INTRODUCTİON TO BUSİNESS - Deneme Sınavı - 11

Balance of trade (BOT) is the difference between a country’s imports and its exports for a “given time period”.10 BOT is an important indicator showing strength of a country’s economy

A country that exports more than it imports has a trade surplus. On the contrary, if a country imports more than it exports has a trade deficit.

The critical success factors for MNCs emphasized in the literature are:15
• Entering into complex markets to gain new knowledge.
• Recognition and reputation.
• Key strategic partnerships.

Anadolu group is the local partner of Coca Cola in Turkey

Economies of scale is the cost advantage that arises with increased output of a product

Emerging markets are the transition economies such as Brazil, Russia, India,
Mexico, Nigeria, and Turkey that are characterized by high levels of growth despite insufficient infrastructure.

In multinational competition, there are four issues that need to be considered:24
1. Whether to customize products or services in each local market or offer standardized products/services.
2. Whether to employ the same generic competitive strategy everywhere or modify the strategy for each country.
3. Whether to locate a company’s facilities, distribution centers, and customer services operations for location advantages.
4. How to transfer a company’s resource strengths and capabilities among countries to secure competitive advantage.

Companies decide for going international as well as which strategies to follow based on the resources they can allocate for international operations.
Following strategy options are frequently used to compete in foreign markets:26
• Exporting
• Licensing
• Franchising
• Global Strategy

Balance of trade (BOT) is the difference between a country’s imports and its exports for a given time period.

Economies of scale is the cost advantage that arises with increased output of a product.

Purposes of strategic alliances are; joint research efforts, sharing technology, joint use of production on distribution facilities, and marketing one another’s products and services.

In international business environment there are many appeals and advantages of strategic alliances. These are listed below:

Better access to feasible countries from host country to import and market products/services.

Capture economies of scale.

Fill missing information in technical expertise of local markets.

Share distribution facilities and dealer network.

Take advantage of partner’s local market knowledge and networks.

Combine competitive energies toward defeating mutual rivals.

Under some circumstances, there would be pitfalls of strategic alliances such as:

To overcome language and cultural barriers.

To deal with diverse or conflicting operating practices of partners.

To consume time for managers in terms of communication, trust building and coordination

costs.

To create mistrust when collaborating in competitively sensitive areas.

To clash in egos and company cultures.

To deal with conflicting objectives, strategies, corporate values, ethical standards.

To become too dependent on another firm for essential expertise in the long term.

Managerial decision areas are employee motivation, human resource practices, organizational structure, strategy formation and implementation, conflict management, negotiation tactics, and leadership styles.

Cultural relativism refers to the approach that a country’s own unique culture, laws, and business practices determine ethical behavior in a country

For successfully managing the impact of culture on international business, managers:

Approach other cultures by changing your stereotypes and with caution.

Find cultural informants and review practices from unfamiliar cultures.

Learn mental maps that will increase effectiveness in different cultures.

Globalization refers to the integration of economic, political, technological, social, and cultural systems around the world,

Import substitution is an economic policy which defends replacing foreign imports with domestic products.

Economies of scale is the cost advantage that arises with increased output of a product.

Fluctuating exchange rates affect exporters depending upon manufacturing country’s currency power in positive or negative ways.