Of tastes and preferences institutions united

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Unformatted text preview: General Agreement World on Trade and Tariffs) on Trade Barriers Tariff Tariff Quotas Quotas Voluntary export restraints Voluntary export restraints Nontariff Nontariff Barriers Barriers Government import standards Government import standards Government Subsidies Government Subsidies Customs Valuation //Classification Customs Valuation Classification Dealing with Political Risk Political uncertainty risk of major changes in political regimes Policy uncertainty risk associated with changes in laws and government policies directed at businesses Nationalization and expropriation Strategies avoidance control cooperation Trade Agreements General Agreement General Agreement on Tariffs and Trade on Tariffs and Trade Maastricht Treaty of Europe Maastricht Treaty of Europe Regional Trading Regional Trading Zones Zones NAFTA NAFTA CAFTA CAFTA ASEAN and APEC ASEAN and APEC The Multinational Enterprise The An enterprise that controls and manages An production establishments (plants) located in at least two countries. least Headquarters Subsidiaries Types of MNEs Horizontally integrated, ie. Procter and Gamble Vertically integrated, ie. Exxon-Mobil Conglomerates, ie. Philips, G.E. Forces Against Multinational Operations Forces Operational complexity Infrastructure and logistics Factors of production, suppliers Technology transfer Markets complexity Different cultures Different levels of income Different rules and regulations Financial complexity Different currencies Different availability of funds Rules and regulations concerning taxes, accounting, Rules and repatriation of funds. and Why does the MNE exist? Why Unique core competencies Products Technologies Brands Internalization of unique core competencies Protection of knowhow Economies of scale Global competition Localization of markets and operations Search for lucrative markets Search for the best mix of factors of production Search for the best regulatory and infrastructure Search conditions. conditions. Level of Exposure to International Business Level Import / Export Importing -- Buying products from another country. Exporting -- Selling products to another country. The U.S. is the largest importing and the third largest exporting nation in the world. First – China Second – Germany The most important US export is civilian aircraft ($75 billion in 2008). The fastest growing is fuel oil ($35 billion). The most important US import is (obviously) crude oil. US trade deficit: approx $500 billion (2010) Licensing When a firm (licensor) provides the right to manufacture its product or use its trademark to a foreign company (licensee) for a fee (royalty). Licensing can benefit a firm by Gaining revenues it wouldn’t have otherwise generated; Spending little or no money to produce or market their products; Yao, the NBA, and China! ManU, Real, Barca, and everywhere! Last but not least, the Olympics Global Franchising McDonald’s – The Undisputed Leader More than 31,000 restaurants in over 118 countries. Maintains va...
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This note was uploaded on 09/18/2013 for the course AEM 1200 taught by Professor Perez,p.d. during the Spring '06 term at Cornell University (Engineering School).

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