5.2 - Entering Global Business

Offshore Business

  • business may go offshore for growth opportunities

  • considerations in taking a business to another country:
    - labor laws
    - legal documents
    - logistics
    - diverse workforce
    - intercultural communication

  • logistics - planning and managing the flow of goods, services, and people to a destination

  • diversity - having people from different backgrounds, cultures, or demographics come together in a group
    - benefits an organization, but comes with challenges

  • intercultural communication - the process of sending and receiving messages between people of various cultures

  • english as a second language (ESL) - the use of english by people with a different native language

Ways to Enter the Global Market

  • multinational corporation - a business that operates in more than one country

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  • licensing - when a business sells the right to manufacture its products or use its trademark
    - rights sold in exchange for a fee is known as a royalty
    - ex) mcdonalds acquiring a trademark license from disney to put characters in happy meals

  • franchise - the right to sell a company’s goods or services in a specific area
    - ex) chick-fil-a is a franchise

  • franchisor - the parent company that owns the chain and the brand

  • franchisee - the person or company that buys the rights to use the brand
    - can enter a market with an already existing or good service.

  • joint venture - a partnership of two or more companies that work together for a specific business purpose
    - may be the only way to start a business in some countries