MKT 360 CH 10-12
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This 6 page Study Guide was uploaded by Ella Shumilina on Sunday February 8, 2015. The Study Guide belongs to MKT 360 at a university taught by Prof. Ben L. Recarey in Fall. Since its upload, it has received 130 views.
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Date Created: 02/08/15
MKT 360 Spring 2014 IMPORTANT CONCEPTS 1 What are the 5 forms of economic integration in regional markets What are their characteristics KNOW the order and what s included in each one of them Each subsequent step includes the characteristics of the previous one something else 1 Regional Cooperation Groups Governments agree to particzpate jointly to develop basic industries bene cial to each economy European Coal and Steel Community When countries decide to cooperate in a particular kind of industry that they all share 2 Free Trade Area ee trade no tari fs among members but each member is ee to set its own external tari fs on imported products om outside the region NAFTA When countries decide to integrate by allowing free trade within the area 3 Customs Union ee trade among members the same areas om before plus a common external trade policy members have the same external tari fs on imported products om outside the region MERCOSUR 4 Common Market ee trade among members common external tari fs plus factor mobility O ree movement of goods persons services and capital among member nations EEC old European Economic Community or European Common Market 5 A Economic Union all of the above plus harmonization of economic policies EU 27 B Political Union all of the above plus harmonization of political policies EU 15 What are the 4 freedoms that are guaranteed by a common market Free movement of goods persons services capital among the member nations 2 How would you best classify NAFTA among these forms Free Trade Area 3 How best would you classify MERCOSUR and the ANDEAN PACT among these forms Mercosur Customs Union 4 How best would you classify the European Union among these forms It s neither political no constitution nor economical union it s a monetary union but it s not a scal union meaning that each country has its own Central Bank can give debt in euro 5 Who were the participants in the Lome Convention of 1975 and what did it allow 10 11 12 13 14 15 EU 71 ACP nations Lome Convention a preference program that was started by the European Common Market giving duty free entry to products from the former African Caribbean and Paci c ACP colonies ACP is now an economic group What countries participated in the Treaty of Paris What industries did the treaty regulate France West Germany Italy Belgium Netherlands Luxemburg European Coal and Steel Industries What treaty created the European Common Market The Treaty of Rome What branch of the European Union is responsible for administrating the union The European Commission What branch of the European Union represents the national governments and is supposed to argue for the national interests The Council of Ministers What is the function of the European Parliament What power does it have over the European Commission To represent the EU s citizens It has the power to force the Commission to resign as a body and to amend or reject the annual budget What branch of the European Union more closely resembles the Supreme Court The Court of Justice What is the name of the meeting of the heads of government of the member states of the European Union with the president of the European Commission The European Council What are the 3 sources of the revenue that is needed to run the European Union 1 Revenue from value out of taxes VAT 2 Import duties 3 Contributions as a percent of GNP What happened on the way to the implementation of the Europe 92 program Reunification of Germany in 1990 What treaty established the European Single Currency Maastricht Treaty 1991 16 How many countries were admitted on May 1998 to the European Single Currency Group Eurozone it s not EU it s those countries within the EU who use euro How many belong now May 1998 11 countries Belong now 18 countries How many countries just use the euro who aren t in the EU 24 countries 17 What condition must be met under the Stability and Growth Pact by the EU countries that have adopted the euro If they have a scal budget de cit the difference between what the government brings in in taxes and what they spend larger than 3 of GDP 18 How many new countries joined the EU on May of 2004 Not very important question 10 19 How many countries belong today to the European Union 28 countries Croatia was admitted last year to make it 28 1 Who are the Four Asian Tigers Hong Kong South Korea Singapore Taiwan 2 What could be considered the key to continued economic progress in Hong Kong In Taiwan Hong Kong their economic future depends on China s attitudes towards capitalism and political freedom Taiwan depends on relationship with China 3 What has been the average growth of China s GDP in the last 25 years Avg growth of GDP since 1978 25 years 9 4 What is the minimum growth of China s GDP targeted by their government Target minimum growth 7 5 What is the minimum discretionary income that economists believe is necessary in order to sustain a market economy in China a Discretionary income needed to sustain a market economy 5000 6 What kind of a business environment is India in present times India still presents a difficult business environment a Tariffs are well above those of developing world norms b Inadequate protection of intellectual property rights c Antibusiness attitudes of India s federal and state bureaucracies continue to hinder potential investors and plague their routine operations d Delay by policymakers on selling moneylosing SOEs making labor laws exible and deregulating banking e Widespread corruption and ingrained bribery 7 What are the keys to the success in transformation of the ASEAN members from cheaplabor countries to industrialized nations The Asean governments commitment to deregulation liberalization and privatization of their economies The decision to shift their economies from commodity based on manufacturing based The decision to specialize in manufacturing components in which they have a comparative advantage Japan s emergence as a major provider of technology and capital 1 How do Global companies differ from International companies Global Companies International Comp Market the world individual country Look for similarities needs differences needs Mkt Strategy standardization adaptation Satisfaction goal lowest commdenom all needswants Satisfaction level low high Pricing low high Costs low econ of scale high mfginvmkt Image global local Advantages integration customization of operations optimization of the value chain 2 What are the benefits of a Global orientation Integration of operations and optimization of the value chain 3 What is direct exporting What is indirect exporting Direct exporting the company sells to a customer in another country Indirect exporting the company sells to a buyer in the hometown who in turn exports the product 4 What are 2 advantages of exporting as a market entry strategy What is a major disadvantage Advantages Simplicity Minimum financial risk Disadvantage Minimum marketing control 5 What is licensing What is the difference between a licensor and a licensee 10 11 A contractual agreement whereby one company the licensor makes an asset available to another company the licensee in exchange for royalties license fees or some other form of compensation What are some of the types of assets that can be licensed Patent trade secret or company name What are 2 advantages and 2 disadvantages of licensing to the licensor Advantages Little initial investment required Attractive return for the life of the contractor Disadvantages Limited form of participating in foreign market Licensees can turn into competitors in time What is the difference between a license and a franchise Franchising is a form of licensing where the franchisor provides a standard package of products systems and management services And the franchisee provides market knowledge capital and personal involvement in management What is a joint venture What are its advantages and disadvantages Joint venture a partnership of two or more participating companies that have joined forces to create a separate legal entity Advantages Shared risk Combined strengths of partners Open doors to counties that favor local companies or prohibit foreign control Avoid tariff and quota barriers Disadvantages Differences in culture and management philosophies can lead to disagreements among partners and to divorce Control and coordination of the venture can be very costly for the foreign partner Local partners can evolve into strong competitors What are consortia How do they differ from joint ventures Consortia special kind of joint venture Similar to joint venture except They typically involve a large number of participants and The frequently operate in a country or market in which none of the participants is currently active What are the advantages and disadvantages of Foreign Direct Investment Advantages Greater control avoid communication and con ict of interest problems of partnership Higher profits Technology transfer Access to market avoidance of tariff or quota barriers faster expansion in the market Very fast entry in the case of an acquisition Disadvantages Acquisitions need to be integrated into the worldwide organization Expensive Requires major commitment of managerial time and energy Longterm may clash with shortterm profitability goals 12 How does a Strategic Alliance differ from a joint venture Strategic Alliance is an agreement to cooperate and it does not create a third entity like joint venture does What are some common problems in Strategic Alliances Partners have different dreams Imbalance between partners Differences in management philosophy Not enough people allocated to the alliance
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