Globalization and Business Strategies

The video tutorial explores various forms of global business, including exporting, cooperative contracts, strategic alliances, and joint ventures. It highlights the advantages and disadvantages of exporting, such as reduced dependency on home markets but increased costs due to tariffs and transportation. Cooperative contracts like licensing and franchising allow businesses to expand globally with minimal financial commitment. Strategic alliances, particularly joint ventures, involve collaboration between companies to form new entities. Recent trends, including reliable air travel, low-cost communication, and experienced global business professionals, have enabled companies to become global from inception.

What is one major advantage of exporting for a company?

• It avoids all tariffs and non-tariff barriers.

• It makes the company more dependent on the home market.

• It provides greater control over production decisions.

• It eliminates all transportation costs.

What is a primary disadvantage of exporting?

• It reduces the company's control over research.

• It increases dependency on the home market.

• It subjects goods to tariffs and non-tariff barriers.

• It eliminates the need for transportation.

How does a licensing agreement benefit the licensor?

• By allowing the licensee to set their own brand name.

• Through royalty payments from the licensee.

• By eliminating the need for marketing.

• Through complete control over the licensee's operations.

What is a key feature of a franchise agreement?

• The franchisee receives no support from the franchisor.

• The franchisee can operate in any location without restrictions.

• The franchisor licenses the entire business to the franchisee.

• The franchisee pays no fees to the franchisor.

What is a joint venture?

• Two companies merging into one.

• A single company expanding into a new market.

• A company acquiring another company.

• Two companies forming a third company together.

What is a common strategic alliance in global business?

• Joint venture

• Franchise agreement

• Licensing agreement

• Exporting

What was the traditional approach to globalization?

• Phased model of globalization

• Immediate global expansion

• Random market entry

• Complete reliance on home market

Which trend has NOT contributed to skipping the phased model of globalization?

• Low-cost communication strategies

• A critical mass of experienced business people

• High-cost communication strategies

• Quick, reliable air travel

How has low-cost communication impacted global business?

• It has made it harder to communicate with global partners.

• It has eliminated the need for face-to-face meetings.

• It has facilitated easier communication with global stakeholders.

• It has increased the cost of global operations.

What is a characteristic of global new ventures?

• They start with a focus on the home market only.

• They are founded with a global strategy from the beginning.

• They rely solely on traditional business models.

• They avoid using modern communication technologies.