Marketing manager course chapter 2

McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.


Chapter

2
Managing in a
Global Environment

McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.


Learning Objectives

After reading this chapter, you should be able to:
z Understand

the landscape of the global market.
z Develop an awareness for the role of culture in international
management.
z Recognize the major options firms face when they choose a
global strategy and the conditions that make a strategic
choice most appropriate.
z Determine the best mode of entry into foreign markets given
each firm’s unique characteristics.
z Develop effective human resource practices for managing
international subsidiaries.

z Become aware of ethical issues in international operations.
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.


The Changing Pattern of International Business
zChanging

world output and world trade

picture
¾The

U.S. no longer dominates the world economy
¾Large U.S. multinationals no longer dominate
international business
¾The centrally planned communist economies that
made up roughly half the world suddenly become
accessible to Western businesses
¾The global economy has become more knowledgeintensive
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.


The Changing Pattern of International Business
(continued)

z Lowered

¾ General

trade barriers
Agreement on Tariffs and Trade

(GATT)
¾ World Trade Organization (WTO)
z Integrated
¾ The

Economic Markets

European Union (EU)

¾ The

North American Free Trade Act
(NAFTA)

¾ The

Association of Southeast Asian Nations
(ASEAN)

ắ
McGraw-Hill

The Asia Pacific Economic Cooperation
(APEC)
â 2004 The McGraw-Hill Companies, Inc. All rights reserved.

The Changing Pattern of International Business
(continued)

z Global
¾ Tastes

consumer preferences
and preferences are converging

¾ Presence

of mass media, exposure to
goods from various countries, and
standardized products

z Globalized
ắ Cost

McGraw-Hill

production

efficiency

â 2004 The McGraw-Hill Companies, Inc. All rights reserved.


Example of Globalized Production

Of the $20,000 sticker price of a General Motors
Automobile LeMans:
z $6,000 goes to South Korea, where the car was assembled
z $3,000 goes to Japan for sophisticated high-tech parts
(engines, transaxles, electronics)
z $800 goes to Taiwan, Singapore, and Japan for small
parts
z $500 goes to Great Britain for advertising and marketing
services
z $1,000 goes to Ireland for data processing
z $7,600 goes to GM and its external professional firms in
the United States
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.


The Changing Pattern of International Business
(continued)

z Technological

innovations

¾ Advances

in communications, information
processing, and transportation technology

¾ Fiber

optics, wireless technology, the Internet
and World Wide Web, and satellite technology

z Management

across cultures

¾ Adaptation

to business strategies, structures,
operational policies, and human resource
programs

McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.


Major Factors Affecting International Business
z General
z Legal

business environment

system

¾ Common

law

¾ Civil

law
¾ Muslim law
z Economic
z Cultural
ắ Culture

McGraw-Hill

environment

environment
shock
â 2004 The McGraw-Hill Companies, Inc. All rights reserved.


Dimensions of Culture
Power Distance
Individualism

Uncertainty Avoidance

Masculinity / Femininity
Long-term/ Short-term
Orientation
McGraw-Hill

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.