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Lecture 3

lecture 3 and 4 notes-GMS200-HELENE MOORE-WINTER 2013

3 Pages

Global Management Studies
Course Code
GMS 200
Helene Moore

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Lecture 3 - Airplane best example for parts being made worldwide - Exporting; selling locally made products in foreign markets - Importing; buying foreign made products and selling them domestically - $ value exports - $ value imports= balance of trade - Companies aim to - US bought a lot because they can’t be self sufficient since they can’t supply their citizens with all the goods they need/want just based off American products. They can’t self sustain - Hello kitty; phenomenom licensing in the world - FDI; foreign direct investment is building, buying all or buying part ownership of a business in another country (direct investing strategy) - Insourcing; job creation through FDI - Joint ventures; operates in foreign country through co-ownership by foreign and local partners…risk sharing-need complex contracts- less control0sometimes takeover - Global strategic alliances- partnership in which foreign and domestic firms share resources and knowledge for mutual gains---potential win win for local partner and outside partner. - Foreign subsidiaries- local operation completely owned by a foreign firm. Greenfield investement- builds an entirely new operation in foreign country - In the past; countries tried to protect local economy so it doesn’t affect local businesses. You want your own people to do well instead of foreigners. - Canadians should eat their own chicken (TRQ impact) tariff rate quotas (source; chicken international trade) Criteria for choosing joint venture partner; - Familiarity with your firms major business - Strong local workforce - Future expansion possibilities - Values customers - Strong local market for partners own products - Good profit potential - Sound financial standing Risks on going global - Political instability (war, economy) - Local legal systems (too complex and unfamiliar) - WTO resolves trade/tariff disputes - Protectionism(ways to protect country’s economy); quotas; limit on how much you can import and tarrifs Workshop; - Top global franchises. What are the top 5? What would be your prediction for the upcoming year? Will there be some movement? Why? - Subway, mcdonalds, kfc, 711,kfc, burger king - Mcdonalds will be looking to expand to more countries and its cheaper to open up a subway vs mcdonalds which is why subway is dominating more. It has a global presence - Subway offers healthier foods vs. mcdonalds Types of global businesses; - Global corporation (MNC- multinatio
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