GMS 522 Study Guide - Final Guide: Transfer Pricing, Emerging Markets, Social Inequality
6 May 2018
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GMS 522- Final Exam Review
Strategies for Local Firms:
1. Dodge- Sells out to a global player or seeks alliance (High Pressure)
2. Defend- Leverage local assets in segments where globals are weak (Low Pressure)
3. Contender- Upgrades capabilities to match global in niches (High Pressure)
4. Extender- Expands into markets similar to home base (Low Pressure)
Emerging market Multinational: Became successful worldwide because
1. Experience in operating in institutionally immature business environment
2. Access to state resources
3. Unique insights into the needs of customers
Basic Communication Model
Sender – encode—Message –decode—Receiver
Individual Cultures communication: Designed to persuade, influence, change attitudes or
condition the behaviour of the target audience (hard sell)
Collectivist Cultures communication: Designed to build trust and develop long term relationships
between buyers and sellers.
Masculinity- Aggressive advertising, focus on success, wining----- Male society
Feminity- Focus on safety Female society
High power Distance Culture: Social inequality is not a big deal, Status Power
Multinational Pricing Strategies
1. Polycentric Pricing- The firm sets prices in each country market independent of HQ
involvement
2. Geocentric Pricing- HQ establishes a minimum floor price bellow which the product
cannot be sold
3. Ethnocentric Pricing- Single worldwide price is set by HQ
Transfer Pricing: The pricing of sales to members of the extended corporate family.
Price Escalation: Price charged to the foreign consumer may be substantially higher than the
price in the domestic market. Solution- Manufacture products overseas.
Non-price Option- Countertrade: Payment is made in kind rather than cash.
Ex-Works- Sellers only responsibility is to make the product available to the buyer at the sellers
premises.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Emerging market multinational: became successful worldwide because: experience in operating in institutionally immature business environment, access to state resources, unique insights into the needs of customers. Individual cultures communication: designed to persuade, influence, change attitudes or condition the behaviour of the target audience (hard sell) Collectivist cultures communication: designed to build trust and develop long term relationships between buyers and sellers. Masculinity- aggressive advertising, focus on success, wining----- male society. High power distance culture: social inequality is not a big deal, status power. Transfer pricing: the pricing of sales to members of the extended corporate family. Price escalation: price charged to the foreign consumer may be substantially higher than the price in the domestic market. Non-price option- countertrade: payment is made in kind rather than cash. Ex-works- sellers only responsibility is to make the product available to the buyer at the sellers premises. Free alongside ship fas: specific to sea and inland working transportation.
