Transcript scarb eesbm6e ppt 15

CHAPTER
Global Aspects of
Entrepreneurship
Copyright
© 2011Pearson Education, Inc. Publishing as Prentice Hall
15
Why “Go Global?”
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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
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Nine Strategies for Going Global
Creating a Web Site
Relying on Trade Intermediaries
Establishing International
Locations
Importing &
Outsourcing
Creating Joint Ventures
Exporting
Foreign Licensing
Countertrading & Bartering
International Franchising
FIGURE 15.1
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Strategies For “Going Global”
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Create a presence on the Web
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Asia
41.2%
Ch. 15: The Global Aspects of Entrepreneurship
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The Web’s Global Reach
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Available 24 hours a day to anyone
anywhere in the world.
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1.60 billion Web users worldwide
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220 million in U.S.
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Nearly 1.4 billion in other countries
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Customers who live outside the U.S.
account for more than 50% of all online
sales by U.S. companies
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54% of eBay transactions take place
outside the U.S.
Ch. 15: The Global Aspects of Entrepreneurship
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Strategies For “Going Global”
(continued)
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Create a presence on the Web
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Rely on trade intermediaries
Ch. 15: The Global Aspects of Entrepreneurship
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Trade Intermediaries
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Domestic agencies that serve as
distributors in foreign countries for
companies of all sizes.
Types of intermediaries:
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Export Management Companies (EMCs)
Export Trading Companies (ETCs)
Manufacturer’s Export Agents (MEAs)
Export merchants
Resident buying offices
Foreign distributors
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Strategies For “Going Global”
(continued)
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Create a presence on the Web
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Rely on trade intermediaries
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Form joint ventures
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Joint Ventures
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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.
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Strategies For “Going Global”
(continued)
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Create a presence on the Web
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Rely on trade intermediaries
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Form joint ventures
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Engage in foreign licensing
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Consider international franchising
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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International Franchising
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To expand internationally, franchisers
should:
1. Identify the country or countries that are best
suited to the franchiser’s business concept.
2. Generate leads for potential franchisees.
3. Select quality candidates.
4. Structure the franchise deal.
 Direct franchising
 Area development
 Master franchising
Ch. 15: The Global Aspects of Entrepreneurship
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Ch. 6: Franchising and the Entrepreneur
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Strategies For “Going Global”
(continued)
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Create a presence on the Web
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Rely on trade intermediaries
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Form joint ventures
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Engage in foreign licensing
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Consider international franchising
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Use countertrading and bartering
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Export
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Exporting
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Small business accounts for 90.7% of all
companies involved in exporting, but they
generate just 21% of the dollar
value of the nation’s exports.
Significant impact: Small companies
generate $1.1 billion each day in export
sales!
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Ch. 15: The Global Aspects of Entrepreneurship
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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.
Ch. 15: The Global Aspects of Entrepreneurship
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FIGURE 15.4
Small Business Exports:
Number of Countries to Which Small Companies Export
Ch. 15: The Global Aspects of Entrepreneurship
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Steps to Successful Exporting
(continued)
5. Develop a distribution strategy.
6. Find your customer.
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U.S. Department of Commerce
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International Trade Administration
7. Find financing for export sales.
8. Ship your goods.
9. Collect your money.
Ch. 15: The Global Aspects of Entrepreneurship
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FIGURE 15.5
How a Letter of Credit Works
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
Strategies For “Going Global”
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Establish a presence on the Web
Rely on trade intermediaries
Form joint ventures
Engage in foreign licensing
Consider international franchising
Use countertrading and bartering
Export
Establish international locations
Use importing and outsourcing
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Steps to Successful
Importing or Outsourcing
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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.
Ch. 15: The Global Aspects of Entrepreneurship
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Steps to Successful
Importing or Outsourcing
(continued)
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Protect your company’s intellectual
property.
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Select a manufacturer.
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Provide an exact model of the product
you want manufactured.
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Stay in constant contact with
the manufacturer and try to
build a long-term relationship.
Ch. 15: The Global Aspects of Entrepreneurship
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Barriers To International Trade
Domestic Barriers
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Government imposed barriers.
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Attitude: “My company is too small
to export.”
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Lack of information about
how to get started.
Ch. 15: The Global Aspects of Entrepreneurship
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Barriers To International Trade
International Barriers
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Tariff – A tax a government imposes on
goods and services imported into that
country.
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Nontariff barriers – Governments that
protect domestic industries
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Quotas - Limits on the amount of a
product imported into a country.
Ch. 15: The Global Aspects of Entrepreneurship
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Barriers To International Trade
(continued)
International Barriers
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Embargo - Total ban on imports of
certain products.
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Dumping - Selling large quantities of a
product in a foreign country below cost
to gain market share.
Ch. 15: The Global Aspects of Entrepreneurship
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Barriers To International Trade
(continued)
International Barriers
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Political barriers - Rules, regulations and
political risks.
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Business barriers – Different cost
structures and business practices.
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Cultural barriers - Differing languages,
philosophies, traditions,
and accepted practices.
Ch. 15: The Global Aspects of Entrepreneurship
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International Trade
Agreements
Major Agreements:
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World Trade Organization (WTO)
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North American Free Trade
Agreement (NAFTA)
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Dominican Republic - Central
America Free Trade Agreement
(CAFTA-DR)
Ch. 15: The Global Aspects of Entrepreneurship
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Guidelines For Success In
International Markets
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Take time to learn before jumping in.
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Seek out assistance from professionals.
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Make yourself at home in all three of the world’s
key markets - North America, Europe, and Asia.
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Appeal to the similarities in the various regions
and recognize the differences in local cultures.
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Develop new products for the world market.
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Learn foreign customs and languages.
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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Guidelines For Success In
International Markets
(continued)
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“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.
Ch. 15: The Global Aspects of Entrepreneurship
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© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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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
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Ch. 15: The Global Aspects of Entrepreneurship
Copyright
© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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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.
Ch. 15: The Global Aspects of Entrepreneurship
Copyright
© 2011 Pearson Education, Inc. Publishing as Prentice Hall
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