Scarb Eesbm6e PPT 15

CHAPTER
Global
Global Aspects
Aspects of
of
Entrepreneurship
Entrepreneurship
Copyright 2011Pearson Education, Inc. Publishing as Prentice Hall
15
Why Go Global?
In addition to the text
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
Ch. 15: The Global Aspects of Entrepreneurship
Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
15 - 2
Nine Strategies for Going Global

Creating a Web Site
Relying on Trade Intermediaries
Establishing International
Locations
Importing &
Outsourcing
Creating Joint Ventures

Exporting
Countertrading & Bartering
Foreign Licensing
International Franchising
FIGURE 15.1
15 - 3
Strategies For Going Global
Create a presence on the Web
15 - 4
Asia
41.2%
15 - 5
The Webs 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.
15 - 6

(continued)
Rely on trade intermediaries
15 - 7
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)
Manufacturers Export Agents (MEAs)
Export merchants
Resident buying offices
Foreign distributors
15 - 8

(continued)
Form joint ventures
15 - 9
Joint Ventures
Domestic joint venture two or more U.S.

companies form an alliance for the purpose
of exporting their goods and services
abroad.
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.
15 - 10

(continued)
Form joint ventures
Engage in foreign licensing
Consider international franchising
15 - 11
International Franchising
To expand internationally, franchisers

should:
1. Identify the country or countries that are best
suited to the franchisers business concept.

2. Generate leads for potential franchisees.
3. Select quality candidates.
4. Structure the franchise deal.
Direct franchising
Area development
Master franchising
15 - 12
Ch. 6: Franchising and the Entrepreneur
15 - 13

(continued)
Form joint ventures
Use countertrading and bartering
Export
15 - 14
Exporting
Small business accounts for 90.7% of all
companies involved in exporting, but they
generate just 21% of the dollar
value of the nations exports.
Significant impact: Small companies

generate $1.1 billion each day in export
sales!
15 - 15
Steps to Successful Exporting

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.
15 - 16
FIGURE 15.4
Small Business Exports:

Number of Countries to Which Small Companies Export
15 - 17
Steps to Successful Exporting

(continued)
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.
15 - 18
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
15 - 20
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.
15 - 21
Steps to Successful
Importing or Outsourcing
(continued)
Protect your companys 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.
15 - 22
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.
15 - 23

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.
15 - 24

(continued)
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.
15 - 25

(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.
15 - 26
International Trade
Agreements
Major Agreements:
World Trade Organization (WTO)
North American Free Trade

Agreement (NAFTA)
Dominican Republic - Central

America Free Trade Agreement
(CAFTA-DR)
15 - 27
Guidelines For Success In

International Markets
Take time to learn before jumping in.
Seek out assistance from professionals.
Make yourself at home in all three of the worlds

key markets - North America, Europe, and Asia.
Appeal to the similarities in the various regions

and recognize the differences in local cultures.
Develop new products for the world market.
Learn foreign customs and languages.
15 - 28
Guidelines For Success In

International Markets
(continued)
Glocalize - make global decisions about

products, markets, and management and allow
local employees to make tactical decisions.
Recruit and retain multicultural workers.
Train employees to think globally.
Hire local managers to staff foreign offices and
branches.
Do whatever seems best wherever it seems best.
Consider using partners and joint ventures to
break into foreign markets.
15 - 29
Conclusion
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
15 - 30
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.
15 - 31

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CHAPTER

Copyright 2011Pearson Education, Inc. Publishing as Prentice Hall

Offset sales declines in the domestic market

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Nine Strategies for Going Global

Creating Joint Ventures

Countertrading & Bartering

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Strategies For Going Global

Create a presence on the Web

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

The Webs Global Reach

Available 24 hours a day to anyone anywhere

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

54% of eBay transactions take place outside

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Strategies For Going Global

Create a presence on the Web

Rely on trade intermediaries

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Domestic agencies that serve as distributors

Export Management Companies (EMCs)

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Strategies For Going Global

Create a presence on the Web

Rely on trade intermediaries

Form joint ventures

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Domestic joint venture two or more U.S.

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Strategies For Going Global

Create a presence on the Web

Rely on trade intermediaries

Form joint ventures

Engage in foreign licensing

Consider international franchising

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

To expand internationally, franchisers

suited to the franchisers business concept.

Ch. 15: The Global Aspects of Entrepreneurship

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch. 6: Franchising and the Entrepreneur

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Strategies For Going Global

Create a presence on the Web

Rely on trade intermediaries

Form joint ventures

Engage in foreign licensing

Consider international franchising