global aspects of entrepreneurship - viublogswordpress.viu.ca/fenix/files/2016/06/global.pdf · ......

Copyright © 2011Pearson Education, Inc. Publishing as Prentice Hall

Global Aspects of

Entrepreneurship

CHAPTER 15

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 15 - 2 Ch. 15: The Global Aspects of Entrepreneurship

Why “Go Global?”

Offset sales declines in the domestic market

Increase sales and profits

Extend products’ life cycles

Lower manufacturing costs

Lower product cost

Improve competitive position

Raise quality levels

Become more customer-oriented

In addition to the text

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch. 15: The Global Aspects of Entrepreneurship

Nine Strategies for Going Global

Creating a Web Site

Relying on Trade Intermediaries

Creating Joint Ventures

Foreign Licensing

International Franchising

Countertrading & Bartering

Exporting

Establishing International

Locations

Importing &

Outsourcing

15 - 3

FIGURE 15.1


Strategies For “Going Global”

Create a presence on the Web

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch. 15: The Global Aspects of Entrepreneurship

Asia

41.2%

15 - 5


The Web’s Global Reach

Available 24 hours a day to anyone anywhere in the world.

1.60 billion Web users worldwide

220 million in U.S.

Nearly 1.4 billion in other countries

Customers who live outside the U.S. account for more than 50% of all online sales by U.S. companies

54% of eBay transactions take place outside the U.S.



Rely on trade intermediaries

Strategies For “Going Global” (continued)


Trade Intermediaries

Domestic agencies that serve as

distributors in foreign countries for

companies of all sizes.

Types of intermediaries:

Export Management Companies (EMCs)

Export Trading Companies (ETCs)

Manufacturer’s Export Agents (MEAs)

Export merchants

Resident buying offices

Foreign distributors





Form joint ventures

(continued)


Joint Ventures

Domestic joint venture – two or more

domestic companies form an alliance for

the purpose of exporting their goods and

services in a foreign market.

Foreign joint venture – a domestic firm

forms an alliance with a company in the

target nation.

Most important ingredient:

Choosing the right partner.

Use the joint venture as a

learning process.





Form joint ventures

Engage in foreign licensing

Consider international franchising

(continued)


International Franchising

To expand internationally, franchisers

should:

1. Identify the country or countries that are best

suited to the franchiser’s business concept.

2. Generate leads for potential franchisees.

3. Select quality candidates.

4. Structure the franchise deal.

Direct franchising

Area development

Master franchising


15 - 13 Ch. 6: Franchising and the Entrepreneur





Form joint ventures



Use countertrading and bartering

Export

(continued)


Exporting

Small business accounts for 90.7% of all

companies involved in exporting, but they

generate just 21% of the dollar

value of the nation’s exports.

Significant impact: Small companies

generate $1.1 billion each day in export

sales!


1. Recognize that even the tiniest companies

and least experienced entrepreneurs have

the potential to export.

2. Analyze your product or service.

3. Analyze your commitment to developing

export markets.

4. Research potential markets and pick your

target.

Steps to Successful Exporting


Ch. 15: The Global Aspects of Entrepreneurship

FIGURE 15.4 Small Business Exports: Number of Countries to Which Small Companies Export

15 - 17


Steps to Successful Exporting

5. Develop a distribution strategy.

6. Find your customer.

U.S. Department of Commerce

International Trade Administration

7. Find financing for export sales.

8. Ship your goods.

9. Collect your money.

(continued)


FIGURE 15.5 How a Letter of Credit Works



Establish a presence on the Web


Form joint ventures



Use countertrading and bartering

Export

Establish international locations

Use importing and outsourcing


Steps to Successful

Importing or Outsourcing

Make sure that importing or outsourcing

is right for your business.

Establish a target cost for your product.

Do your research before you leave

home.

Be sensitive to cultural differences.

Do your groundwork.


Steps to Successful

Importing or Outsourcing

Protect your company’s intellectual

property.

Select a manufacturer.

Provide an exact model of the product

you want manufactured.

Stay in constant contact with

the manufacturer and try to

build a long-term relationship.

(continued)


Barriers To International Trade

Domestic Barriers

Government imposed barriers.

Attitude: “My company is too small

to export.”

Lack of information about

how to get started.


International Barriers

Tariff – A tax a government imposes on

goods and services imported into that

country.

Nontariff barriers – Governments that

protect domestic industries

Quotas - Limits on the amount of a

product imported into a country.





Embargo - Total ban on imports of

certain products.

Dumping - Selling large quantities of a

product in a foreign country below cost

to gain market share.

(continued)




Political barriers - Rules, regulations and

political risks.

Business barriers – Different cost

structures and business practices.

Cultural barriers - Differing languages,

philosophies, traditions,

and accepted practices.

(continued)


International Trade

Agreements

Major Agreements:

World Trade Organization (WTO)

North American Free Trade

Agreement (NAFTA)

Dominican Republic - Central

America Free Trade Agreement

(CAFTA-DR)


Global effectiveness requires

entrepreneurs to:

Learn about the global market

Seek the assistance of professionals

Recruit and train employees to think globally

Consider using partners and joint ventures

Determine which opportunities best fit your company

Conclusion


All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of

the publisher. Printed in the United States of America.

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