Essay Instructions: Critic writing on two webliography citing:
1. Diversity, Culture, and Implications for Business
Kim Cima < 209.116.252.254/9_1999_focus/cimakime.html > [3 Jun 08]
Abstract – This webliography discusses the many implications which arise when doing business internationally. Two points to remember: 1) Understand and develop cultural literacy- this means to respect and appreciate a culture's religion, language, and economic and political philosophy 2) Identifying the competitive advantage- does expanding abroad utilize your competitive advantage?... do the costs of doing business abroad enhance your competitive advantage?... how does the country's culture connect with your competitive advantage? The article continues to discuss the importance of being informed on culture and the relationships between the culture (ie value systems, norms, etc) and the competitive advantage (ie does the culture influence the cost of doing business?)
2. Withdrawal from NAFTA and WTO
Dennis Kucinich < nafta.kucinich.us/index.php?option=com_content&task=view&id=1&Itemid=2 > [12 Jun 08]
Abstract – This webliography shows an interesting perspective from former Presidential candidate and Democratic Rep from Ohio, Dennis Kucinich. He explains why he feels the US should pull out of NAFTA and how American jobs are lost when we outsource labor to lower-wage paying countries. This relates to the Ch. 3 discussions of preferential trade agreements.
Textbook reference for 1.
Keegan, Warren J., and Green, Mark C. Global Marketing (Paperback). Upper Saddle River, New Jersey: Prentice Hall; 5th edition, 2005.
Chapter 1
Introduction to
Global Marketing
Introduction
The matrix shows that market development is defined as taking existing products into new markets. Wal-Mart’s expansion into Guatemala and other Central American countries is an example of this strategy.
Diversification is developing new products for new markets. South Korea’s LG Electronics has created new products for the American home appliance market. Innovations such as a $3,000 refrigerator with a built-in flat panel LVD TV have been instrumental in Home Depot’s decision to carry the appliance product line.
Global marketing
Companies that use price as a competitive weapon may use global sourcing to access cheap raw materials or low-wage labor. Companies can seek to improve process efficiencies or gain economies of scale with high production volumes.
Marketers may be able to reduce non-monetary costs by decreasing the time and effort customers expend to learn about or seek out the product.
A market is defined as people and organizations that are both able and willing to buy. A successful product or brand must be of acceptable quality and consistent with buyer behavior, expectations, and preferences. If a company is able to offer a combination of superior product, distribution, promotion benefits and lower price than competitors, it should enjoy a competitive advantage. Japanese automakers made significant gains in the American market in the 1980s by creating a superior value proposition. They offered cars with higher quality and lower prices than those made by American car companies.
Competitive Advantage, Globalization, and Global Industries
When a company succeeds in creating more value for customers than its competitors, that company is said to enjoy competitive advantage. Competitive advantage is measured relative to rivals in an industry. A local laundromat is in a local industry and competes locally. A national company competes within its country’s borders. Global industries compete globally—consumer electronics, apparel, automobiles, steel, pharmaceuticals, furniture, and so forth.
Global Marketing: What It Is and What It Isn’t
Because countries and people are different, marketing practices that work in one country will not necessarily work in another. Customer preferences, competitors, channels of distribution, and communication may differ. Global marketers must realize the extent to which plans and programs may be extended or need adaptation. The way a company addresses this task is a reflection of its global marketing strategy (GMS).
Standardization versus adaptation is the extent to which each marketing mix element can be executed in the same or different ways in various country markets.
Concentration of marketing activities is the extent to which marketing mix activities are performed in one or a few country locations.
Coordination of marketing activities refers to the extent to which marketing mix activities are planned and executed interdependently around the globe.
Integration of competitive moves is the extent to which a firm’s competitive marketing tactics are interdependent in different parts of the world.
Management Orientations
Ethnocentric orientation leads to a standardized or extension approach. Foreign operations are typically viewed as being secondary or subordinate to the country in which the company is headquartered. Sometimes valuable managerial knowledge and experience in local markets may go unnoticed. Manufacturing firms may view foreign markets as dumping grounds with little or no marketing research conducted, manufacturing modifications made or attention paid to customer needs and wants.
Example: In Nissan’s early days of exporting to the United States, the company shipped cars for the mild Japanese winters. Executives assumed that when the weather turned cold, Americans would put a blanket over their cars just like Japanese would. Nissan’s spokesperson said, “We tried for a long time to design cars in Japan and shove them down the American consumer’s throat. That didn’t work very well.”
Michael Mondavi, former CEO of the wine company said, “Robert Mondavi was a local winery that thought locally, grew locally, produced locally, and sold globally. . . . To be a truly global company, I believe it’s imperative to grow and produce great wines in the world in the best wine-growing regions, regardless of the country or the borders.”
For example, Citicorp used this approach until the mid-1990s when John Reed instilled a geocentric approach. He sought to instill a higher degree of integration among operating units.
James Bailey, Citicorp executive, said, “We were like a medieval state. There was the king and his court and they were in charge, right? No. It was the land barons who were in charge. The king and his court might declare this or that, but the land barons went and did their thing.” Jack Welch at GE also sought to instill a geocentric approach. At GM, executives were given considerable autonomy in designing autos for their regions. One result was the use of 270 different radios being installed around the world. EX: GM now assigns engineering jobs worldwide. A Detroit global council determines $7 billion annual budget allocation for new product development. One goal is to save 40 percent on the cost of radios by using only 50 instead of 270 different ones. Basil Drossos, president of GM Argentina, said, “We are talking about becoming a global corporation as opposed to a multinational company; that implies that the centers of expertise may reside anywhere that best reside.” Other examples: Harley-Davidson (U.S.), Waterford (Ireland), Gap (U.S.)
DRIVING FORCES
Regional agreements: NAFTA, EU expansion and single currency. WTO (1994)
Market needs and wants and IT: There are cultural universals as well as differences. Common elements in human nature provide the opportunity to create and serve global markets. For example, soft drinks companies must recognize that product adaptation is not always necessary and that competitors may be serving global customers. The information revolution that Thomas Friedman calls the democratization of information is one reason for the trend to convergence. CNN and MTV allow people in remote areas to compare their lifestyles to others. Advertising overlapping national boundaries such as in Asia or Europe and the mobility of consumers in these markets has allowed for pan-regional positioning. The Internet is perhaps the strongest force that allows people everywhere to buy and sell.
Transportation and communication: Jets allow around the world travel in less than 48 hours. 1970: 75 million international passengers. 2003: 540 million. Airlines sell one another’s seats thanks to modern technology. International phone calls are inexpensive and there are many other ways to communicate including fax, email, video conferencing, wi-fi, and broadband Internet. Transportation costs have fallen. Due to specially designed ships, the cost of shipping autos from Japan to the United States is less than the cost to ship from Detroit to either U.S. coast. Intermodal transportation uses 20- to 40-foot containers that may be transferred from trucks to railroad cars to ships.
Product Development Costs: New pharmaceutical cost in 1976 = $ 76 million; today = $400 million and up to 14 years to get a drug approved. Pharmaceutical companies go global to spread the costs. However, only 7 countries account for 75 percent of sales.
Quality: Global and domestic companies may each spend 5 percent of sales on R&D but the global company has much more revenue from its markets. Global companies “raise the bar” for all industry competitors. Nissan, Matsushita, and Caterpillar have achieved world-class quality. World economic trends: Economic growth in key developing countries equals major market opportunities. Slowing growth in developed countries has compelled managers to look abroad. Rapid economic growth, in a country such as China, has caused policymakers to open markets to outsiders. Competition can strengthen domestic companies. Domestic companies seek more governmental protection if markets are not growing. Worldwide movement to free markets, deregulation, and privatization is another driving force. As independent private managers take over running businesses (steel, railroads, telephones, airlines, utilities, restaurants, nightclubs) from governments, they are likely to seek the best deals, regardless of the nationality of the supplier.
Leverage: A company enjoys some type of advantage by virtue of the fact that it has experience in more than one country. Experience transfers mean that a company can leverage its experience in any part of the world. It can use management practices, strategies, products, advertising appeals, or sales or promotional ideas that have been test-marketed in one country or region and apply them in comparable markets. Because Chevron has drilled for oil under all conditions and recorded them, managers with a problem know how it has been handled in the past. Scale economies can be gained in manufacturing and by centralizing functional activities. Resource utilization means that a global companies can scan the entire world to identify people, money and raw material that will enable it to compete most effectively in world markets. Rising and falling “home country” currency is not an issue as the world is full of currencies and a global company seeks financial resources on the best available terms. It uses them where there is the best opportunity to serve a need at a profit. Global strategy is a design to create a winning offering on a global scale. A global strategy is built on an information system that scans the world business environment to identify opportunities, trends, threats, and resources. When opportunities are identified, the global company leverages its skills and focuses it resources to create superior value for customers and achieve competitive advantage.
Management myopia and organizational culture: Ethnocentric companies will not expand geographically. Managers tend to dictate when they should create strong local teams that they can rely upon for market information. Know-it-all local teams won’t listen to management and all-knowing managers won’t listen to local experts. Successful global companies have learned to integrate global vision and perspective with local market initiative and input.
National controls: Every country tries to protect its home industries and services through tariff and non-tariff controls. Thanks to organizations like GATT, WTO, NAFTA, EU, and other economic agreements, tariffs have been largely removed in high-income countries. Non-tariff barriers to trade include “Buy Local” campaigns, food safety rules, and other bureaucratic obstacles.
Opposition to Globalization: Globophobia is the term used to describe an attitude of hostility toward trade agreements, global brands, or company policies that appear to result in hardship for some individuals or countries while benefiting others. Opponents to globalization include college or university students, NGOs, and labor unions. Some Americans believe that globalization has sent American jobs—both blue- and white-collar—overseas and also depressed wages at home. In developing countries, many believe that free trade agreements benefit the world’s most advanced countries. An unemployed miner in Bolivia said, “Globalization is just another name for submission and domination. We’ve had to live with that here for 500 years and now we want to be our own masters.”
Textbook Reference for 2.
Keegan, Warren J., and Green, Mark C. Global Marketing (Paperback). Upper Saddle River, New Jersey: Prentice Hall; 5th edition, 2005.
Chapter 3
The Global Trade Environment: Regional Market Characteristics and Preferential Trade Agreements
The website for the WTO is http://www.wto.org.
The Dispute Settlement Body of neutral staff members mediates unfair trade barriers and other issues. For 60 days, parties are expected to negotiate in good faith. After that, the DSB will appoint a three-member panel of trade experts to hear the case behind closed doors. The panel must rule in nine months. The losing party has the right to turn to a seven-member appellate body. If, after due process, a country’s policies are found to violate WTO rules, it is expected to change those policies. If it does not, trade sanctions may be imposed.
Trade ministers meet annually to work on improving world trade. The Doha Round began in 2001, collapsed in 2005, and has not been restarted as of September 2007. It is customary to notify the WTO when countries enter into PTAs. Strictly speaking, few fully conform to WTO requirements; none, however, have been disallowed.
Free Trade Area
Sometimes duties may be eliminated on the day of the agreement or phased out over time.
Chile and Canada established an FTA in 1997. A Caterpillar tractor made in Canada could be shipped to Chile duty free. A U.S.-made tractor could not be shipped through Canada to Chile because the Made in the USA label would subject it to about $13,000 in duties. Little wonder that the United States negotiated its own agreement with Chile that came into effect in 2003.
Other FTAs:
European Economic Union: the EU plus Norway, Liechtenstein, and Iceland
The Group of Three (G3): Colombia, Mexico, and Venezuela
The Closer Economic Partnership Agreement: China and Hong Kong.
North America—NAFTA
The United States is home to more global industry leaders than any other nation and dominates in the computer, software, aerospace, entertainment, medical equipment, and jet engine industries.
The agreement does leave the door open for discretionary protectionism. California avocado growers won government protection for a $250 million market. Mexican avocado growers can ship only during the winter and only to the northeast United States and are subject to a $30 million quota. Mexico imposed tariffs on chicken leg quarters and on red and golden apples.
The United States and Canada formed the Canada–U.S. Free Trade Area in 1989. The $400 billion of goods traded each year is the biggest trading relationship between any two countries.
In 1994, the United States, Canada, and Mexico began trading under NAFTA. The NAFTA represents a combined population of roughly 430 million and a total GNI of almost $14 trillion.
NAFTA Income and Population
2004 GNI 2004 Pop. 2004 GNI
(in millions) (in thousands) Per Capita
United States $12,168,482 293,655 41,440
Canada 905,042 31,974 28,310
Mexico 704,906 103,795 6,790__
Total/Mean GNP $13,778,430 429,424 $32,086
per capita
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1. Go to this link Diversity, Culture, and Implications for Business
Kim Cima < 209.116.252.254/9_1999_focus/cimakime.html > [3 Jun 08] and
2. Withdrawal from NAFTA and WTO
Dennis Kucinich < nafta.kucinich.us/index.php?option=com_content&task=view&id=1&Itemid=2 > [12 Jun 08] and answer the following:
[Be sure to include webliography citing/references within your writing AND provide (2) more external sources that support your answers. Please be sure to type your answers in a MicroSoft word document .doc format]
Question 1: Describe and explain why you selected this webliography source. READ THE ARTICLE AND THINK ABOUT HOW THOSE ARTICLES ARE RELATIVE TO PROFESSIONAL AND ACADEMIC INTERESTS.
Question 2: Compare this webliograpy source with the above textbook reference.
Question 3: Give overall evaluation if you agree or disagree with your (4) sources' viewpoints. Dig deep here and convince me with critical writing that supports your viewpoint. Critical Writing Steps: State Your Position (Agree/Disagree); Explain in more depth your positioning including citing of sources to strengthen your position; Use examples to clarify to the reader how this might be applied or an experience that demonstrates your position; extend beyond the initial positioning by introducing new ideas that challenge the reader to think beyond the initial positioning. A good way to extend is to offer "Other Areas For Consideration" and then introduce a new concept that challenges the reader to consider it as another option for evaluation.
Use APA standards, double-spaced, Times New Roman 12, use subtitles for each question and a title page with numbering. Cite your sources in the body of your paper and provide a reference page that links to your citing sources.
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APA Example:
American Psychological Association (APA)
Standards for Written Papers
May 5, 2007
References are a collection of sources of materials that you have researched for your paper. You will place the list of source materials in a separate page toward the end of your written paper. While the references are a list of all sources, a citation is the use of ONE or more of the author(s)’work within the content of the written paper.
CITATIONS: Three Examples:
Smith (2003) stressed that only “students with dedicated personalities make good grades in school” (p.223). ?quotation marks “ “ were needed because these are the exact words that John said, not paraphrased by the reader. Also, the page number must be included where the sourced material was taken from to give full credit to John.
Students that are consistent in their study habits are more likely to make better grades than students that study inconsistently (Rare, 2002; Solid & Gold, 1999). ?In this example, NO quotation marks (“ “) are needed because the writer is not quoting the author’s exact words, and instead, is paraphrasing them.
Accordingly to Allen Mark, an expert in intelligent behavior believes “most people have the capabilities to be high achievers, although only a few chose to reach their true potential” (Wise, 2000, p.32). ?In this example, Allen’s exact words were used and the source name (Wise) along with the publication date and page number is needed).
REFERENCES: Using the citations above, below is the reference list that supports the citation sources. Reference list are placed on a separate page, after the written document text and before any appendix information. Notice that the entire list is by author’s last name, first name, and then initials. Also, be sure to put the ENTIRE list in alphabetical order as in this case (R,S,S,W).
References Examples
Rare, C.A. (2002, January). Knowing is not always enough. Journal of Marketing Research, 1(1), pp.372-452). ?Sourced from an academic peer reviewed journal paper.
Smith, J.R. (2003). Learning to motivate students in academic studies. Boston, MA:
MacMillan Publishing. ?Sourced from a published book.
Solid, T.R., and Gold, V.S. (1999, January 23). This is the year for great studies. The
Washington Post, pp. A1,A4.
Wise, T.I. (2003, February 10). Getting the best of students in the real world and seeing
the great results. [Online] http: www.reasonswesucceed.com ?no period after website
name and need to include month/date as current date stamped or date of article if given.
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There are faxes for this order.
