AllFreePapers.com - All Free Papers and Essays for All Students
Search

Globalization of Manufacturing and Markets: With Advances in Tech, We Have the Opportunity to Disperse Value Creating Operations All Over the World

Autor:   •  October 31, 2016  •  Study Guide  •  1,569 Words (7 Pages)  •  911 Views

Page 1 of 7
  •  Chapter I
  • Globalization of manufacturing and markets: with advances in tech, we have the opportunity to disperse value creating operations all over the world
  • Markets: More global market place vs. only selling domestically
  • Manufacturing: supply of goods from around the world (leads to cheaper production facilities, specialization, higher quality)
  • Globalization is a result of:
  • Improvements in tech/transport: allows communication
  • Reductions of international barriers
  • Globalization debate:
  • Pros:
  • Lower production cost
  • Increase in consumer income
  • Creates jobs
  • Higher product quality
  • Economy is better off: countries produce goods that they are efficient at producing and import those they are not
  • Cons:
  • Jobs at home are being lost to countries with cheaper labour
  • This leads to decreased wages
  • Lax environmental and labour regulations
  • Loss of sovereignty

  •  Chapter II
  • Greenfield investments: establishment of a wholly new operation in a foreign market (vs. M&A)
  • Pros: More control over investment
  • Cons:
  • Slower
  • Riskier
  • Harder to enter market: no connections to distributors, suppliers,
  • Acquisition or merging with existing firm:
  • See above (opposite)
  • Also pro: firms believe they can increase efficiency of an acquired unit by transferring tech, capital, and management skills
  • FDI – Host
  • Pros:
  • Resource transfer effect (capital, tech, skills spillover)
  • Employment
  • Balance of payment: imports substituted with higher exports
  • Research and development occurs in host country
  • Cons
  • Competition negative effects: dumping
  • Negative balance of payment: earnings repatriated so higher number of imports through raw materials, resources
  • Loss of national sovereignty

  • FDI – Home:
  • Pros:
  • Gains in knowledge
  • Growth in capital and earnings
  • Positive employment effects
  • Cons
  • Initial capital outflow
  • Current account suffers if FDI is a substitute for exports
  • Export of jobs
  •  Chapter III
  • Political economy: political, economic, and legal systems
  • Shift towards market based economies:
  • Deregulation
  • Privatization
  • Legal systems
  • Regional economic integration: agreement between countries in a geographic region to reduce barriers to trade to the free flow of goods, services, labour, and capital
  • Free trade area: NAFTA (no trade barriers to G+S)
  • Customs union: ANDEAN (no trade barriers to G+S ; common external trade policy)
  • Common market: MERCOSUR (above + no trade barriers to K+L)
  • Economic union: EU (above + common currency and econ/monetary policy)
  • Political union: US (all of above + everything else)
  • Pros of EI:
  • Regional integration is easier than global integration
  • Added bonuses for countries involved
  • Political links between countries reduces chances of violence
  • Political stronger as a block against other nations
  • Allow firms to tap into previously protected markets
  • Allows firms to determine costs and benefits more accurately: fuller info on barriers, taxes, legal systems, etc.
  • Cons of EI:
  • Can result in loss of national sovereignty
  • Can be costly to establish and unsure as to winner and losers
  • Allow firms to tap into previously protected markets: increased competition can drive out domestic business
  • Could lead to increased price competition within blocks
  • Firms outside block risk getting shut out
  • May limit a firm within the block’s actions if the governing body intervenes…
  •  Chapter IV
  • Hofstede’s dimensions:
  • Collective vs. individualistic
  • Power distance
  • Uncertainty avoidance
  • Masculinity vs. femininity
  • Long term orientation
  • We are diverse and need to adapt products and services to different markets
  • Importance of global managers to develop cross cultural literacy
  •  Chapter V
  • International Business Strategies:
  • Global Standardization Strategy: standardized, low cost, global product
  • Transnational strategy: low-cost, differentiated products (e.g. IKEA)
  • Localization strategy: adapting products to each market
  • International strategy: little low cost and low local responsiveness pressures
  • Methods of entry:
  • Exporting: low cost, low risk, but can result in no profits due to barriers to entry
  • Turnkey Project: contractor handles building plant and training staff
  • Licensing: firm avoids barriers yet suffers from loss of control
  • Franchising: can be hard to control
  • Wholly owned subsidiary: firm has full control but more costs/risks
  • Greenfield investments
  • Acquisitions
  • Strategic alliances: cooperative agreements between potential or actual competitors
  • Can be beneficial through sharing of know-how, resources, contacts…
  • Can be detrimental to one firm if the other benefits far more  steals…
  •  Chapter VI
  • HRM strategies:
  • Ethnocentric: international
  • Polycentric: localization
  • Geocentric: global standardization strategy and transnational
  • Deciding where to operate internationally:
  • Country factors: PEST analysis, trade barriers, barriers to entry, etc.
  • Tech factors: type of tech used in manufacturing process
  • Level of fixed costs involved (high FC leads to establishing a single manufacturing center vs. multiple small ones)
  • Minimum efficient scale of output: larger means single factory
  • Flexibility of tech: when flexible tech is available use single factory (flexible tech = quick startup times, increased utilization through scheduling, improve quality control)
  • Product factors:
  • Value to weight ratio: high means transport costs are low (single plant)
  • Does the product serve international needs (if so, then single plant)
  •  Chapter I
  • Globalization of manufacturing and markets: with advances in tech, we have the opportunity to disperse value creating operations all over the world
  • Markets: More global market place vs. only selling domestically
  • Manufacturing: supply of goods from around the world (leads to cheaper production facilities, specialization, higher quality)
  • Globalization is a result of:
  • Improvements in tech/transport: allows communication
  • Reductions of international barriers
  • Globalization debate:

...

Download as:   txt (6.8 Kb)   pdf (95.6 Kb)   docx (11.9 Kb)  
Continue for 6 more pages »