Expert answer:write a summary with conclusion about FORMS FOR GL
Solved by verified expert:write a summary with conclusion about FORMS FOR GLOBAL BUSINESS with APA style
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l-xport
business. Some companies, however, do not follow the
phase model of globalization. Some skip phases on their
way to becoming more global and less domestic. Others
don’t follow the phase model at all. These are known as
8-3e global new ventures. This section reviews these
forms of global business.3a
Now, founded by
tlnrr.r,
J.S. Ambassador to
Singapore Frank Lavin, specializes in exports. The Ohio-based
corpary
doesn t sell
8-3a
aryhing,
ExPorting
however. Instead, it sets up an
When companies produce products in their home coun-
infrastructure that other compa-
tries and sell those products to customers in foreign countries, they are exporting. Exporting as a form of global
business offers many advantages. It makes the company
less dependent on sales in its home market and provides
a greater degree of control over research, design, and
production decisions. For example, whlle auto sales in
Europe dropped 8.2 percent in 2012, the largest singleyear decline in two decades, sales of Jaguars and Land
Rovers, built in the United Kingdom, were up 32 percent
nies can use for exports. For an
onnuar ree ard a pe’centage of
sales, Export Now
will handle all
of the customs and lega issues
involved in exporting and provide
a^ on r-e “etai space’or the ‘
customers’ prod ucts. According
to Lavin, his service a lows clients
to avoid wholesalers, middlemen,
or distrlbutors, meaning that they
,9
can charge consumers in Chlna
the same prices they do in the
United States. So far, the items
availab e on Export Now’s virtual
z=
ma J include Osprey backpacks,
singing toothbrushes from Brush
=
Buddies, and hearing aid products from McKeon Products.
Source: N. Leiber,”Ex U.5. Ambassador Helps Compan es Break lnto Ch nal’
‘l
Bloornberg Businessureek, 5eptember l, 201 2, accessed lune I 0, 201 3, http://
wwlv.buslnessweek.com/artlcles/201 2 08 23lmaking lt easier to-sel made
rn usa in-china.
@ t?3ffiJ3,1’TNESS
Besides determining whether to adapt organizational
policies and.procedures, a company must also determine how to organize itself for successful entry into
foreign markets.
Historically, companies have generally followed the phase
model of globalization, in which a company makes the
due largely to ex?ofts to China and Asia.35 Though
advantageous in a number of ways, exporting also has its
disadvantages. The primary disadvantage is that many
exported goods are subject to tariff and nontariff barriers that can substantially increase their final cost to
consumers. A second &sadvantage is that transportation
costs can significantly increase the price of an exported
product. For example, when the price of crude oil was
approaching $150 a barrel, manufacturers who made
every,thing from batteries to sofas to industrial pafis
started bringing manufacturing production from overseas back to North America. Jeff Rubin, chief economist
at CIBC World Markets in Toronto, said, “In a world of
triple-&git oil prices, distance costs money.”36 There is a
third disadvantage of exporting: companies that export
depend on foreign importers for product distribution. If,
for example, the.foreign importer makes a mistake on
the paperwork that accompanies a shipment of imported
goods, those goods can be returned to the foreign manufacturer at the manufacturer’s ex?ense.
8-3b
cooPerative Gontracts
When an organization. wants to expand its business
globally without making a large financial commitment
to do so, it may sign a cooperative contract with a
transition from a domestic company to a global compony
in the following
sequential phases: 8-3o exporting,
8-3b cooperative contracts, 8-3c strategic alliances,
ond 8-3d wholly owned affiliotes. At eoch step, the
company grows much larger, uses those resources to enter
more global markets, is less dependent on home-country
sales, and is more committed in its orientation to global
CHAPTER
8:
G
oba Management 1 63
/
a fee for
foreign business o\’ner lvh
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