GMS 200 Lecture Notes - Lecture 3: Foreign Direct Investment, Market Entry Strategy, Legal Personality

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 200
• Professor: Gillian Turnbull

Document Summary

Global economy: a worldwide network of interdependent countries that share resource supplies, product markets and a competitive business environment. Globalization: process of growing interdependence among the components of the global economy (exam question/fill in the blank) Why would a company want to conduct business in global markets? (edit) 5 reasons: new customers, cheaper labour, profitability, financial advantages, cheaper supplies. Direct exporting: sell your product directly to foreign customers. Indirect exporting: sell your product to foreign customers through an agent or distributor abroad. Can establish and maintain a relationship with foreign customers. Can control the pricing of your product. Get a larger share of the profit, if any. Managers have to learn about foreign markets. No opportunity to develop a relationship with foreign customers. For another company a fee for the right to make or sell a product in a particular country or region. Ex: pay for the right to use a(cid:374)other (cid:272)o(cid:373)pa(cid:374)(cid:455)"s pate(cid:374)t or trade(cid:373)ark.