Sir Powers 10/26/16 International Business Chapter 8&9 key questions foreign exchange market instruments Chapter 8 Key questions: 1. A key point in taking a company international is arbitrage or taking advantage of a price difference. Take for instance Samsung in China. They are dominating the market against their rival Apple 3-1. Apple introduced a cheaper international version of the iPhone in response but is losing its high-end market to Samsung. Samsung mobile devices are the first choice among corporate executives. Also, politically, Chinese officials are familiar with Samsung products with a committee following its moves. However, the Chinese media is increasingly critical of Apple. Secondly, even though the Chinese market knows that Samsung is Korean, they have targeted a niche market in the world’s largest economy. 2. Another key point in taking a company international is carry trade which is a form of exchange arbitrage. An example of carry trade is to …show more content…
There has been a significant increase in depth and liquidity in forward market segments, which rise in the average daily forex market turnover from 16 billion USD in 2005 to 55 billion USB in 2015. In the integration of Indian financial market with international markets, the Reserve Bank of India to market development has been that of cautious and informed by the experience of other developed and developing countries. Even within the constraints imposed by this approach, the Reserve Bank and the India Government have taken steps that include progressive liberalization of capital flows, calibrated increase in investment limits for Foreign Institutional Investors in government and corporate debt, introduction of Qualified Foreign Investor as a separate investor class, expansion of the menu of risk management instruments,
The United States of America and France have made their lives differently from the beginning. Likewise, The United States of America and France have also conducted business differently. Business techniques are usually learned through culture, and what is taught from generations before. Conducting business overseas can be problematic if we do not know how another country conducts business. Learning another culture can potentially help you through your business career as you start to expand into international waters.
Colgate toothpaste in Asia 1. What is the difference between a. and a. Identify the major strategic and ethical issues faced by Colgate in its partnership with Hawley and Hazel. In 1985, Colgate purchased a fifty percent ownership of the company Hawley and Hazel, a leading manufacturer of toothpaste in Singapore, Taiwan, China, Malaysia, and Thailand, in order to gain a foothold in the Asian market. This was an important business decision as Colgate felt Hawley and Hazel had valuable strategic assets, such as brand loyalty, customer relationships, distribution systems, and production systems (Hill, 2014, p. 224). It was easier and less of a capital risk for Colgate to acquire the firm in order to establish a presence in Asia without having to spend the resources to build their own manufacturing plant.
A firm that desires to enter into International business has many different options. These range from importing and exporting to contract manufacturing abroad, licensing and franchising, joint ventures and setting up wholly owned subsidiaries. To establish business internationally firms have to complete many formalities. International business share their technology which will improve the mode and quality of their production.
We all know that comapanies go international for many reasons but always typical goal is comapny growth and expantions. When a company searches for new interesting markets abroad and also hires international employees, using well designed international strategy can for sure expand business on foreign markets. Internalization strategy of companies is now possible because is no problem to manage business by phone or e-mail. There is also no problem to travel by plane from Europe to Asia in few hours what was not possible in past.
Should a multinational company reduce its ethical standards to compete internationally? With technology revolutionizing the way businesses compete and obtain resources, the globe is appearing smaller every day. This allows businesses to outsource activities to other countries and save money on production costs and to expand their global reach by opening facilities anywhere in the world. Expanding internationally can be seen as a benefit for many companies however, if the business does not have a strong code of ethics, could cost the company a lot more than the benefits received. Governments of underdeveloped nations may not carry the same legal restrictions than the company’s home country. This could be seen as a temptation to cut costs by
International strategy is the strategy through which the firm sells its goods or services outside its domestic market.
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
Why would a company go international? There are many reasons why companies would go international, but generally a company goes international so they can seek opportunities in domestic markets, or they seek solutions to problems that cannot be solved through domestic operations. There are many profitable possibilities by going internationally and these include greater profit potential, offers new locations to sell products, it may provide better access to needed raw materials, it may access to financial resources from many nations, and lastly it may allow labour-intensive activities to locate in countries with lower labour costs. For a small business to become an international business they must use five guidelines the first is global sourcing, exporting and importing, licensing and franchising, joint ventures, and wholly owned subsidiaries. The first two are market entry strategies and the remaining are direct investment strategies.
As an owner of a business your main goal is to expand your business, nationally and internationally. Expanding your business internationally opens many doors to have a successful business. There are vast numbers of companies in the United States who manage business with companies all over the world. Nevertheless, companies from foreign countries may not always have the same ethics as businesses from the United States, which can be an immense deal, for example “An executive of a company offers a government official payment in exchange for the official incorrectly classifying imported goods so the shipment will be taxed at a lower rate than the correct classification would require” (Cateora, Gilly and Graham, International Marketing)
Although small businesses do not make a lot of major deals with large investors, most small businesses create profit revenue greater than large corporations. Small business creators are very brave considering only ten percent of small businesses survive. Unfortunately, some communities do not support local small businesses; they only support the large brand name and force small businesses to die out. Since small businesses will not have a name brand known around the world, many people from communities will not support them because they are not known on a national scale. “This, in turn will affect the local economy and drive capital out of their local economy. On average, for every one hundred dollars spent in an economy, if spent on a
Management in all business activities is portrayed as the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. This is done through effective planning, organizing, staffing, leading and directing plus controlling of an organization. (Business Maters, 2013). Whereas globalization of business depicts the change in a business from a company associated with a single country to one that operates in multiple countries while globalization is the changes in the world where one moves away from self-contained countries toward a more integrated country. (Study, 2003). As managers integrate into a wider and more globalized business environment comes the impact as explained herein.
1. Which are the biggest management challenges for international firms? What can firms do in response?
The global economy has seen a dramatic increase in services trade between countries. The regulation and monitoring of service trade between countries has become much harder. As highlighted by Johnson, trading in services was the fastest growing constituent of global trade during the 80’s and 90’s. Cross border transactions include anything from banking to software. When services are offered to another country, the provider has to interact with the customer through either, cross border communications, movement of the provider or the consumer moving to the supplier’s state of residence. Technology has made international trade much easier and more feasible; this has lead countries to boost services being exported to other countries. IT has decreased the cost of communication between countries. As a result it has made it more feasible for businesses to introduce new products and modify services abroad. This spark in global trade of services has its downfalls. The liberalization of services goes against certain countries’ development strategies. Areas like health and education needs the provisional planning of governments. The interference from abroad has hindered the governments’ strategic planning with respect to these services. This takes us to the importance of regulating services coming in from abroad through protectionism. Regulations on services can be a burden on service providers which can consequently weaken the liberalization of tr...
International Marketing, at its simplest level, involves the firm making one or more marketing mix decisions across national boundaries (Jobber, 2010). At its most complex level, it involves the firm establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Jobber, 2010). There are various reasons for going global, some of which are: to find opportunities beyond saturated domestic markets; to seek expansion beyond small, low growth domestic markets; to meet customers’ expectations; to respond to the competitive forces for example the desire to attack an overseas competitor; to act on cost factor for example to gain economies of scale in order to achieve a balanced growth portfolio. The methods of market entry that could be used are indirect exporting (for example, using domestic –based export agents), direct exporting (for example, foreign –based distributors), licensing, joint venture and direct investment. I found this par...
The foreign exchange market is one of important mechanism in the international business because foreign exchange is an intermediary for all nations in term of the growth of the economy. There are many functions of foreign exchange market in the global economy. In the international business, it uses the foreign exchange markets in four ways. First, the pay...