Global Aspects of

ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E
Chapter 15: Global Aspects of Entrepreneurship
CHAPTER
Why Go Global?
15
In addition to the text
Global Aspects of
Entrepreneurship
Copyright
2011Pearson Education, Inc. Publishing as Prentice Hall
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
Copyright
2011 Pearson Education, Inc. Publishing as Prentice Hall
15 - 2
Nine Strategies for Going Global
Strategies For Going Global

Creating a Web Site
Relying on Trade Intermediaries
Establishing International
Locations
Create a presence on the Web
Importing &
Outsourcing
Creating Joint Ventures
Exporting
Foreign Licensing
Countertrading & Bartering
International Franchising
FIGURE 15.1
Copyright
15 - 3
Copyright
15 - 4
The Webs Global Reach
Available 24 hours a day to anyone

anywhere in the world.
1.60 billion Web users worldwide
Asia
41.2%
Copyright
15 - 5
220 million in U.S.
Nearly 1.4 billion in other countries
Customers who live outside the U.S.

account for more than 50% of all online
sales by U.S. companies
54% of eBay transactions take place

outside the U.S.
Copyright
15 - 6

Trade Intermediaries

(continued)
Rely on trade intermediaries
Domestic agencies that serve as

distributors in foreign countries for
companies of all sizes.
Types of intermediaries:
Copyright
15 - 7
Export Management Companies (EMCs)

Export Trading Companies (ETCs)
Manufacturers Export Agents (MEAs)
Export merchants
Resident buying offices
Foreign distributors
Copyright
15 - 8
Joint Ventures

(continued)
Form joint ventures
Copyright
15 - 9
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.
Copyright
15 - 10
International Franchising

(continued)
To expand internationally, franchisers

should:
1. Identify the country or countries that are best
Form joint ventures
2. Generate leads for potential franchisees.
Engage in foreign licensing
Consider international franchising
suited to the franchisers business concept.

3. Select quality candidates.
4. Structure the franchise deal.
Copyright
15 - 11
Direct franchising
Area development
Master franchising
Copyright
15 - 12


(continued)
Copyright
Ch. 6: Franchising and the Entrepreneur
15 - 13
Form joint ventures
Use countertrading and bartering
Export
Copyright
15 - 14
2. Analyze your product or service.

3. Analyze your commitment to developing
export markets.
Significant impact: Small companies

generate $1.1 billion each day in export
sales!
1. Recognize that even the tiniest companies

and least experienced entrepreneurs have
the potential to export.
Small business accounts for 90.7% of all

companies involved in exporting, but they
generate just 21% of the dollar
value of the nations exports.
Copyright
Steps to Successful Exporting
Exporting
4. Research potential markets and pick your

target.
15 - 15
Copyright
15 - 16
Steps to Successful Exporting

(continued)
5. Develop a distribution strategy.

6. Find your customer.
U.S. Department of Commerce
International Trade Administration
7. Find financing for export sales.

8. Ship your goods.
9. Collect your money.
FIGURE 15.4
Small Business Exports:

Number of Countries to Which Small Companies Export
Copyright
15 - 17
Copyright
15 - 18

FIGURE 15.5
Establish a presence on the Web

Form joint ventures
Use countertrading and bartering
Export
Establish international locations
Use importing and outsourcing
How a Letter of Credit Works
Copyright
Steps to Successful
Importing or Outsourcing
Copyright
15 - 20
Steps to Successful
Importing or Outsourcing
(continued)
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.
Copyright
15 - 21
Barriers To International Trade
Protect your companys intellectual

property.
Select a manufacturer.
Provide an exact model of the product

you want manufactured.
Stay in constant contact with

the manufacturer and try to
build a long-term relationship.
Copyright
15 - 22

International Barriers
Domestic Barriers
Government imposed barriers.
Attitude: My company is too small

to export.
Lack of information about

how to get started.
Copyright
15 - 23
Tariff A tax a government imposes on

goods and services imported into that
country.
Nontariff barriers Governments that

protect domestic industries
Quotas - Limits on the amount of a

product imported into a country.
Copyright
15 - 24

(continued)
(continued)
Embargo - Total ban on imports of

certain products.
Dumping - Selling large quantities of a

product in a foreign country below cost
to gain market share.
Copyright
15 - 25
Political barriers - Rules, regulations and

political risks.
Business barriers Different cost

structures and business practices.
Cultural barriers - Differing languages,

philosophies, traditions,
and accepted practices.
Major Agreements:
World Trade Organization (WTO)
North American Free Trade

Agreement (NAFTA)
Dominican Republic - Central

America Free Trade Agreement
(CAFTA-DR)
Copyright
15 - 27
Take time to learn before jumping in.
Seek out assistance from professionals.
Make yourself at home in all three of the worlds

key markets - North America, Europe, and Asia.
Appeal to the similarities in the various regions

and recognize the differences in local cultures.
Develop new products for the world market.
Learn foreign customs and languages.
Guidelines For Success In

International Markets
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.
Copyright
15 - 26
Copyright
15 - 28
Conclusion
(continued)
Guidelines For Success In

International Markets
International Trade
Agreements
Copyright
15 - 29
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
Copyright
15 - 30

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.
Copyright
15 - 31

Global Aspects of

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Global Aspects of

Uploaded by

Copyright:

Available Formats

ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

Chapter 15: Global Aspects of Entrepreneurship

In addition to the text

2011Pearson Education, Inc. Publishing as Prentice Hall

Offset sales declines in the domestic market

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

Nine Strategies for Going Global

Strategies For Going Global

Create a presence on the Web

Countertrading & Bartering

2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

The Webs Global Reach

Available 24 hours a day to anyone

1.60 billion Web users worldwide

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

220 million in U.S.

Nearly 1.4 billion in other countries

Customers who live outside the U.S.

54% of eBay transactions take place

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

Strategies For Going Global

Create a presence on the Web

Rely on trade intermediaries

Domestic agencies that serve as

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

Export Management Companies (EMCs)

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

Strategies For Going Global

Create a presence on the Web

Rely on trade intermediaries

Form joint ventures

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

Domestic joint venture two or more U.S.

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

Strategies For Going Global

To expand internationally, franchisers

Create a presence on the Web

Rely on trade intermediaries

1. Identify the country or countries that are best

Form joint ventures

2. Generate leads for potential franchisees.

Engage in foreign licensing

Consider international franchising

suited to the franchisers business concept.

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch. 15: The Global Aspects of Entrepreneurship

2011 Pearson Education, Inc. Publishing as Prentice Hall

ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

Strategies For Going Global

Ch. 6: Franchising and the Entrepreneur

2011 Pearson Education, Inc. Publishing as Prentice Hall

Rely on trade intermediaries