Term
| What are the four dimensions of globalization? |
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Definition
Economic- trade and other economic interactions;
Cultural- systems of symbols and meanings;
social- social relationships and organizations;
political- dispersion and concentration of authority and power, popular representation, etc |
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Term
| List the key take aways from the tinker-toy exercise in class |
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Definition
Liability of foreignness: limited familiarity with inputs
Ability to imitate: no intellectual property protection and later/first mover advantages
ME: time constraints and competitive pressures |
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Term
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Definition
| The shift toward a more integrated and interdependent world economy |
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Term
| What is the CAGE Framework used in measuring differences in operating in different countries? |
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Definition
C- CULTURAL
A- ADMINISTRATIVE (GOVERNMENT)
G- GEOGRAPHIC
E- ECONOMIC |
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Term
| What are the drivers of globalization? |
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Definition
-Declining trade barriers
-Evolving technology
-Political dispersion and concentration of power
-Social relationships and organizations
-Global Institution Creation (WTO, IMF, UN) |
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Term
| What is a multinational enterprise? |
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Definition
| Any business that has productive activities in 2 or more countries |
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Term
| List 4 main ways managing an international business is different from domestic business |
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Definition
1- countries are different
2- range of problems is wider and more complex
3- you have to work within limits imposed by government intervention
4-Currency differences |
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Term
Define the Mercantilism Trade Theory
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Definition
| Maintain a trade surplus by maximizing exports and minimizing imports (zero sum game, it's flawed) |
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Term
| What are the 4 classic trade theories? |
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Definition
1. mercantilism
2. absolute advantage- produce when you're more efficient than all other countries, trade for all else
3. comparative advantage- (lowest cost) produce what you're relatively better at by producing at a lower opportunity cost
4. Heckscher Olin- Produce items that you have (factor endowments) |
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Term
| What is Porter's Diamond's pattern of trade influenced by? (4) |
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Definition
1- factor endowments
2- domestic demand
3- relating & supporting industries
4- firm structure, strategy, & rivalry |
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Term
Wine Case
1. How did the french become the dominant competitors in the global wine industry? |
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Definition
| - They had a comparative advantage with their strong domestic market, mature process, skilled labor, and traditional reputation as a premiere producer |
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Term
| Wine Case 2. In the face of the French history of dominance, how were the New World producers able to expand their market share so rapidly in the 1990s? |
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Definition
-Developed innovative processes to grow grapes (cheaper)
-Wine making innovations (cheaper, less regulations to use experimental teqchines)
-Marketing practices (packaging, twist tps, box wine, targeted immature market, sold by grape names to make it easier)
-Distribution practices (owned full value change to increase bargaining power and increase quality control) |
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Term
| What is the argument for government intervention? |
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Definition
-protects jobs and industries
-national security
-consumer protection
-furthering foreign policy objections |
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Term
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Definition
-reduce direct and indirect costs
-reduce capital costs
-reduce taxes
-overcome tariff barriers
-provide better customer service
-spread forex risks
-first mover advantage possible
-learn from local environment
-attract local talent |
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Term
| Global Wine War Take-Aways |
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Definition
If you don’t move along with progression of technology in
industry, you get left behind!
• Government intervention hinder the pursuit of innovation
and creativity!
• Players in the market want government support -- and at
times feel entitled to it!
• Each of the three countries looked within its own borders
and focused strategy on home demand conditions --
Nationalism? Proximity to consumer? Is that strategic? |
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