Unit 2 Globalization

UNIT 2 GLOBALIZATION

NAME:______MOD.______

• Describe the process of globalization and how it affects markets and production

• Identify the two forces causing globalization to increase

• Summarize the evidence for each main argument in the globalization debate OBJECTIVES

• Summarize the globalization debate

• Identify the types of companies that participate in international business

• Describe the global business environment and identify its four main elements

McDonalds has become the symbol of ______and the spread of the ______. How big is McDonalds? Countries ______; Customers ______, Worldwide restaurants______; Employees ______. In every continent except ______.

MULTINATIONALS More focus on ______their ______and ______

to each individual ______market. Do not have ______

product offerings in each country.

FDI______. in other countries.

Globalization has affected every aspect of life in almost every nation.

To McDonalds it is a ______policy to ______to the ______

expectations of local workers.

TRADEMARKSymbols by which ______are ______

marketed in the ______.

Why McDonalds has an local strategy for each country

alongside its clear global strategy: (video)—5 reasons

1.______

2. ______

3. ______
4. ______
5. ______

GLOBALIZATION Trend toward greater ______among national institutions and economies

GLOBALIZATION______and ______of businesses to all over the

OF MARKETSworld to reach the needs of the ______internationally.

simply put: when big markets have emerged into one single market due

to customer's needs and demands.

GLOBALIZATION World has become the global village and producers can get benefit from

OF PRODUCTIONdifferent culture and cheap labor all around the world.

INTERDEPENDENCERelationship between members so that each is ______

on each other

GLOBAL MARKETS1) ______marketing costs because

companies have ______to markets

2) ______market opportunities especially if home market

Is ______or ______.

3) ______income streams important if selling ______

______.

INCOME STREAMMoney flowing ______and ______of a company.

GROUPONBusiness model copied by companies in over 50 countries. New Strategy

(handout) :BUILDING BY PARTNERING which is what?

______

Advantageous to Groupon because?______

BENEFITS OF GLOBAL PRODUCTION

1) Lower-cost labor cuts ______

2) Technical Expertise

TECHNICAL(HANDOUT) To build up your skills and become a technical expertise

EXPERTISEa)______b)______

c)______

How to take action:

a)______

b)______
c)______

3) Production inputs which requires access to ______from abroad

because they may be more ______at ______

CHALLENGES OF1) ______consumer response

GLOBAL MARKETING`2) ______differences over ______

______development

3) Differences in ______& ______influences by regional

background.

ADVICE TO GLOBAL1)Know your ______Understand how

MANAGERSPeople think, work, eat, and interact in foreign workplace

2)Emphasize ______awareness. Successful managers need to understand the similarities/differences across national boundaries, to be aware of opportunities and deal with the potential downfalls.

3) Develop ______products. Know your market

Ex: Japanese women—sophisticated, spent more money on

cosmetics than anyone in the world.

Proctor & Gamble created skin care product @ $120/bottle

4) Market ______.EX: Mary Kay Cosmetics

Not allowed to see door-to-door in Japan. Introduced

Midrange products and sold in Chinese department stores.

5) Improve ______(movement of people, products from

one place to another via: rail, plane, ship; warehousing)

6) Analyzing ______correctly. Key: Have a good understanding

of problem before you try and solve it.

Ill-defined problems result in ill-defined solutions

GLOBAL CHALLENGES1) Physical security – Examine ______and

MANAGING SECURITYcreate ______.

2) Digital security – Guard ______and

______

3) Reputational risks – require ______and ______

behavior from all ______and ______

ETHICSBeing ethical involves doing the ______,

Regardless of what ______might be gained.

Leads to ______in global markets and increased

______and ______

Based on parties trusting one another.

HOW IMPORTANT IS ETHICS IN THE WORKPLACE?

IT TAKES 20 YEARS

TO BUILD A REPUTATION

AND

FIVE MINUTES TO RUIN IT

MAIN DRIVERS______- General Agreement on Tariffs & Trade

OF-- promotes ______by ______

GLOBALIZATIONand ______such as:

______

______- World Trade Organization

-- regulates ______

-- settles ______among nations

______- Regional Trade Agreements. Also referred to as FTA

(free trade agreements)

- ---Agreement between 2 or more countries that affect trade in

______, intellectual property

protection.

--- Reduce ______to U.S. ______,

---______U.S. interests

--- Builds off WTO negotiated agreements

SECOND DRIVERS E-mail/videoconferencing speeds information across borders

OF Internet sharpen forecasting, lower inventories and costs, and improve

GLOBALIZATIONcommunication with distant managers.

Intranet gives employees access to company information from distant locations

while on business travel.

Extranet give customers and suppliers access to a company’s database to place

orders or restock inventories electronically and automatically.

Advancements in transportation technologies (such as global positioning satellite,

or GPS, technology) are making global shipping more efficient and dependable.

MEASURING GLOBALIZATION

• economic globalization, characterized as long distance flows of goods, capital and services as well as information and perceptions that accompany market exchanges;

• ♦ social globalization, expressed as the spread of ideas, information, images and people.

• political globalization, characterized by a diffusion of government policies; and

• ♦

JOBS &Opponents: Globalization ______jobs in developed nations

WAGES ______wages in developed nations

______workers in developing nations

Supporters: Globalization increases ______and ______everywhere

Generates labor market ______in developed

Countries

Advances economies of ______nations

ENVIRONMENTOpponents: Globalization ______labor standards

LABOR ______protection of ______

MARKETS ______workers in ______nations

+ Supporters: ______raises labor standards

+ ______economies most environment friendly

OPEN ECONOMYeconomy in which there are economic activities between ______and______-- mostly environment friendly

+ Companies concerned for future markets

INEQUALITYDeveloped countries ______

WITHINDeveloping countries: ______

NATIONSNewly Industrialized countries______

Underdeveloped countries:______

INEQUALITYNations open to world trade and investment grow faster than rich nations

BETWEENEmerging economies (China & India) have grown big & strong to thrive

NATIONSindependently while U.S. & other rich countries continue to struggle.

In what country does the richest 10 percent earn an average of $93,000 — the highest level in the OECD. The poorest 10 percent earn an average of $5,800 — about 20 percent lower than the OECD average. ______

GLOBALOpponents: there is a widening income inequality between all people of the world.

INEQUALITYSupporters: Studies show inequality has fallen—to create equality, net transfer of resources from richest 5% of population to 40% of the world that lives on $2 a day.

IMPACT ONOpponents – Destroys ______diversity

CULTURE______our world which means ______

______local small businesses

Supporters - ______and ______to obtain other goods

______from other nations

______deeper ______and ______norms

HOW THEY

STACK UP: MNC power:

(1)Sales and net profit figures for some multinationals are higher than GNPs of developing countries, (annual sales of Shell are roughly £68billion, which is two and half times the income of Nigeria's 110 million people )

(2) Coca-Cola advertisements are being shown 560 million times a day, everyday in 160 countries, while majority of world population does not know where Fiji is.

BUT

1) MNCs are a major source of foreign investment, which is believed to bring higher growth rates for the developing countries; thus the dependency on MNC’s economically and the reason why MNC’s through FDI have gained a small share

in the political power as well.

2) Developing countries need to seduce the multinationals, governments are automatically made to follow those policies that will favor these firms and will

create suitable financial as well as legal environments for them. Also due to high

corruption records in the developing states, multinationals are able and sometimes

do obtain various favorable changes

3) Financial markets could not exist without governments, and are subject to whatever rules and restrictions that states may impose upon them" .

4) Thus, the interdependency that exists between the states and MNCs

1