SHR 247 (9 BB) - Competing across boarders Chapter 8...

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Competing across boarders Chapter 8
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Content of the Class The world today and implications for business What’s happening Politically and Economically in the World? Globalization Markets Production Drivers of Globalization Declining trade and investment barriers Declining technological barriers Microprocessors Internet and WWW Transportation technologies The Globalization Debate Anti Pro Motives for International Strategy International Strategies Modes of International Market Entry
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What’s happening Politically and Economically in the
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Fundamental shift in the world economy National economies no longer self contained Are distance, time zone, language, culture, business systems etc. as important? Barriers to cross border trade and investments are tumbling ‘Shrinking’ due to advances in transportation and telecommunications technology Material culture starting to look similar the world over National economies are merging into an interdependent global economic system Process by which this is happening is known as Globalization
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World Today $1.2 billion foreign exchange transaction everyday Symbols are increasingly Global Products made from inputs from all over the world Economic crisis in 1 place can be detrimental to other regions Where anti Globalization protests happen
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Implications for business Allows you to sell product worldwide with economies of scale Production in locations where inputs are cheap Expansion internationally has become relatively easy Global industries Automobiles Petroleum Semiconductor chips Computers Born Global
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What is Globalization? Definition Globalization refers to the shift towards a more integrated and interdependent world economy Can be segmented into: Globalization of markets Globalization of production
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Globalization of Markets
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In this interdependent global economy, an American might drive to work in a car designed in Germany that was assembled in Mexico by DaimlerChrysler from components made in the United States and Japan that were fabricated from Korean steel and Malaysian rubber. She may have filled the car with gasoline at a service station owned by a British multinational company that changed its name from British Petroleum to BP to hide its national origins. The gasoline could have been made from oil pumped out of a well off the coast of Africa by a French oil company that transported it to the United States in a ship owned by a Greek shipping line. While driving to work, the American might talk to her stockbroker on a Nokia cell phone that was designed in Finland and assembled in Texas using chip sets produced in Taiwan that were designed by Indian engineers working at a firm in San Diego, California, called Qualcomm. She could tell the stockbroker to purchase shares in Deutsche Telekom, a German telecommunications firm transformed from a
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SHR 247 (9 BB) - Competing across boarders Chapter 8...

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