Foundations of Business: Chapter 3 - Global Business

Identify exportable products:
- Identify key selling features; needs that they satisfy; selling constraints.
Identify key foreign markets:
- Determine customers; market research for priority countries.
Analyze sales in each priority market:
- Locate government/private-sector resources; service and sales requirements.
Set export prices and payment terms:
- Establish pricing, sales terms, and payment methods.
Estimate resource requirements and returns:
- Financial requirements, human resources, production capacity estimates.
Establish overseas distribution network:
- Key marketing decisions including distribution agreements, pricing, policies, customer knowledge.
Determine shipping, traffic, and documentation procedures:
- Methods of shipment, containerization, export licenses, documentation procedures.
Promote, sell, and be paid:
- Use international media, determine overseas travel needs, customer follow-up.
Continuously analyze current marketing, economic, and political situations:
- Recognize changing factors influencing marketing strategies.

Exporting:
- May sell outright to an export-import merchant or employ an export-import agent for commissions.
- Can establish sales offices in foreign countries.
Trading Company:
- Buys products in one country and sells to buyers in another without manufacturing.
Countertrade:
- An international barter transaction.
Licensing:
- A contractual agreement allowing another to produce and market a product for royalties.
- Advantages: Simple expansion with minimal investment.
- Disadvantages: May damage product image if standards are not maintained.
Franchising:
- Similar to licensing, focuses on operating facilities (stores) on behalf of another.
Contract Manufacturing:
- Firms contract another to manufacture products/extensions of products.
Outsourcing:
- When firms contract activities to another firm, often leading to discussions about job loss.
Joint Ventures and Alliances:
- Joint Venture: Partnership for a specific goal, involves shared risk and knowledge.
- Strategic Alliance: Partnership for competitive advantage globally.
Direct Investment:
- Involves building/purchasing facilities in a foreign country.
- Multinational Corporation: Operates on a worldwide scale without associations to specific nations.

Process of ensuring cross-border transactions occur smoothly, typically involving letters of credit, bills of lading, etc.

Tariffs:
- Taxes on foreign products.
- Revenue tariffs: generate income.
- Protective tariffs: shield domestic industries.
Dumping:
- Exporting products at prices lower than in home markets.

’s currency compared to others.

For:
- Balance payment equalization, protection of industries, national security, citizen health.
Against:
- Higher consumer prices, limited choices, misallocation of resources, job losses.

Differences in standards of living, currency values affecting profits, and less reliable infrastructures in some nations may present challenges.

The legal and regulatory framework greatly impacts international business, including privacy and bribery norms differing across countries.

Cultural differences can hinder communication, negotiations, and product acceptance.

U.S. Small Business Administration (SBA):
- Offering loans up to 5 million, plus assistance for export-related costs.
Export-Import Bank:
- An independent agency aiding U.S. export financing.
Multilateral Development Banks:
- Banks like the World Bank provide loans for development to assist in growth.
International Monetary Fund (IMF):
- Provides short-term loans to nations with balance-of-payment deficits, promoting international monetary cooperation and trade growth.