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Global Marketing Troy University Test 1

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Domestic Marketing
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marketing activities within a country’s national borders
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International Marketing
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Marketing activities in more than one country
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Global Marketing
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the integration and control of marketing activities on a global basis
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The idea that world markets are converging (becoming similar) due to popular global culture defines what
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Global Marketing
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CAGE Framework
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Cultural Differences, Administrative Distance, Geographic Distance, Economic Distance
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Advantages of participating in global marketing
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reach a higher number of customers, promote world peace, find production inputs, find low cost production locations, acquire new technologies and production processes, form strategic alliances, it is a counter attack strategy, improve consumer’s quality of life
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Drivers of globalization
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rapid growth of WTO and regional integrations, acceptance of the free market system, impact of the internet, desire to manage global resources, increasingly mobile workforce, growth of global transportation and business logistics systems
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Why are emerging market multinationals more likely to deliver products for the lowest price?
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They have favorable market conditions
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What leads to innovation?
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The identification of local preferences
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What does globalization reduce?
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National Sovereignty
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What are the 3 main drivers of globalization?
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firm’s strategic imperatives, environmental changes, political conditions
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CULTURAL definition of globalization
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westernization
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FINANCIALLY the definition of globalization is
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the efficient allocation of global financial resources
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TECHNOLOGICALLY the definition of globalization is
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the facilitation of access to global information
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EDUCATIONALLY the definition of globalization is
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the mobility of labor and intellectual capacity
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ECONOMICALLY the definition of globalization is
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economic growth and poverty reduction
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Why is India important?
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It currently plays a large role in information technology innovation and major US multi-nationalists rely on Indian employees to design software platforms and next generation features
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MARKETING definition of global marketing
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a marketing strategy that consciously addresses global customers, markets, and competition in formulating a business strategy
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CONSUMER BEHAVIOR definition of global marketing
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an approach to international strategy that argues for marketing a product in essentially the same way everywhere in the world
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GloCal Strategy
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Think globally, act locally
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Asian Tiger Countries
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Singapore, South Korea, Hong Kong, Taiwan, and China
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EPRG Management Orientations
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Regiocentric, Ethnocentric, Geocentric, Polycentric
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What are the key Marketing concepts for developing/emerging countries?
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Affordability and Availability/Accessibility
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4 A’s of Marketing
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Accessibility/Availability, Affordability, Acceptability, Awareness
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What is the most important factor of the Macro-Global Environment?
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Political Stability
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Who is the number one exporter in trade volume? #2?
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China, US
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Define Balance of Trade
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Difference between export and import of goods and services
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Define Balance of Payments
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Flow of cash between domestic country and all other foreign countries (includes not only import and export of goods and services but also financial capital transfer)
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What does global marketing require?
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Requires the coordination and integration of products, marketing, and other functional activities across countries
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What does IMF stand for?
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International Monetary Fund
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Michael Porter’s 5 Factors that Shape Industrial Competition
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consumer power, supplier power, industry rivalry, threat of entry, substitutes
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What does GNH stand for? What is it’s downfall?
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Gross National Happiness; it is hard to measure and it is subjective (depends on personality, pessimism, and optimism)
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Absolute advantage
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each country should specialize in the production and export of the product that it produces most efficiently; should procude that and trade for the rest
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comparative advantage
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produce what is relatively more efficient
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Describe a market economic system
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emphasizes growth and prosperity, minimizes social interactions and relationships
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In a market economy who decides what is produced?
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CONSUMERS
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BRIC Countries
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Brazil, Russia, India, China
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What does the color red imply?
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Australian- land, earth Celtic-death, afterlife China- good luck, celebration India- purity South Africa- mourning Russia – Communism North America – Danger, love, passion, excitement Middle East – luck, good fortune
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What does the color black imply?
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Australia – color of the people China – young boys Thailand – bad luck, unhappiness, evil US/Europe: mourning, death Nigeria – ominous
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Does US has a feminine or masculine culture?
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Feminine
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What are Hofstede’s Dimensions?
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Power Distance Uncertainty Avoidance Masculine vs. Feminine Time Orientation Individual vs. Collectivism
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Trompenaar’s Dimensions Definition:
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each culture has its own way of thinking, its own values and beliefs, and difference preferences based on a variety of different factors
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What are Trompenaar’s Dimensions
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Universalism vs. Particularism Individualism vs. Communitarianism Specific vs. Diffuse Neutral vs. Emotional Achievement vs. Ascription Sequential time vs. synchronous time Internal Direction vs. outer direction
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Cultural Friction Definition
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Organizations may choose different forms of market entry modes, where join ventures or mergers are likely to create higher friction that export based forms of entry; however, higher friction may not automatcially be detrimental but could also result in new businesses and strategies
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What time of time orientation does Japan have?
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Dichromic In technology and foreign dealings they are monochronic In personal relations they are polychronic
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What are some facts about India’s population?
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It has over one billion people; income is polarized, 60% live on less than two dollars a day
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Only 30 percent of the world’s GDP is generated in countries governed by which type of law system?
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Civil and common
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How long can trademarks be renewed for?
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Forever so long as they are being used
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What is a company’s most valuable asset?
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Trademark
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What is included in intellectual property?
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Trade Secrets Copyrights Trademarks Patents
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What is the Madrid Agreement?
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Administered by the WIPO; one stop registration for trademarks; makes them valid in all participating countries for 10 years
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Definition of patent
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form of protection that provides a person or legal entity with exclusive rights for making, using, or selling a concept or invention and excludes other from doing the same for its duration; max is years
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Where is software piracy an endemic?
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Emerging economies
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What are the three ways to handle disputes
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litigation arbitration mediation/conciliation
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What are the downsides of litigation
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costly takes time bad public relations collecting award is difficult
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Mediation/conciliation
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not enforceable but good for long term relationship
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Arbitration
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dispute settled by professionals in the industry, less expensive, more efficient, decision is enforceable
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What power does the World Trade Organzation hold
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They have sanctions power; can tell the rest of the world not to trade with you
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What is the best advice for global manufacturing companies?
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Achieve ISO 9000 certification
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What are the qualifications for ISO 9000 certification
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top management commitment to quality employee competence processes (production) management Quality planning (TQM system)
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What are the three components of terrorism risk?
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1 )threat to target 2) target’s vulnerability 3) consequences of successful attack
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How do you manage political risk?
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1. buy insurance 2. domestication 3. do good things
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Domestication
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sharing ownership with locals; allows your stuff to not be taken
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The internet contributes to…
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GDP
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Globalization is driven by (one thing)…
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international trade and made possible by technology
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Gloablization definition
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the trend toward a single integrated and independent world
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Pax Romana
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Roman Peace in Italy
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Pax Americana
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After WWII, winning countries promoted world trade
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What does emporia and emporoi mean?
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Greek words for trade and merchants
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What does globalization mean to political scientists?
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reduction in national sovereignty
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Who coined the term “global village”?
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Marshall McLuhan
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Who said the world was flat?
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Thomas Friedman
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Why is cultural protectionism more difficult?
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the creation of the internet
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What is a negative of financial globalization?
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interconnections of world financial markets may also increase exposure to real shocks and eventually large-scale economic disruptions
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What is the major controversy regarding economic globalization?
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the question of whether or not it reduces poverty; the surest way to reduce poverty is to increase economic growth
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The worldwide integration of marketing activities has resulted in the development of ….
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global products and brands and global communications and distribution strategies; but even these strategies need to account for some local experiences
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What ares some trends in globalization?
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Economic growth of pacific rim countries (asian tigers) Capitalism in socialist countries Women becoming leaders Growth in biotechnology Similarities in individual lifestyles
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What is the most efficient method of production?
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Free Market System
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What percent of fortune companies have women at the top?
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5%
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What are some paradoxes in globalization?
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rich versus poor power vs. fragility Media overload vs. fragmentation of media
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How can small business or people compete globally?
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They find niche markets
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The four Ps of marketing
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product place price promotion
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What strategy is used in a polyentric orientation?
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decentralized market approach and design markeing strategy for each market individually
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What strategy is used in a geocentric orientation?
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identify common denominator between markets and standardize as much as possible
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What strategy is used in a regiocentric orientation?
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Benefit from similarities between countries and use the same marketing strategy for several of them
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What strategies are used in an ethnocentric orientation?
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Simply export whatever you are producing and doing at home
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Who is Adams Smith?
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The father of modern economics; wrote “The Wealth of the Nation”; responsible for absolute advantage
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Transnational Strategy definition
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companies integrate aspects of learning, innovation and knowledge development; use a strategy in forign countries that exploits lovation economies, leberages core competencies, and respons to key local conditiions
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How is value created in a transnational strategy?
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created by the relentless renewal, enhancement, and exchange of ideas, products, processes across functions and borders
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What are the components of the Macro-Global Environment?
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PESTEL Political stability Economic factors Social factors Technological factors Environmental factors Legal Factors
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If imports are greater than exports what does that create?
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trade defecit
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If imports are less than imports what occurs?
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trade surplus
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Who is the largest exporter of services?
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US
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What are the three main categories of balance of payments
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current account (inflow and outflow of goods and services) capital account (deals with capital trade) financial account (deals with bonds, real estate, stocks)
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What does the world bank do?
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Helps countries facilitate trade
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What did David Ricardo develop?
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Comparative advantage
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Who developed new trade theory?
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Paul Krugman; won a Nobel peace prize, economies of scale can be so significant they can outweigh the traditional theory of comparative
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What are the four basic economies?
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Traditional Market Command Mixed
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Many developing economies have what type of economic system?
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Mixed
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What country has a large gap between the rich and the poor?
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Philippines
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Green Economy
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environmentally friendly production system; sussstainable production system
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sustainability
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you do not deplete resources or pollute the environment
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In what category does supply determine demand?
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high technology markets
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Electronics are…
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production oriented while most are consumer oriented
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How do you reduce the risk of market failure for high-tech products
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1. determine whether first mover advantage is necessary 2. rethink the value of market research before launching the product 3. target the market carefully; exploit innovators and early adopters
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The green economy seeks to optimize the synergy among the three sets of values
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people (social) planet (environmental) profit (financial)Tr
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What are the two segments of the green economy?
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True Believers Enlightened Environmentalists (more focused on preserving the environment)
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What are the managerial guidelines and policy implications for improving the profitability of green products
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overcome apathy (emphasize positive aspects) provide info (need to be authentically educated) distinguish benefit (position product as more than just green) balance price and equity (green products need to perform at least as good as other products; determine elasticity) public policy (incentive green living )
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What is a major failture of businesses?
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Ignoring cultural differences
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Two types of culture
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deep culture (unseen) surface culture (seen)
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What is the national character of the US
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materialism industry haste informality
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What are the dimensions of the Schwartz Value Survey
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Openness to Change Self transcendence Conservation Self enhancement (this is used to study consumer behavior for segmentation and advertising)
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GLOBE Model
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Includes 61 nations grouped into 10 clusters uncertainty avoidance power distance societal collectivism gender egalitarianism assertiveness future orientation performance orientation humane orientation
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What measures cultural distance
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Kogurt/Singh Index 1. cultural distance 2. cultural diversity 3. cultural friction 4. cultural positions
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Chinese customers rely heavily on ____ for information
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advertisements
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Values
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Moral principles and beliefs important to a society
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ritual
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behaviors that are learned and repeated regularly
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symbols
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objects that represent ideas important to a society
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what are the three levels of international cultural behaviors
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cultural imperative (must) cultural elective (choice) culture exclusive (DON’T)
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Products are purchased within a….
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cultural context
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Culture
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the sum of the values, rituals, symbols, beliefs, and thought processes that are learned, shared by a group of people, and is transmitted from generation to generation
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Five types of world legal systems
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code common civil Islamic socialist tenants
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What principle is intellectual proptery law based on?
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principle of territoriality
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Are there any worldwide enforceable laws
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no
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what kind of law does most of the world have
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code law
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what cannot you not do in Islamic countries
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charge interest
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What are the Marxist social tennants
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any laws are created to improve the government; public government above private rights; tenets are strictly subordinate to prevailing economic conditions
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What was the problem with GATT?
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1. protectionism of markets 2. services not included in agreement 3. no enforceable power
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What did the WTO do?
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World Trade Organization replace GATT; fixed problems, has sactions power
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What are the types of political risk?
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1. confiscation; seizure of compnay assets without payment 2. expropriation: seizure of company assets with payment (nationalization) 3. domestication: government requires the MNC to settle business ownership with local investors
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Does US has a feminine or masculine culture?
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Feminine