International Business

International business is a term used to collectively describe all commercial transactions (private and governmental, sales, investments, logistics,and transportation) that take place between two or more regions, countries and nations beyond their political boundary. Usually, private companies undertake such transactions for profit; governments undertake them for profit and [1] for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as [2] finance, banking, insurance, construction etc. . A multinational enterprise (MNE) is a company that has a worldwide approach to markets and production or one with operations in more than a country. An MNE is often called multinational corporation (MNC) or transnational company (TNC). Well known MNCs include fast food companies such as McDonald's and Yum Brands, vehicle manufacturers such as General Motors, Ford Motor Company and Toyota, consumer electronics companies like Samsung, LG and Sony, and energy companies such as ExxonMobil, Shell and BP. Most of the largest corporations operate in multiple national markets. Areas of study within this topic include differences in legal systems, political systems, economic policy, language, accounting standards, labour standards, living standards, environmental standards, local culture, corporate culture, foreign exchange market, tariffs, import and export regulations, trade agreements, climate, education and many more topics. Each of these factors requires significant changes in how individual business units operate from one country to the next. The conduct of international operations depends on companies' objectives and the means with which they carry them out. The operations affect and are affected by the physical and societal factors and the competitive environment. Operations Objectives: sales expansion, resource acquisition, risk minimization

Means Modes: importing and exporting, tourism and transportation, licensing and franchising, turnkey op erations, management contracts, direct investment and portfolio investments. Functions: marketing, global manufacturing and supply chain management, accounting, finance, human resources Overlaying alternatives: choice of countries, organization and control mechanisms

Physical and societal factors Political policies and legal practices Cultural factors Economic forces Geographical influences

Competitive factors Major advantage in price, marketing, innovation, or other factors. Number and comparative capabilities of competitors Competitive differences by country Local taxes

There has been growth in globalization in recent decades due to the following eight factors: Technology is expanding, especially in transportation and communications. Governments are removing international business restrictions.

Institutions provide services to ease the conduct of international business. Consumers know about and want foreign goods and services. Competition has become more global. Political relationships have improved among some major economic powers. Countries cooperate more on transnational issues. Cross-national cooperation and agreements.

Studying international business is important because: Most companies are either international or compete with international companies. Modes of operation may differ from those used domestically. The best way of conducting business may differ by country. An understanding helps you make better career decisions. An understanding helps you decide what governmental policies to support.

Managers in international business must understand social science disciplines and how they affect all functional business fields. Tom Travis, the managing partner of Sandler, Travis & Rosenberg, PA. and international trade and customs consultant, uses the Six Tenets when giving advice on how to globalize one's business. The [3] Six Tenets are as follows : 1. Take advantage of trade agreements: think outside the border Familiarize yourself with preference programs and trade agreements. Read the fine print. Participate in the process.

Seize opportunities when they arise. 2. Protect your brand at all costs You and your brand are inseparable. You must be vigilant in protecting your intellectual property both at home and abroad. You must be vigilant in enforcing your IP rights. Protect your worldwide reputation by strict adherence to labor and human rights

standards. 3. Maintain high ethical standards Strong ethics translate into good business. Forge ethical strategic partnerships. Understand corporate accountability laws.

Balance Of Payment

Record of all economic transactions between the residents of a country and the rest of the world Current account record of all recurring trade in merchandise and services, private gifts, and public aid between countries

trade deficit trade surplus

Capital account record of all long-term direct investment, portfolio investment, and capital flows

Dumping (pricing policy) From Wikipedia, the free encyclopedia This article is about the economics term. For industrial relations and social justice issue, see Social dumping. For the tax avoidance term, see SUTA dumping. In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market competition. Dumping can force established domestic producers out of a market and lead to monopolistic positions by the exporting nation. For example, a glut of Chinese garlic exports in the mid 2000s forced many North American producers to switch crops and leave the market. When the price of Chinese garlic soared in 2009, the shuttered North American businesses were unable to quickly re-enter the local market due to barriers to entry.
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Contents [hide] 1 Overview 2 Anti-dumping actions o o o o o 2.1 Legal issues 2.2 Definitions and extent 2.3 Procedures in investigation and litigation 2.4 Actions in the United States 2.5 Actions in the European Union 2.5.1 Chinese economic situation

3 Agricultural support o 3.1 European Union and Common Agricultural Policy

4 See also 5 References 6 External links [edit]Overview

A standard technical definition of dumping is the act of charging a lower price for a good in a foreign market than one charges for the same good in a domestic market. This is often referred to as selling at less than "fair value". Under the World Trade Organization (WTO) Agreement, dumping is condemned (but is not prohibited) if it causes or threatens to cause material injury to a domestic industry in the importing country.
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The term has a negative connotation as advocates of free markets see "dumping" as a form of protectionism. Furthermore, advocates for workers and laborers believe that safeguarding businesses against predatory practices, such as dumping, help alleviate some of the harsher consequences of such practices between economies at different stages of development (see protectionism). The Bolkestein directive, for example, was accused in Europe of being a form of "social dumping," as it favored competition between workers, as exemplified by the Polish Plumber stereotype. While there are very few examples of a national scale dumping that succeeded in producing a national-level monopoly, there are several examples of dumping that produced a monopoly in regional markets for certain industries. Ron Chenow points to the example of regional oil monopolies in Titan : The Life of John D. Rockefeller, Sr. where Rockefeller receives a message from Colonel Thompson outlining an approved strategy where oil in one market, Cincinnati, would be sold at or below cost to drive competition's profits down and force them to exit the market. In another area where other independent businesses were already driven out, namely in Chicago, prices would be increased by a quarter. [edit]Anti-dumping actions [edit]Legal issues If a company exports a product at a price lower than the price it normally charges in its own home market, it is said to be "dumping" the product. Opinions differ as to whether or not such practice constitutes unfair competition, but many governments take action against dumping to protect domestic industry. The WTO agreement does not pass judgment. Its focus is on how governments can or cannot react to dumping it disciplines anti-dumping actions, and it is often called the "antidumping agreement". (This focus only on the reaction to dumping contrasts with the approach of the subsidies and countervailing measures agreement.) The legal definitions are more precise, but broadly speaking, the WTO agreement allows governments to act against dumping where there is genuine ("material") injury to the competing domestic industry. To do so, the government has to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporters home market price), and show that the dumping is causing injury or threatening to cause injury. [edit]Definitions and extent While permitted by the WTO, General Agreement on Tariffs and Trade (GATT) (Article VI) allows countries the option of taking action against dumping. The Anti-Dumping Agreement clarifies and expands Article VI, and the two operate together. They allow countries to act in a way that would
[2]

normally break the GATT principles of binding a tariff and not discriminating between trading partnerstypically anti-dumping action means charging extra import duty on the particular product from the particular exporting country in order to bring its price closer to the normal value or to remove the injury to domestic industry in the importing country. There are many different ways of calculating whether a particular product is being dumped heavily or only lightly. The agreement narrows down the range of possible options. It provides three methods to calculate a products normal value. The main one is based on the price in the exporters domestic market. When this cannot be used, two alternatives are availablethe price charged by the exporter in another country, or a calculation based on the combination of the exporters production costs, other expenses and normal profit margins. And the agreement also specifies how a fair comparison can be made between the export price and what would be a normal price. Five percent rule According to Footnote 2 Anti-Dumping Agreement, domestic sales of the like product are sufficient to base normal value on if they account for 5 per cent or more of the sales of the product under consideration to the importing country market. This is often called the five per cent or home market viability test. This test is applied globally by comparing quantity sold of like product on the domestic market with quantity sold to importing market. Normal value cannot be based on the price in the exporters domestic market when there are no domestic sales. For example, if the products are sold only for foreign market, the normal value will have to be determined on another basis. Besides, the products may be sold on both markets but the quantity sold on the domestic market is small compared to quantity sold on foreign market. This situation often happens in countries with small home market (Hong Kong, Singapore for example). Large market, however, may face the same situation while the like products are sold in significant on both markets, some types of products are sold in larger quantity on foreign market while other types are vice versa. This is because of differences in consumer tastes, maintenance, etc. This leads to some exported types of products are sold in small quantities on the domestic market. Calculating the extent of dumping on a product is not enough. Anti-dumping measures can only be applied if the dumping is hurting the industry in the importing country. Therefore, a detailed investigation has to be conducted according to specified rules first. The investigation must evaluate all relevant economic factors that have a bearing on the state of the industry in question. If the investigation shows dumping is taking place and domestic industry is being hurt, the exporting company can undertake to raise its price to an agreed level in order to avoid anti-dumping import duty.

Factor Endowment

In economics a country's factor endowment is commonly understood as the amount of land, labor, capital, and entrepreneurship that a country possesses and can exploit for manufacturing. Countries with a large endowment of resources tend to be more prosperous than those with a small endowment, all other things being equal. The development of sound institutions to access and equitably distribute these resources, however, is necessary in order for a country to obtain the greatest benefit from its factor endowment. Nonetheless, the New World economies inherited attractive endowments such as conducive soils, ideal weather conditions, and suitable size and sparse populations that eventually came under the control of institutionalizing European colonists who had a marginal economic interest to exploit and benefit from these new discoveries. Colonists were driven to yield high profits and power by reproducing such economies vulnerable legal and political framework, which ultimately led them towards the paths of economic developments with various degrees of inequality in human capital, wealth, and political power. [edit]Factor endowments in the New World A classical example often cited to emphasize the importance of institutions in developing a country's factor endowment is that of North America (the United States and Canada) around the turn of the 19th to 20th century. It is commonly argued that these countries benefited greatly by borrowing many of Britain's institutions and laws. While North America undoubtedly gained from this borrowing, this does not fully explain why the rest of the New World (which also enjoyed a large factor endowment and access to British institutions) did not develop in a similar way. In fact, data shows that connection between the prosperity of the colonizing and the wealth of the colony was weaker than many thought. The future United States and Canada surpassed several British established colonies in the Caribbean, such as Barbados, Jamaica, Belize, and Guyana. In fact, the United States converged on the world economic leader, measured in GDP/capita, the UK. In 1910, the United States overtook the UK and began to diverge from it until about the 1950s. This shows that there must have been another explanation as to why the future United States and Canada developed at a faster rate than other [1] colonies in the region. Kenneth Sokoloff and Stanley Engerman argue in their article "History Lessons: Institutions, Factor [2] Endowments, and Paths of Development in the New World" that the difference between North America and the rest of the New World was not just in institutions but in the nature of their respective factor endowments. Countries like Brazil and Cuba had an extremely large yet concentrated factor endowment that tended towardexploitation, a hierarchical social system and exhibited economies of scale. Cuba and Brazil primarily grew lucrative products such as cotton, coffee, and sugar, which required hand picking and most efficiently picked when picked by hands in unison, whereas the United States was generally a wheat producer. The true advantage of the United States and Canada lay in a more equitable distribution of factors that could not be exploited on an extremely large scale. This distribution led to a more open and opportunistic economy, and eventually to long-term prosperity. For example, because wealth and power were distributed relatively equally in the United States and in Canada, these two countries led the rest of the Americas in providing education on a broader scale. Education is an important factor to improve technology in order to boost productivity, which is the reason that US and Canada surpassed the others. Greater access to education allowed for greater investment in human capital, which increases productivity and contributed to the United States and Canada's economic growth. According to Sokoloff and Engerman's article "History [3] Lessons: Institutions, Factors Endowments, and Paths of Development in the New World," not only the United States had relatively equal distribution of wealth, it had relatively homogeneous population, political power and human capital. United States and Canada's relatively equal distribution of wealth, amount of human capital and political power utimately affected development of institution, extent of franchise, and public education that persist and influence growth of the country. The open franchise in the United States and Canada was possibe due to the large voting body of middle class and small elites. The open franchise brought elimination of wealth and literary requirement by 1940 in Canada and the United States (literacy requirement was still enforced in US southern regions only). Again, the open franchise was possible because the United States endowed a land suitable for wheat growing thus had a large body of middle class unlike Brazil and Cuba where they exhibited small elites, some overseers and large slave population. United States, then, outgrows other New World countries and eventually diverged from Cuba and Brazil in late eighteen and early nineteen century.

Sokoloff and Engerman hypothesize that in societies founded with greater inequality, the elites gained [4] more power to influence the choice of legal and economic institutions. In those countries which are inequal, small elites restrict majority people's rights, such as education and votes, to perpetuate the social structures and continue to make themselves "elites." The U.S. began its economic growth largely through slave labor and trade of the output of that labor. As the elites enacted policy to generate more economic equality, for example by increasing literacy rates, the U.S. GDP per capita pulled ahead of other long-since established countries along with the literacy rates. It is essential to note that factor endowments played a crucial role in shaping the colonies institutions and economic growth; colonies with a richer quality of soil grew cash crops such as sugar, coffee, and cotton, which were most efficiently grown using plantation systems. As such, the demand for not only slave labor but also peonage within these colonies grew. Due to the vast inequality that the society developed due to a small elite population in comparison to the vast laborer population, they were able to maintain the wealth and power within the elite class via establishing a guarded franchise. The inequalities within the cash crop colonies resulted in their economy not being able to expand and grow as fast as the U.S and Canada, due to restrictive policies. Those policies in inequal countries curb the intellectual development of most people who are only required to do simple manual jobs; however, US and Canada encourage their people to take part in education. As a result, US and Canada excel with higher productivities which are supported by advanced technology.

Political Stability in Business Environment

No matter how attractive the economic prospects of a particular country or region are, doing business there might prove to be financially disastrous if the host government(s) inflict(s) heavy financial penalties on a company or if unanticipated events in the political arena lead to the loss of incomegenerating assets. The political environment in which the firm operates (or plan to operate) will have a significant impact on a company's international marketing activities. The greater the level of involvement in a foreign markets, the greater the need to monitor the political climate of the countries business is conducted. Changes in government often result in changes in policy and attitudes towards foreign business. Bearing in mind that a foreign company operates in a host country at the discretion of the government concerned, the government can either encourage foreign activities by offering attractive opportunities for investment and trade, or discourage its activities by imposing restrictions such as import quotas, etc. An exporter that is continuously aware of shifts in government attitude, will be able to adapt export marketing strategies accordingly. Nearly all governments today play active roles in their countries' economies. Although evident to a greater or lesser extent in most countries, government ownership of economic activities is still prevalent in the former centrally planned economies, as well as in certain developing countries which lack a sufficiently well developed private sector to support a free market system. The implications of government ownership to a company marketing abroad might be that certain sectors of the foreign market are the exclusive preserve of government enterprise or that the company is obliged to sell directly to a state trading organisation. In either case, the company's influence on the market is greatly reduced. Similarly, if an exporter is seeking to establish a subsidiary in a country where there is a high degree of state influence over the factors of production, the investor should bear in mind that marketing activities in the country concerned may be restricted and that the so-called controllable elements of the marketing mix (see Chapter 4) will be less controllable. Of primary concern to an exporter should be the stability of the target country's political environment. A loss of confidence in this respect could lead to a company having to reduce its operations in the market or to withdraw from the market altogether. One of the surest indicators of political instability is a frequent change in regime. Although a change in government need not be accompanied by violence, it often heralds a change in policy towards business, particularly international business. Such a development could impact harshly on a firms long-term international marketing programme. Reflected in a government's attitudes and policies towards foreign business are its ideas about how best to promote national interest in the light of the country's economic and political resources and objectives. Foreign products and investment seen to be vital to the growth and development of the economy often receive favourable treatment from the government in the form of reduced tax, exemption from quotas, etc. On the other hand, products considered by a government to be nonessential, undesirable, or a threat to local industry are frequently subjected to a variety of import restrictions such as quotas and tariffs. It is also important to be aware of the nature of the relationship between South Africa and the foreign target market. This was a major consideration during South Africa's political isolation. Fortunately, South Africa's international relations have normalised and today South Africa is viewed very favourably, from a political perspective, by the rest of the world. The political environment is connected to the international business environment through the concept of political risk. Political risk

Political risk can be defined as the impact of political change on the export firm's operations and decision-making process. Political risk is determined differently for different companies, as not all of them will be equally affected by political changes. For example, industries requiring heavy capital investment are generally considered to be more vulnerable to political risk than those requiring less capital investment. Vulnerability stems from the extent of capital invested in the export market, e.g. capital-intensive extracting or energy-related businesses operating in the foreign market are more vulnerable than manufacturing companies exporting from a South African base. Political risk is of a macro nature when politically inspired environmental changes affect all foreign investment. It is of a micro nature when the environmental changes are intended to affect only selected fields of business activity or foreign firms with specific characteristics, (possibly by expropriation). When business is conducted in developing countries, the risks of greatest concern are civil disorder, war and expropriation. When business is conducted in industrialised countries, labour disruptions and price controls are generally seen to pose the greatest threats to a company's profitability. Expropriationis the take-over of a foreign firm located in a host country, by the host country's government. All organisations doing business abroad should be aware of the fact that what they do could be the object of some political action. Hence, they need to recognise that their success or failure could depend on how well they cope with political decisions, and how well they anticipate changes in political attitudes and policies.

Role of culture in business environment

The importance of culture in a global environment Nowadays, communications, transportation and other technologies allows almost any businesses to be global. From simply creating a web-site or physically opening a store in a foreign country, understanding local culture is often overlooked, and caused more business failure then any other business aspect. But what is culture? How different can a culture be? How to understand and adapt to a different culture? We will try to answer those questions during this review. Culture (from the Latin cultura stemming from colere, meaning "to cultivate,") generally refers to patterns of human activity and the symbolic structures that give such activities significance and importance. Cultures can be "understood as systems of symbols and meanings that even their creashmetors contest, that lack fixed boundaries, that are constantly in flux, and that interact and compete with one another" Different definitions of "culture" reflect different theoretical bases for understanding, or criteria for evaluating, human activity. Culture is manifested in music, literature, lifestyle, food, painting and sculpture, theater and film and similar things. Although some people identify culture in terms of consumption and consumer goods (as in high culture, low culture, folk culture, or popular culture), anthropologists understand "culture" to refer not only to consumption goods, but to the general processes which produce such goods and give them meaning, and to the social relationships and practices in which such

objects and processes become embedded. For them, culture thus includes art, science, as well as moral systems.` Travelling trough different parts of the world will open your eyes and help you see how much different peoples behavior change from one country to another. For example travelling in Europe will show you how within a couple hour of driving you can go trough three countries that are all different: They speak a different language, listen to different music, dress differently, look different, what they conceder acceptable differs from one place to another etc. Unfortunately, US culture is really specific and ethnocentric, and having such a vast country where you can go skiing, go to a tropical island and more without leaving the country, I found that out of all the country I have lived in or been US is the only one where people dont travel outside their country. Nowadays in a global environment where at one point you will have to deal with a Chinese supplier or a Mexican customer. Another important fact of the US culture is that while at school only few learn how to speak a foreign language, where most of the countries educational system will teach all students at least one or two languages on top of the national language. And language is the first barrier to cultural differences. Now why does travelling, being part of an ethnocentric culture or speaking foreign languageshas anything to do with business? From a multi-national corporation to a small online store everybody as the opportunity to see the whole world as one giant marketplace and be successful importing, exporting, selling, finding supplier in another country. If you are trying to create an on-line custom dress shirt business, why buy US fabric and produce the shirts locally where fabrics are not the best quality and expensive and local worker will cost you a lot more to produce less of a job? Buy your fabric from Italy, get the shirts done in China, and sell it throughout the whole world! In this case you will have to deal with cultures that are different from each other and different from yours. I realize that if you have been taught since a younger age how to adapt to various culture and environment, learn different language it will be easier and almost natural for you to adapt and be successful in your international business venture. No matter how many classes, or international business consultant you see in order to prepare you for a meeting with foreigners, there is nothing worst then someone forcing himself and not acting naturally. Also most of cultures cannot be learned on paper they can only be lived in order to be understood, and the more cultures you already understood the easier the next one will be ( it is like learning a new language). We saw what culture is and how important it is start as early as possible to travel and experience the culture instead of just reading about it, but how different can a culture really be? After working for several years for a consulting firm that dealt mainly with international mergers and deals in general I understood how what you learned from a vacation in Morocco talking with locals and observing them is applicable to doing business with executives or government representatives in Morocco. Here are some example of cultural differences and how to deal with it: When doing business with North African countries you ll be surprised of how warm and welcoming are the people, most business man might kiss and hug to greet each other, always talking with hand gesture, and touching each other like grabbing your hand, shoulder and always talking really close. In the US relationship are cold, a hand shake in the beginning and ending of a meeting, if someone start to touch you or get to close the American will feel nervous (and might think of suing the person). In this case adapt yourself and dont be shy! Grab your interlocutors hand and get even closer

when you have an important message to send! They will respect you even more because they know your culture is different. If you are trying to get a deal done with a French company, dont expect your email to be returned instantly and to do a deal in a day. Everything happens around the dinner or lunch table and a good bottle of wine. Even if in your own company you can get fired for having a drink between 9 and 5, there if you refuse to drink, laugh and be friendly chances are people wont trust you and your deal will fall apart. Finally one of the greatest examples was when we were representing a German company to help them sell buildings that they owned in Berlin. The prospective customer was a British investment bank. The German executives (like in many other countries) were expecting to receive XXXmillions for the buiding and Xmillion on a swiss bank account. Arriving at meeting in London the British executives told us that they couldnt understand why their bid was the highest and reasonable but couldnt get the deal signed. We try to explain them that they could lower their bid but that the rest and maybe more needs to be transferred to a special bank account. The British executives could not understand what that money was for! After explaining them more and more specifically without compromising our German customer they finally understood and told us that there is no way for them to enter such practice, and were almost shock and the deal never went trough although they might have been able to get the project for a better deal. This is to show you that different countries have different values overall and could result in business success or failure by itself even if all other factors are positive. Now lets study a specific countrys culture to try to understand its cultural differences. Indias culture is one of the oldest and most unique in the world. Indian culture varies throughout the country. People inhabiting the southern, northern, and northeastern areas have their own cultures, and almost every state has defined its own cultural niche. India is a vast country, with a variety of geographical features and climatic conditions. Indias vast history is rooted in some of the worlds most ancient civilizations and has fostered the growth of four major world religions: Hinduism, Buddhism, Jainism and Sikhism. Indian culture is a mixture of different styles and influences. In the matter of cuisine, for instance, the northern and southern areas are dynamically different than other regions of the country. Festivals in India have vivid colors, enthusiasm, prayers and rituals. In the world of music, there are varieties of folk, popular, pop, and classical music. The classical tradition of music in India includes the Carnatic and the Hindustani music. India, a place of wide variety, is a fascinating mix of ancient culture, enormous contrasts and architectural beauty. The Indian culture has existed through the ages precisely for the reasons of antiquity, unity, continuity and the universality of its nature. Thus within the boundaries of Indian culture one can identify Indian type of Music, Indian type of Dance, and Indian type of Cinema. Indian culture stresses the importance of treating guests with the best possible manners and taking care of them as if they are part of the family itself. Even if there is not enough food on the table, a family will make sure its guest is full before leaving. The concepts of respecting one another and having a helpful nature are other important aspect of Indian culture. Indian culture strives to distribute joy and happiness as well as sharing sadness and pain. Nowadays globalization has reached the Indian shores creating a culture that has extended globally, adapting to other cultures (dressing, arts etc.) but never forgetting its roots and traditions. Like many other countries around the world, doing business in India requires knowledge of the English language. English is the language of international business and, although

the government only recognizes Hindu, most schools teachEnglish and a vast majority of Indians speak English (especially in a business environment). One of the most critical factors to understand when attempting to conduct business in India is the importance placed on hierarchy and the respect Indians pay to seniority. In the United States, elders are not necessarily as respected simply because of their age when compared to many other cultures. Indian society operates within a framework of strict hierarchy that defines people's roles, status, and social order. When entering a meeting it is customary to greet the oldest or the highest ranked person in the room first. Others are not allowed to oppose this decision. For example, manual labor is only carried out by the "peon" (roughly equivalent to a 'runner'). It is not uncommon for the moving of a desk to take hours. This is because no one in the office will carry out this labor-intensive task except the "peon" who, if otherwise engaged, cannot do so. Meeting and greeting etiquette are two very important factors when conducting business in India, which generally requires a handshake. Indians use Namaste where ones palms are brought together at chest level with a slight bow of the head. A foreign businessperson using Namaste is a sign that he or she understands and respects Indian culture. When addressing an Indian that you know personally, it is important to use the appropriate formal title, whether it is Professor, Doctor, Mr., Mrs. or, if you do not know the proper title, Sir or Madam. Like many other cultures, business cards should be exchanged at the first meeting. It is important to receive and give the business card with your right hand and then put it away respectfully, not to simply push it into a trouser pocket as that could be seen as a sign of disrespect. When conducting business in the United States, it is not unheard of for a deal to happen in matter of hours. In India ones counterpart must believe they can trust and understand you, even on a personal level, before considering a discussion on business related matters. Indians only deal favorably with those they know and trust, even at the expense of lucrative deals. It is vital that a good working relationship is founded with any prospective partner. This must take place both on a business level (demonstrating strong business skills) and on a personal level. It is critical not to become frustrated if after a week of meetings nothing concrete occurs. This is part of the culture. It is also important to remain patient and not too pushy because the closure process is likely to drag out. Indians do not only base business decisions on statistics, data, and exciting PowerPoint presentations. They use intuition, feeling, and faith to guide them. It is important to always exercise patience, show good character, and refrain from exhibiting frustration or anger. When negotiating, it is a good idea to avoid high-pressure tactics and confrontation. Criticisms and disagreements should be expressed only with a diplomatic approach. Indian society believes that saying "no" is rude due to the possibility of causing disappointment or offense. If terms such as "we'll see or "possibly" are used in a response to a proposal, then the Indian businesspeople are most likely saying 'no', but are having a difficult time. When negotiations successfully end, always maintain relationships and host a celebration dinner as it is part of their local customs. To conclude, we saw the importance of culture in a business environment and how important it is to live a culture instead of just reading about it, and that the sooner you acquire an open mind and a global mind the easier adapting to new culture will become and the more natural you will become. Upon reviewing some of the key aspects of culture and their application to a business environment, it is easily understandable how one can fail when conducting business simply due to cultural differences. Often, people are afraid of differences but you need to know that people

from another country know about these cultural barriers and wont expect much from you and often time as a foreigner you will be gratified a lot for trying, and that will give you an hedge against the competition.

Consequences of globalisation

The Consequences of Globalization Mainly, the general views about globalization can be categorized into four main perspectives that are economic, technological, development, and societal respectively. The Economic Perspective: of globalization is the growth of world trade as a proportion of output (the ratio of world imports to gross world product, GWP, has grown from some 7% in 1938 to about 10% in 1970 to over 18% in 1996). It is reflected in the explosion of foreign direct investment (FDI): FDI in developing countries has increased from $2.2 billion in 1970 to $154 billion in 1997. It has resulted also in national capital markets becoming increasingly integrated, to the point where some $1.3 trillion per day crosses the foreign exchange markets of the world, of which less than 2% is directly attributable to trade transactions. The Technological Perspective: involves Information Communication Technology (ICT) what explains this globalization? It certainly lies in the development of technology. The costs of transport, of travel, and above all the costs of communicating information have fallen dramatically in the postwar period, almost entirely because of the progress of technology The Development Perspective: is the most controversial and important of all. It touches the heart of dichotomy which today globalization phenomenon faces. It tries to find the clues of the increasing divide between the rich and the poor, the existing cleavage between the ICT haves and have-nots, under the umbrella of one world concept of integrated markets and capital flows. Above all it challenges the greatest protagonists of globalization, the global institutions of World Bank, IMF, and even WTO one hand. One the other it has created a massive wave of antagonists threatening the industrial nations through anti-globalization relays, protests, and strikes. The Societal Perspective: focuses on some key factors which have become pivotal to ensure the longevity of success of developed nations and that are their sensitivity to the community, cultural norms, and environmental care. This includes the condition of human rights, women empowerment,

gender sensitization, civic education, status of women in the society, political status becoming more democratic, freedom of speech, rule of law, equal access to resources and level of education. Globalization is also a key to future environmental changes. Decisions made by the private sector, in its search for comparative advantages, are increasingly affecting where and how people live and work. Globalization is having a major impact on population migration, population distribution, particularly through accelerating urbanization trends, and growth of mega-cities. These population changes are in turn impacting on security, governance, poverty, health and environmental factors Globalization research raises many questions with respect to contemporary forms of power-economic, political, cultural--as well as strategies to challenge power and promote alternatives. To what extent do globalization processes produce global convergence, for example, towards economic insecurity? Do local conditions produce "varieties of globalization" at local levels? Are states overwhelmed by corporate power? To what extent do states shape the new global economy? With respect to questions of resistance, in what ways do globalization processes facilitate or constrain new opportunities for collective action? In the age of transnational corporate institutions, in what ways has social activism responded to this transnational context?

Causes of Globalisation

Causes of Globalization While it is truethat state ventures (or adventures) have at times driven the process, e.g. the colonial conquests, the globalization process has largely reflected market forces, specifically, the exploitation by large and smaller businesses in the world of benefits from trade in commodities, goods, services, capital, and even labor, and of opportunities for new investments and markets. The process of global economic integration was perpetrated at the behest of World War II, when the leaders of Britain and the US helped establishing the World Bank and International Monetary Fund in 1944 to promote a liberal, capitalist world to counter the shadows of Socialism and Marxism. The loans are granted by IMF and WB on the condition that the borrowing country will reduce the state's role in the economy, lower barriers to imports, remove restrictions on foreign investment, eliminate subsidies for local industries, reduce spending for social welfare, cut wages, devalue the currency, and emphasize production for export rather than for local consumption. Such conditions imposed laid the basic foundation to open economies to steer the mechanism of economic integration giving birth to the World Trade Organization. By mid 1950s Pakistan had become a favorite candidate for receiving the benefits pledged by President Truman, having joined the network of international defense treaties with the United States. It marked the beginning of an enduring trend in Pakistan to follow every one of the strategies of development devised successively in Washington and promoted globally. Pakistan's own Dr. Mahbub-

ul-Haq called this trend the pursuit of "development fashions" and listed it among his "seven sins of economic planners." Before development theory and practice could be redesigned in any significant way to address the lingering issue of social justice it was literally hijacked to serve the agenda of a more aggressively mobile global capital which aimed at a deeper integration of all national economies into the structures and ideological framework of neo-liberal globalization. Foreign debt is the main lever used by donor countries and multilateral aid organizations to break resistance to the imposition of external economic agendas and development policies.

Challenges to Globalisation

Globalization poses four major challenges that will have to be addressed by governments, civil society, and other policy actors. One is to ensure that the benefits of globalization extend to all countries. That will certainly not happen automatically. The second is to deal with the fear that globalization leads to instability, which is particularly marked in the developing world. The third challenge is to address the very real fear in the industrial world that increased global competition will lead inexorably to a race to the bottom in wages, labor rights, employment practices, and the environment. And finally, globalization and all of the complicated problems related to it must not be used as excuses to avoid searching for new ways to cooperate in the overall interest of countries and people. Several implications for civil society, for governments and for multinational institutions stem from the challenges of globalization. Civil society organizations concerned with development have traditionally focused on aid and resource transfers; they now are going to have to broaden their agenda to deal with the much more complex issues of trade and investment, international financial flows, environment, and migration, among others. Civil society organizations in the old industrial countries also will have to deal with the backlash against global ization, which is producing a growing unwillingness to support multilateral cooperation. Governments are going to have to decide what they mean by civil society and to identify new ways of dealing with its organizations. At the Overseas Development Council, we define civil society broadly to encompass not only development and advocacy groups, but also corporations, financial institutions, think tanks, foundations, and a range of other groups that are not part of government. But governments and other actors need to decide whether civil society is simply an effectiveand even cheapway of delivering social programs, or whether it is good in and of itself, an essential component of a democratic society. In other

words, they are going to have to be much more precise about the purposes of working with civil society groups and about how they fund them. Then, there is a whole set of critical questions for the multilateral institutions, particularly concerning participation and transparency. These issues are extremely difficult because these remain governmental institutions, and governments often do not welcome the participation of civil society in decisions. Finally, there is a need for high-level political discussions among leaders from the old industrial countries, the emerging economies, and the countries that risk marginalization by globalization. We are urging the Group of Eight this year in London to call for a new summit on globalization in order to begin a discussion of maximizing its benefits and minimizing its costs.

Limits to Globalisation

Does globalization have any limits? We have all become familiar with the ongoing debate about the desirability of globalization. What we have not seen much of is a discussion of whether globalization has any limits. Implicit in both the pro- and antiglobalization positions is the assumption that unless globalization is stopped either by a world war, as happened in 1914, or by a conscious political decision, as antiglobalizationists advocate, it will continue until the world has become a seamless, frictionless marketplace. Pro-globalizationists argue that such a world will be far more prosperous and peaceful than today's; the antis predict a world of universalized poverty and terrorism. On the balance, I agree with the globalizers. However, there are some limits to the process. To date, they have been largely theoretical; sheer protectionist obstruction by entrenched interests has been so powerful that the other issues have been barely worth considering. However, enough progress has been made on lowering barriers that they have begun to be significant, and should be considered. The world has benefited immensely from the general liberalization of trade that began after World War II, and most particularly in the past two decades. Entire regions, such as East Asia, have been lifted out of the most wretched poverty into a comfortable standard of living. Country after country has succumbed to pressures to lower trade barriers and permit the free flow of capital, labor and products. Those that remain closed are for the most part the poorest and least free, and certainly are not shining enticements for other countries to follow the anti-globalization path. From this, however, we should not extrapolate that globalization along current lines can expand until the world is a single uniform economic space. Limiting factors difficult to overcome might well emerge to establish the limits of the process. It's worth thinking about what a few such limits might be.

One is public health. The epidemic of severe acute respiratory syndrome, SARS, serves as a timely reminder that medicine has not brought immunity from disease but only better tools for fighting it. It is likely no accident that Canada, with its higher immigration rates and looser border practices than the United States, was the center of SARS outbreaks in North America. We have all become familiar with the ongoing debate about the desirability of globalization. What we have not seen much of is a discussion of whether globalization has any limits. History has seen repeated cycles of expansion of trade suddenly cut off because of plague. Now cheap air travel, crowded megalopolises and mass movement of populations, have created the potential for very rapid spread of lethal diseases on a global basis. Several rounds of such outbreaks could create a set of quarantine and inspection processes for movement of goods and people that could substantially raise the cost of international trade.

Additionally, SARS is teaching us yet again that strong civil society is essential to fighting disease effectively. Without a tradition of honest public service, and without a tradition of independent entities in society to watch and report on administrative bodies, from media to legislatures, it is too easy for bureaucracies to hide bad news and their own inefficiencies. By covering up SARS in its early stages, China reminds us that its ambition to be a first-class player in world trade and affairs still runs ahead of its development of civil society, and that a strong civil society is and must be the entry ticket to first-class status. Security issues in their own way also act as a permanent barrier to full globalization, and one that cannot merely be wished away. The war in Iraq reminded us that substantial sectors of the economy, particularly in transportation and communications, are intimately tied in to national security. Mobilization of the Civil Reserve Air Fleet, which calls civilian airliners into military service, reminded us that who owns and controls airlines is a national security issue. Thus barriers such as the current limits on foreign ownership and control of U.S. airlines and certain communications facilities are unlikely to go away any time soon. At the same time, the burden of SARS, on top of the burdens of war and terrorism, have demonstrated the airlines' critical need for capital. Free international flow of capital into the U.S. airline industry, both via international investment and merger, would be a significant boost at a critical time. Yet it is hard to imagine the Pentagon being happy at the prospect of one of the major airlines coming under the wing of, say, Air France. Finally, continuing terrorism and fear of terrorism will continue to have a dampening effect on international travel and trade. At worst, fear of terrorist use of cargo containers to carry nuclear, biological or chemical weapons into target nations could substantially increase inspection costs for such trade. Institutions of globalization need to be rethought - the World Trade Organization and global universally targeted trade initiatives may have picked most of the lowhanging fruit available to them.

At a minimum, fear of terrorist activities will reduce the willingness of business people to travel to and do business in "soft target" nations, those too poor to effectively screen out and fight international terrorists. The October 2002 bombings on Bali may be a better example of future attacks than the World Trade Center assault; as the United States and other rich, strong nations improve security, the natural tendency will be to move terrorist activities to poor nations with less effective security. Barring a runaway episode of epidemic disease, war or terrorist phenomena, it is likely that these factors will merely remain constraints on globalization, and not showstoppers. However, as experience grows with both the continued deepening of globalization, and the continued emergence of long-term limiting factors, we will begin to have a better feel for the texture and contours of a globalizing world. Rather than happening at a constant pace in all directions, globalization is more likely to continue to happen unevenly and along certain lines and vectors. Certain links will be most likely to happen

between equally strong civil societies; others will happen along geographically regional lines; still others will happen along lines of shared language and culture. These realities also suggest that the institutions of globalization should be somewhat rethought. Global institutions such as the World Trade Organization, and global, universally targeted trade initiatives may have picked most of the low-hanging fruit available to them. From here on, it may be that merely lowering tariff barriers further and eliminating obvious discriminatory rules may be close to its useful limits, while other concerns, particularly in public health and national security, may just not be addressable through universal rules. Much beneficial work on globalization remains to be done, but it may be that attention will now shift to examining ways of linking particular sets of nations and economies that can be integrated without the problems that would stem from a universal application of such rules. Economists have tended to dislike such particularist solutions, and always tend toward the universal. But the world has more factors than their models can incorporate, and it may be that the costs such factors impose can no longer be kept in the margins.

Multinational Enterprises

A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation enterprise that manages production or delivers services in more than one country. It can also be referred to as [citation needed] an international corporation. The International Labour Organization (ILO) has defined an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries. Some multinational corporations are very big, with revenues that exceed some countries' gross domestic products (GDPs). Multinational corporations can have a powerful influence in local economies, and even theworld economy, and play an important role in international relations and globalization. Contents [hide] 1 International power o o o 1.1 Tax competition 1.2 Market withdrawal 1.3 Patents

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2 Transnational Corporations 3 Criticism of Multinationals 4 See also 5 References 6 External links [edit]International power [edit]Tax competition

Multinational corporations are important factors in processes of globalization. National and local governments often compete against one another to attract MNC facilities, with the expectation of increased tax revenue, employment, and economic activity. To compete, political entities may offer MNCs incentives such as tax breaks, pledges of governmental assistance or subsidized infrastructure, or lax environmental and laborregulations. These ways of attracting foreign investment may be criticized as a race to the bottom, a push towards greater autonomy for corporations, or both. On the other hand, economist Jagdish Bhagwati has argued that in countries with comparatively low labor costs and weak environmental and social protection, multinationals actually bring about a 'race to the top.' While multinationals will certainly see a low tax burden or low labor costs as an element of comparative advantage, Bhagwati disputes the existence of evidence suggesting that MNCs deliberately avail themselves of lax environmental regulation or poor labor standards. As Bhagwati has pointed out, MNC profits are tied to operational efficiency, which includes a high degree of standardisation. Thus, MNCs are likely to adapt production processes in many of their operations to conform to the standards of the most rigorous jurisdiction in which they operate (this tends to be either the USA, Japan, or the EU). As for labor costs, while MNCs clearly pay workers in developing countries far below levels in countries where labor productivity is high (and accordingly, will adopt more labor-intensive production processes), they also tend to pay a premium over local labor rates of [2] 10 to 100 percent. Finally, depending on the nature of the MNC, investment in any country reflects a desire for a medium- to long-term return, as establishing plant, training workers, etc., can be costly. Once established in a jurisdiction, therefore, MNCs are potentially vulnerable to arbitrary government intervention such as expropriation, sudden contract renegotiation, the arbitrary withdrawal or compulsory purchase of licenses, etc. Thus, both the negotiating power of MNCs and the 'race to the bottom' critique may be overstated, while understating the benefits (besides tax revenue) of MNCs becoming established in a jurisdiction. [edit]Market withdrawal Because of their size, multinationals can have a significant impact on government policy, primarily [3] through the threat of market withdrawal. For example, in an effort to reduce health care costs, some countries have tried to force pharmaceutical companies to license their patented drugs to local competitors for a very low fee, thereby artificially lowering the price. When faced with that threat, multinational pharmaceutical firms have simply withdrawn from the market, which often leads to limited availability of advanced drugs. In these cases, governments have been forced to back down from their efforts. Similar corporate and government confrontations have occurred when governments tried to force MNCs to make their intellectual property public in an effort to gain technology for local entrepreneurs. When companies are faced with the option of losing a core competitive technological advantage or withdrawing from a national market, they may choose the latter. This withdrawal often causes governments to change policy. Countries that have been the most successful in this type of [citation confrontation with multinational corporations are large countries such as United States and Brazil needed] , which have viable indigenous market competitors. [edit]Patents Many multinational corporations hold patents to prevent competitors from arising. For example, Adidas holds patents on shoe designs, Siemens A.G. holds many patents on equipment [4] and infrastructure and Microsoftbenefits from software patents. The pharmaceutical companies lobby international agreements to enforce patent laws on others. [edit]Transnational Corporations A Transnational Corporation (TNC) differs from a traditional MNC in that it does not identify itself with [5] one national home. Whilst traditional MNCs are national companies with foreign subsidiaries, TNCs [6] spread out their operations in many countries sustaining high levels of local responsiveness. An example of a TNC is Nestl who employ senior executives from many countries and try to make [7] decisions from a global perspective rather than from one centralised headquarters. However, the terms TNC and MNC are often used interchangeably. [edit]Criticism of Multinationals Main article: Anti-corporate activism

The rapid rise of multinational corporations has been a topic of concern among intellectuals, activists and laymen who have seen it as a threat of such basic civil [citation needed] rights as privacy. They have pointed out that multinationals create false needs in consumers and have had a long history of interference in the policies of sovereign nation [citation needed] states. Evidence supporting this belief includes invasive advertising (such as billboards, television ads, adware, spam, telemarketing, child-targeted advertising, guerrilla marketing), massive corporate campaign contributions in democratic elections, and endless global news stories about corporate corruption (Martha Stewart and Enron, for example). Anti-corporate protesters suggest that corporations answer only to shareholders, giving human rights and other issues almost no [8] consideration. Films and books critical of multinationals include Surplus: Terrorized into Being Consumers, The Corporation, The Shock Doctrine, Downsize This, Zeitgeist: The Movie and others.

International Marketing

The Oxford University Press defines global marketing as marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives. Oxford University Press Glossary of Marketing Terms. Here are three reasons for the shift from domestic to global marketing as given by the authors of the textbook, Global Marketing Management3rd Edition by Masaaki Kotabe and Kristiaan Helsen, 2004. Contents [hide] 1 Worldwide competition 2 Evolution to global marketing o o 2.1 Domestic marketing 2.2 International marketing

3 Global marketing specialization 4 Elements of the global marketing mix o o o o 4.1 Product 4.2 Price 4.3 Placement 4.4 Promotion

5 Advantages and Disadvantages o 5.1 Advantages 5.1.1 Reach 5.1.2 Scope 5.1.3 Interactivity 5.1.4 Immediacy 5.1.5 Demographics and targeting

5.1.6 Adaptivity and closed loop marketing

5.2 Disadvantages

6 See also 7 References 8 Further reading 9 External links [edit]Worldwide competition One of the product categories in which global competition has been easy to track in U.S.is automotive sales. The increasing intensity of competition in global markets is a challenge facing companies at all stages of involvement in international markets. As markets open up, and become more integrated, the pace of change accelerates, technology shrinks distances between markets and reduces the scale advantages of large firms, new sources of competition emerge, and competitive pressures mount at all levels of the organization. Also, the threat of competition from companies in countries such as India, China, Malaysia, and Brazil is on the rise, as their own domestic markets are opening up to foreign competition, stimulating greater awareness of international market opportunities and of the need to be internationally competitive. Companies which previously focused on protected domestic markets are entering into markets in other countries, creating new sources of competition, often targeted to price-sensitive market segments. Not only is competition intensifying for all firms regardless of their degree of global market involvement, but the basis for competition is changing. Competition continues to be market-based and ultimately relies on delivering superior value to consumers. However, success in global markets depends on knowledge accumulation and [1] deployment. tiwana. [edit]Evolution to global marketing Global marketing is not a revolutionary shift, it is an evolutionary process. While the following does not apply to all companies, it does apply to most companies that begin as domestic-only companies. [edit]Domestic marketing A marketing restricted to the political boundaries of a country, is called "Domestic Marketing". A company marketing only within its national boundaries only has to consider domestic competition. Even if that competition includes companies from foreign markets, it still only has to focus on the competition that exists in its home market. Products and services are developed for customers in the home market without thought of how the product or service could be used in other markets. All marketing decisions are made at headquarters. The biggest obstacle these marketers face is being blindsided by emerging global marketers. Because domestic marketers do not generally focus on the changes in the global marketplace, they may not be aware of a potential competitor who is a market leader on three continents until they simultaneously open 20 stores in the Northeastern U.S. These marketers can be considered ethnocentric as they are most concerned with how they are perceived in their home country. [edit]International marketing If the exporting departments are becoming successful but the costs of doing business from headquarters plus time differences, language barriers, and cultural ignorance are hindering the companys competitiveness in the foreign market, then offices could be built in the foreign countries. Sometimes companies buy firms in the foreign countries to take advantage of relationships, storefronts, factories, and personnel already in place. These offices still report to headquarters in the home market but most of the marketing mix decisions are made in the individual countries since that staff is the most knowledgeable about the target markets. Local product development is based on the needs of local customers. These marketers are considered polycentric because they acknowledge that each market/country has different needs. [edit]Global marketing specialization

Global marketing is a field of study in MBA. When it comes to global marketing strategies, the Internet plays a highly significant role as the most powerful business weapon in today's globalized business world. [edit]Elements of the global marketing mix The Four Ps of marketing: product, price, placement, and promotion are all affected as a company moves through the five evolutionary phases to become a global company. Ultimately, at the global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.) it is impossible to launch identical marketing plans worldwide. Nisant Chakram(Marketing Management) [edit]Product A global company is one that can create a single product and only have to tweak elements for different markets. For example, Coca-Cola uses two formulas (one with sugar, one with corn syrup) for all markets. The product packaging in every country incorporates the contour bottle design and the dynamic ribbon in some way, shape, or form. However, the bottle or can also includes the countrys native language and is the same size as other beverage bottles or cans in that same country. [edit]Price Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs, etc.), and much more. Additionally, the products position in relation to the competition influences the ultimate profit margin. Whether this product is considered the high-end, expensive choice, the economical, low-cost choice, or something in-between helps determine the price point. [edit]Placement How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example again, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the products position in the market place. For example, a high-end product would not want to be distributed via a dollar store in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique. [edit]Promotion After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global companys marketing budget. At this stage of a companys development, integrated marketing is the goal. The global corporation seeks to reduce costs, minimize redundancies in personnel and work, maximize speed of implementation, and to speak with one voice. If the goal of a global company is to send the same message worldwide, then delivering that message in a relevant, engaging, and cost-effective way is the challenge. Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that success is how economies of scale are maximized. Market research measures such as Flow of Attention, Flow of Emotion and branding moments provide insights into what is working in an ad in any country because the measures are based on visual, not verbal, elements of the ad. [edit]Advantages and Disadvantages [edit]Advantages The advantages of global market we can introduce our product by using advertising: Economies of scale in production and distribution Lower marketing costs Power and scope Consistency in brand image Ability to leverage good ideas quickly and efficiently

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 Uniformity of marketing practices Helps to establish relationships outside of the "political arena" Helps to encourage ancillary industries to be set up to cater for the needs of the global player Benefits of eMarketing over traditional marketing [edit]Reach The nature of the internet means businesses now have a truly global reach. While traditional media costs limit this kind of reach to huge multinationals, eMarketing opens up new avenues for smaller businesses, on a much smaller budget, to access potential consumers from all over the world. [edit]Scope Internet marketing allows the marketer to reach consumers in a wide range of ways and enables them to offer a wide range of products and services. eMarketing includes, among other things, information management, public relations, customer service and sales. With the range of new technologies becoming available all the time, this scope can only grow. [edit]Interactivity Whereas traditional marketing is largely about getting a brands message out there, eMarketing facilitates conversations between companies and consumers. With a two way communication channel, companies can feed off of the responses of their consumers, making them more dynamic and adaptive. [edit]Immediacy Internet marketing is able to, in ways never before imagined, provide an immediate impact. Imagine youre reading your favorite magazine. You see a double-page advert for some new product or service, maybe BMWs latest luxury sedan or Apples latest iPod offering. With this kind of traditional media, its not that easy for you, the consumer, to take the step from hearing about a product to actual acquisition. With eMarketing, its easy to make that step as simple as possible, meaning that within a few short clicks you could have booked a test drive or ordered the iPod. And all of this can happen regardless of normal office hours. Effectively, Internet marketing makes business hours 24 hours per day, 7 days per week for every week of the year. By closing the gap between providing information and eliciting a consumer reaction, the consumers buying cycle is speeded up and advertising spend can go much further in creating immediate leads. [edit]Demographics and targeting Generally speaking, the demographics of the Internet are a marketers dream. Internet users, considered as a group, have greater buying power and could perhaps be considered as a population group skewed towards the middle-classes. Buying power is not all though. The nature of the Internet is such that its users will tend to organize themselves into far more focused groupings. Savvy marketers who know where to look can quite easily find access to the niche markets they wish to target. Marketing messages are most effective when they are presented directly to the audience most likely to be interested. The Internet creates the perfect environment for niche marketing to targeted groups. [edit]Adaptivity and closed loop marketing Closed Loop Marketing requires the constant measurement and analysis of the results of marketing initiatives. By continuously tracking the response and effectiveness of a campaign, the marketer can be far more dynamic in adapting to consumers wants and needs. With eMarketing, responses can be analyzed in real-time and campaigns can be tweaked continuously. Combined with the immediacy of the Internet as a medium, this means that theres minimal advertising spend wasted on less than effective campaigns. Maximum marketing efficiency from eMarketing creates new opportunities to seize strategic competitive advantages. The combination of all these factors results in an improved ROI and ultimately, more customers, happier customers and an improved bottom line. [edit]Disadvantages Differences in consumer needs, wants, and usage patterns for products Differences in consumer response to marketing mix elements Differences in brand and product development and the competitive environment Differences in the legal environment, some of which may conflict with those of the home market

Differences in the institutions available, some of which may call for the creation of entirely new ones (e.g. infrastructure) Differences in administrative procedures Differences in product placement. Differences in the administrative procedures and product placement can occur