Book Notes Chapter 1

What are 4 events/ trends that will influence international business in the near future?
1. the rapid growth of the World Trade Organization and new free trade agreements around the world
2. the trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and Eastern Europe
3. the burgeoning impact of the Internet, mobile phones, and other global media on the dissolution of national borders
4. the mandate to manage the resources and global environments properly for the generations to come
Why is the international marketer’s task more difficult than that of the domestic marketer?
The international marketers task is more complicated than that of the domestic marketer because the international marketer must deal with at least 2 levels of uncontrollable uncertainty instead of one
What are 5 controllable firm characteristics?
1. product
2. price
3. place (distribution)
4. promotion
5. research
How can the U.S. government affect foreign trade?
The U.S. government has the constitutional right to restrict foreign trade when such trade adversely affects the security or economy of the country or when such trade is in conflict with U.S. foreign policy.
What are the 2 dimensions of the “alien status” of a foreign business?
The “alien status” of a foreign business has 2 dimensions:
1. foreigners control the business
2. the culture of the host country is alien to management
What is ethnocentrism?
Ethnocentrism is the notion that people in one’s own company, culture, or country best know how to do things
What are the 4 steps of a cross cultural analysis?
1. Define the business problem or goal in home-country cultural traits, habits, or norms
2. Define the business problem or goal in foreign country cultural traits, habits, or norms through consultation with natives of the target country
3. Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem
4. Redefine the problem without the SRC influence and solve for the optimum business goal situation
What 2 things do you need to be globally aware?
To be globally aware is to have:
1. tolerance of and a willingness to learn about cultural differences
2. knowledge of cultures, history, world market potential, and global economic, social, and political trends
What are the 5 steps of international marketing involvement?
1. no direct foreign marketing
2. infrequent foreign marketing
3. regular foreign marketing
4. international foreign marketing
5. global marketing
What are 3 factors favoring faster internationalization?
3 factors favoring faster internationalization are:
1. companies with either high technology and/ or marketing based resources
2. smaller home markets and larger production capacities
3. firms with key managers well networked internationally
What happens during the No Direct Foreign Marketing stage?
In the No Direct Foreign Marketing stage, the company does not actively cultivate customers outside national boundaries, however, the company’s products may reach foreign markets.
What are the 3 approaches to strategic decisions for firms involved in international markets?
The 3 approaches to strategic decisions for firms involved in international markets are:
1. regular foreign marketing
2. multidomestic or international marketing
3. global marketing
What happens during the Regular Foreign Marketing stage?
In the Regular Foreign Marketing stage the firm has permanent productive capacity devoted to the production of goods and services to be marketed in foreign markets.
What happens during the International Marketing stage?
Companies in the International Marketing stage are fully committed to and involved in international marketing activities.
What happens during the Global Marketing stage?
In the Global Marketing stage, the most profound change is the orientation of the company toward markets and associated planning activities.