Why did Starbucks fail? - Answer 1. Expanded too fast
2. Didn't market to Australian Cafe and Expresso Culture
3. Local Cafe > Chain
4. Coffee too sweet
Globalization - Answer A process of broadening of interdependent relationships among people who are divided into national borders
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D270 Midterm Prep Exam And All Solved
Answers.
Why did Starbucks fail? - Answer 1. Expanded too fast
2. Didn't market to Australian Cafe and Expresso Culture
3. Local Cafe > Chain
4. Coffee too sweet
Globalization - Answer A process of broadening of interdependent relationships among people who are divided into national borders
Reduction of Barriers - Answer Removal of blocks that inhibit the movement of goods, services, capital, technology, people
International Business - Answer Any commercial transactions between 2 or more countries
How do we measure Globalization? - Answer 1. 25% of global production sold outside country of origin (7% in 1950)
2. Restrictions on imports have been decreasing since WWII 3.Foreign ownership of assets has been increasing since WWII
4. World trade has grown more rapidly than production since WWII
Forces behind current extent of globalization - Answer 1. Increase in and application of technology
2. Liberalization of cross-border trade and resource movements
3. Development of services that support international business activities
4. Growing consumer pressures
5. Increased global competition
6. Changing political situations and government policies
7. Expanded cross-national cooperation Globalization Retreat - Answer - Immigration and Terrorism
- Brexit Vote
- Trans-Pacific Partnership (TPP) Failure -U.S. Presidential Elections
-Putin Meddling in Democratic Processes
- France's Elections
- Brazil Elections
The Negative Side of Globalization - Answer 1. Threats to national sovereignty
2.Environmental stress
3. Growing income and inequality stress
Why do firms go international? - Answer 1. Expand Sales
2. Acquire Resources
3. Minimize Risk
4. Image
Key reasons Disney chose Paris - Answer *68 million people within 4 hour drive
*Better government deals than Spain *Reviewed 1200 locations in Europe before deciding *Lots of Europeans were visiting Disney World in Orlando
*Many Disney stories and princesses are European
*Barcelona 2nd choice but seasonal high winds and government challenges led to it being eliminated. *Paris location land was flat•Paris agreed to build metro and train stations by the park entrance
* Chunnel coming putting 30 million people 2 hours or less away
*Roy Disney later said probably should have built in Spain
How many countries are there in the world? - Answer 193 (UN list) Which country has the highest percentage of internet users? - Answer Bahrain
Modes of International Business - Answer Exports/imports and investments
types of market penetration - Answer 1. Greenfield
2. Acquisition
3. Joint Venture
4. Equity Investment
5. Sales Operation
6. Franchise/Licensing
7. Export via Local Distributor
Indirect or Direct Export
Direct Exports - Answer Taking orders in home market and shipping them direct to customers in a new market
Cost: Very Low
Control: Moderate
Govern: through home market office
Pros: *Easy to initiate*No shared control or ownership
Cons: *High shipping times, costs, & complexity for individual items*Lack of sales & marketing presence in new
market*No local adaptation
Exporting via Local Distributor - Answer Entering an agreement for a local distributor to sell goods produced in home market in a new market
Cost: Low
Control: Low
Govern: Agency Agreement with agent in new market.
Pros: Flexible*Fast*Some local adaptation
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