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BBB4M

BBB4M. CHAPTER 5 – INTERNATIONAL AGREEMENTS, ORGANIZATIONS, AND POLICIES. 5.1 Positioning in the Global Economy. Positioning starts with a product, a piece of merchandise, a service, a company, an institution, or even a person.

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BBB4M

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  1. BBB4M CHAPTER 5 – INTERNATIONAL AGREEMENTS, ORGANIZATIONS, AND POLICIES.

  2. 5.1 Positioning in the Global Economy • Positioning starts with a product, a piece of merchandise, a service, a company, an institution, or even a person. • To position itself in world markets, a business must establish what makes its products or services unique and superior to others. (image and reputation) • Visibility among trade partners

  3. Strategies toward Global Positioning • By exporting or importing • Franchising a business operation • Starting up a wholly owned subsidiary • Purchasing parts/materials in foreign markets • Establishing a joint venture • Strategic alliance

  4. International and Global Companies • Global economy is based on the interdependence of competitors, markets, and resources. • A global company is one in which top management makes decisions to maximize worldwide revenues, income, and profits • BENEFITS AND CHALLENGES IN GLOBAL COMPANIES – PAGE 148-149

  5. 5.2 Corporate Globalization • Globalization refers to the growth and spread of interactive international economies and businesses around the world. • A Multinational company (MNC) is a business enterprise that conducts business in several countries. • The global influence of these economies is illustrated by their dominance in the following areas: oil and gasoline, hydroelectric and nuclear plants, minerals, construction of transportation crafts, lumber and agriculture.

  6. Multinational companies • Ethnocentric MNC e.g. Coca-Cola's headquarters in Atlanta, Georgia control most of the company’s foreign affairs. • Polycentric MNC e.g. 3M corporation – 35,00 of its employees are positioned in countries around the world • Geocentric MNC (uncommon) e.g. Colgate-Palmolive

  7. Challenges to Multinational Organizations • Developing global customers beyond the Triad. • Multinational companies sometimes dominate economies and try to influence governments. • Creating new international divisions of labour

  8. Global Organizational Structure • Separate International Divisions • Functional Divisions • Product Divisions • Geographic Divisions • Matrix Organization

  9. 5.3 International Trade Agreements • There is an increase need for trade agreements • Trading Blocs • Reciprocity • Bilateral trade/multilateral trade • NAFTA, FTAA, EU, APEC • Agreement on Internal Trade (AIT) • Free Trade or Duty-Free Zones

  10. 5.4 Organizations Influencing Global Trade • G20 – An international forum of finance ministers and central bank governors. • World Trade Organization(WTO) • World Economic Forum (WEF) • Organization for Economic Cooperation and Dev. • World Bank Group • International Chamber of Commerce (ICC) • International Monetary Fund (IMF) • National Organizations

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