution
The local production of goods to replace imports
Cross investment
Foreign direct investment by oligopolistic firms in each others home countries as a defense measure
Internalization theory
An extension of the market imperfection theory; to obtain a higher return on its investment, a firm will transfer its superior knowledge to a foreign subsidiary rather than sell it in the open market
Hard loans
Made and repayable in hard, convertible currencies at market interest rates with normal market maturities
Soft loans
May be repayable in soft, nonconvertible currencies; carry low or no interest obligations; are frequently long terms, up to 40 years; and may grant grace periods of up to 10 years during which no payments are required