NEWS
Facebook IPO launched. Zuckerberg is the 29th richest person in the world with 19.1 Billion Dollars.
The strikes at Nicosia municipality will continue.
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MAN 470 – Berk T
MAN 470 – Berk T UNCALI UNCALI
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National borders are no longer defensible against the invasion of knowledge, ideas, and financial data.
-Walter Wriston
The new electronic interdependence recreates the world in the image of a global village.
-Marshall McLuhan
Why Go Global?
Offset sales declines in the domestic market.
Increase sales and profits.
Extend your products’ life cycle.
Lower manufacturing costs.
Lower the cost of their products.
Improve competitive position and enhance reputation.
Raise quality levels.
Become more customer-oriented.
Why Go Global? (cont’d)
Before venturing into the global marketplace, entrepreneurs should ask themselves six
questions:
1. Is there a profitable market in which our firm has the potential to be successful over the long run?
2. Do we have and are willing to commit adequate resources of time, people, and capital to global campaign?
3. Are we considering going global for the right reasons?
4. Do we understand the cultural differences, history, economics, value systems, opportunities, and risks of conducting business in the country (or countries) we are considering?
5. Is there a viable exit strategy for our company if conditions change or the new venture is not
successful?
6. Can we afford not to go global?
Strategies for Going Global
Creating a presence on the web (fcbk, ebay, amazon)
Trade intermediaries
Export management companies
Export trading companies
Manufacturer’s export agents
Export merchants
Foreign distributors
The value of using trade intermediaries
Joint ventures (temporary partnership) eg. MillerCoors,
SonyEricsson,
Strategies for Going Global (cont’d)
International franchising eg. Mcdonalds with teriyaki burgers or vegetarian mcnuggets, Domino’s Pizza with different topics
1. Identify the county or countries that are best suited to the franchiser’s business concept.
2. Generate leads for potential franchisees.
3. Select quality candidates.
4. Structure the franchise deal.
Countertrading and bartering
Countertrading: company selling goods in a foreign country agrees to promote investment and trade in that country.
Bartering: exchange of goods and services for other goods and services.
Foreign licensing
Strategies for Going Global (cont’d)
Exporting
Step 1: recognize that even the tiniest companies and least experienced
entrepreneurs have the potential to export.
Step 2: analyze your product or service.
Step 3: analyze your commitment.
Step 4: research markets and pick your target.
Step 5: develop a distribution strategy.
Step 6: find your customer.
Step 7: find financing.
Step 8: ship your goods.
Step 9: collect your money.
Strategies for Going Global (cont’d)
Establishing international locations
Importing and outsourcing (call centers in İndia)
Entrepreneurs who are considering importing goods and service or outsourcing their manufacturing to foreign countries should follow these steps:
1. Make sure that importing or outsourcing is right for your business.
2. Establish your target cost for your product.
3. Do your research before you leave home.
4. Be sensitive to cultural differences.
5. Do your groundwork.
6. Protect your company’s intellectual property.
7. Select a manufacturer.
8. Provide an exact model of the product you want manufactured.
9. Stay in constant contact with the manufacturer and
try to build a long-term relationship.
Barriers to International Trade
Domestic barriers eg. information and financing
International barriers
Tariff barriers (tax on exports to keep under control)
Nontariff barriers eg. rules of origin, packaging conditions, labelling
Quotas (limitation on export/import)
Embargoes (prohibition of commerce from a particular country)
Dumping (Predatory pricing) Exporting at a price lower than the sale price at home market
Political barriers eg. Petrol dispute between Iran and EU
Business barriers eg. Labour quality, worker unions and strikes
Cultural barriers eg. Bicycle preferrance in China
Producers of 1/3 of the worlds bicycle. or Many vegetarians in
India (steakhouse)
National Trade Agreements
The world trade organization (WTO)
formed to reduce tariffs among member nations.
The
members account for over 97% of all world trade.
NAFTA
Among NAFTA’s provisions are:
Tariff reductions
Elimination of nontariff barriers
Simplified border processing
Tougher health and safety standards
Conclusion
Although there are no sure-fire rules for going global, small businesses that want to become successful international competitors should observe these guidelines:
Make yourself at home in all three of the
world’s key markets: North America, Europe, and Asia.
Appeal to the similarities within the various regions in which you operate but recognize the differences in their specific cultures.
Develop new products for the world market.
Familiarize yourself with foreign customs and
languages; constantly scan, clip, and build a
file on other cultures: their lifestyles, values,
customs, and business practices.
Conclusion (cont’d)
Learn to understand your customers from the perspective of their culture, not your own.
“Glocalize.” Make global decisions about products,
markets, and management but allow local employees to make tactical decisions about packaging, advertising, and service.
Recruit and retain multicultural workers who can give your company meaningful insight into the intricacies of global markets.
Train employees to think globally, send them on
international trips, and equip them with state-of-the-art communications technology.
Hire local managers to staff foreign offices and branches.
Do whatever seems best wherever it seems best, even if people at home lose jobs of responsibilities.
Consider using partners and joint ventures to break into
foreign markets you cannot penetrate on your own.
THANK YOU
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