GMS 200 Lecture Notes - Lecture 3: Joint Venture, Global Sourcing, Culture Shock
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How companies go global: global business- conducts commercial transactions across national boundaries. Market-entry strategies that involve the sale of goods or services to foreign markets without expensive investments. Strategic alliances, joint ventures, and wholly owned subsidiaries are direct investment strategies. Global business environment: legal and political systems. Political risk- is the potential loss in value of a foreign investment due to instability and political changes in the host country. Political-risk analysis- tries to forecast political disruptions that can threaten the value of a foreign investment: trade agreement and trade barriers. World trade organization- member nations agree to negotiate and resolve disputes about tariffs and trade restrictions. Most favoured nation status- gives a trading partner most favourable treatment for imports and exports (countries in the wto are on the same playing field) Tariffs- are taxes governments levy on imports from abroad. Protectionism- is a call for tariffs and favourable treatments to protect domestic firms from foreign competition: regional economic alliances.