Incoterms 2010 and International Business - 101
Incoterms 2010 and International Business - Wild - Quick Study - Chapter 11
Incoterms 2010 and International Business - 101
International Business: The Challenges of Globalization, 8th Edition, Wild & Wild
Incoterms 2010 and International Business - Wild - Quick Study - Chapter 11
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Quick Study
Quick Study 1
- Q: A written statement of why a company exists and what it plans to accomplish is called a what?
- Most companies have a general purpose for why they exist that they express in a mission statement—a written statement of why a company exists and what it plans to accomplish.
- Q: A special ability of a company that competitors find extremely difficult or impossible to equal is called a what?
A: A core competency is a special company ability that competitors find extremely difficult or impossible to equal. It is not a skill. Individuals possess skills such as the ability to hit 70 home runs in professional baseball. A core competency refers to multiple skills that are coordinated to form a single technological outcome. Core competencies develop over long periods of time and are difficult to teach or transfer.
- Q: Value-chain analysis involves separating a company’s activities into what two categories of activities?
A: Value-chain analysis is the process of dividing a company’s activities into primary and support activities and identifying those that create value for customers. Primary activities include inbound and outbound logistics, manufacturing (or operations), marketing and sales, and customer service. Support activities include firm infrastructure, human resource management, technology development, and procurement. Each primary and support activity is a source of strength or weakness for a company.
Quick Study 2
- Q: What strategy involves adapting products and their marketing strategies to national markets to suit local preferences?
A: A multinational (multidomestic) strategy is a strategy of adapting products and their marketing strategies in each national market to suit local preferences. The main benefit of a multinational strategy is that it allows companies to closely monitor buyer preferences in each local market and respond quickly and effectively as new buyer preferences emerge. The main drawback of a multinational strategy is that it does not allow companies to exploit scale economies in product development, manufacturing, or marketing.
- Q: What is the benefit of using a global strategy?
A: A global strategy is a strategy of offering the same products using the same marketing strategy in all national markets. The main benefit of a global strategy is its cost savings due to product and marketing standardization. The main problem with a global strategy is that it may cause a company to overlook important differences in buyer preferences from one market to another.
- Q: Deciding on a general competitive strategy in the marketplace is the key to developing what?
A: The key to developing an effective business-level strategy is deciding on a general competitive strategy in the marketplace.
Quick Study 3
- Q: How a company divides its activities among separate units and coordinates activities among units is called what?
A: Organizational structure is the way in which a company divides its activities among separate units and coordinates activities among those units. If a company’s organizational structure is appropriate for its strategic plans, it will be more effective in working toward its goals.
- Q: What type of decision making helps coordinate the operations of international subsidiaries?
A: A vital issue for top managers is determining the degree to which decision making in the organization will be centralized or decentralized. Centralized decision making is the degree to which decision making is centralized at a high level in one location such as headquarters. Decentralized decision making is the degree to which decisions are made at lower levels, such as in international subsidiaries.
- Q: What is the benefit of decentralized decision making in an organization?
A: Decentralized decision making is beneficial when fast changing national business environments put a premium on local responsiveness.
Quick Study 4
- Q: What type of organizational structure tends to concentrate all international expertise in one division?
A: An international division structure separates domestic from international business activities by creating a separate international division with its own manager.
- Q: An organizational structure that divides worldwide operations according to a firm’s product areas is called what?
A: A global product structure divides worldwide operations according to a company’s product areas. The global product structure is suitable for companies offering diverse sets of products or services.
- Q: What do we call a group of employees who work at similar levels in different departments?
A: A cross-functional team is one that is composed of employees who work at similar levels in different functional departments. Such teams can improve coordination among departments, improve product quality, and help companies in reorganizing themselves around processes.
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Ethical Challenge |
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You are the CEO of a multinational corporation that operates in more than 100 nations worldwide. Recent changes in the global economy are redrawing many geographical and political borders. The growing interdependence of socially, politically, economically, and legally diverse countries is causing firms to revise operating policies and strategies. You are personally involved in developing a code of ethics for your firm that reflects today’s legal and moral atmosphere. You want your firm’s code to be effective across all markets in which it operates.
11-5 Given the complexity of the issues involved, what sort of policy do you think is appropriate for a firm involved in dissimilar nations?
11-6 Do you think that it is possible to create a uniform code of ethics that is applicable to any business operating in any culture? What issues should such a code address?
A: Many CEOs wrestle with the idea of adapting their firm’s code of ethics to local laws and customs around the world. Clearly, such global codes of conduct do exist. However, students should try to think of situations in which such a code could be challenging to implement. Although such codes look nice in the company’s annual report, the real difficulties lie on the front lines in international markets when they are implemented (to varying degrees of success).
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Teaming Up |
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Two groups of four students each will debate the merits of adopting either a multinational or global strategy (each side will advocate one strategy). After the first student from each side has spoken, the second student will question the opposing side’s arguments, looking for holes and inconsistencies. The third student will attempt to answer these arguments. The fourth student will present a summary of each side’s arguments. Finally, the class will vote to determine which team has offered the more compelling argument.
A: Students should be sure to support their arguments with features of each of the two types of strategies discussed in this chapter. They should also be prepared to defend their positions, after the debate, if they are called on to give a synopsis of their position in class. It may also be useful to give students some time to do outside research to prepare for the debate.
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Practicing International Management Case |
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IKEA’s Global Strategy
11-9 Q: When company founder Kamprad decided to expand into China his decision was not based on market research but, rather, on his own intuition. How well is IKEA doing in China? Did Kamprad’s decision pay off?
A: So far IKEA’s stores in Beijing and Shanghai are performing well. IKEA changed some elements of its global strategy in culturally diverse China. In China, the company balances the implementation of its global policies and the need for greater localization. IKEA has improved its responsiveness to the needs of the China market regarding its corporate culture, structure, and strategy.
11-10 Q: Relying on topics covered in this chapter, would you classify IKEA’s approach as one of standardization or adaptation in markets around the world? Explain.
A: IKEA has standardized its brand image and main marketing concept worldwide. It has only adapted its facilities in terms of size to suit the U.S. market. The approach certainly seems to be working well for IKEA.
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INTERNATIONAL BUSINESS - FREE DOWNLOADS
International Business: The New Realities, 4th Edition, Cavusgil, Knight & Riesenberger
International Business: The Challenges of Globalization, 8th Edition, Wild & Wild
International Business, 15th Edition, Daniels, Radebaugh & Sullivan
International Business: A Managerial Perspective, 8th Edition, Griffin & Pustay
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