MAN 470 – Berk TUNCALI
 National borders are no longer defensible against
the invasion of knowledge, ideas, and financial
-Walter Wriston
 The new electronic interdependence recreates the
world in the image of a global village.
-Marshall McLuhan
Why Go Global?
 Offset sales declines in the domestic market.
 Increase sales and profits.
 Extend your products’ life cycle.
 Lower manufacturing costs.
 Lower the cost of their products.
 Improve competitive position and enhance
 Raise quality levels.
 Become more customer-oriented.
Why Go Global? (cont’d)
Before venturing into the global marketplace,
entrepreneurs should ask themselves six questions:
Is there a profitable market in which our firm has the
potential to be successful over the long run?
Do we have and are willing to commit adequate
resources of time, people, and capital to global
Are we considering going global for the right reasons?
Do we understand the cultural differences, history,
economics, value systems, opportunities, and risks of
conducting business in the country (or countries) we are
Is there a viable exit strategy for our company if
conditions change or the new venture is not successful?
Can we afford not to go global?
Strategies for Going Global
 Creating a presence on the web (fcbk, ebay, amazon)
 Trade intermediaries
 Export management companies
 Export trading companies
 Manufacturer’s export agents
 Export merchants
 Foreign distributors
 The value of using trade intermediaries
 Joint ventures (temporary partnership) eg. MillerCoors, SonyEricsson,
Strategies for Going Global (cont’d)
International franchising eg. Mcdonalds with teriyaki burgers or
vegetarian mcnuggets, Domino’s Pizza with different topics
Identify the county or countries that are best suited to
the franchiser’s business concept.
Generate leads for potential franchisees.
Select quality candidates.
Structure the franchise deal.
Countertrading and bartering
Countertrading: company selling goods in a foreign country agrees to
promote investment and trade in that country.
Bartering: exchange of goods and services for other goods and services.
Foreign licensing
Strategies for Going Global (cont’d)
 Exporting
 Step 1: recognize that even the tiniest companies and
least experienced entrepreneurs have the potential to
Step 2: analyze your product or service.
Step 3: analyze your commitment.
Step 4: research markets and pick your target.
Step 5: develop a distribution strategy.
Step 6: find your customer.
Step 7: find financing.
Step 8: ship your goods.
Step 9: collect your money.
Strategies for Going Global (cont’d)
Establishing international locations
Importing and outsourcing (call centers in İndia)
Entrepreneurs who are considering importing goods and service or
outsourcing their manufacturing to foreign countries should
follow these steps:
Make sure that importing or outsourcing is right for your
Establish your target cost for your product.
Do your research before you leave home.
4. Be sensitive to cultural differences.
Do your groundwork.
6. Protect your company’s intellectual property.
Select a manufacturer.
8. Provide an exact model of the product you want manufactured.
9. Stay in constant contact with the manufacturer and try to build
a long-term relationship.
Barriers to International Trade
 Domestic barriers eg. information and financing
 International barriers
 Tariff barriers (tax on exports to keep under control)
 Nontariff barriers eg. rules of origin, packaging conditions, labelling
 Quotas (limitation on export/import)
 Embargoes (prohibition of commerce from a particular country)
 Dumping (Predatory pricing) Exporting at a price lower than the sale
price at home market
 Political barriers eg. Petrol dispute between Iran and EU
 Business barriers eg. Labour quality, worker unions and strikes
 Cultural barriers eg. Bicycle preferrance in China Producers of
1/3 of the worlds bicycle. or Many vegetarians in India (steakhouse)
National Trade Agreements
 The world trade organization (WTO)
formed to reduce tariffs among member nations. The
members account for over 97% of all world trade.
Among NAFTA’s provisions are:
 Tariff reductions
 Elimination of nontariff barriers
 Simplified border processing
 Tougher health and safety standards
Although there are no sure-fire rules for going global,
small businesses that want to become successful
international competitors should observe these
 Make yourself at home in all three of the world’s key
markets: North America, Europe, and Asia.
 Appeal to the similarities within the various regions in
which you operate but recognize the differences in
their specific cultures.
 Develop new products for the world market.
 Familiarize yourself with foreign customs and
languages; constantly scan, clip, and build a file on
other cultures: their lifestyles, values, customs, and
business practices.
Conclusion (cont’d)
 Learn to understand your customers from the perspective of
their culture, not your own.
“Glocalize.” Make global decisions about products, markets, and
management but allow local employees to make tactical
decisions about packaging, advertising, and service.
Recruit and retain multicultural workers who can give your
company meaningful insight into the intricacies of global
Train employees to think globally, send them on international
trips, and equip them with state-of-the-art communications
Hire local managers to staff foreign offices and branches.
Do whatever seems best wherever it seems best, even if people
at home lose jobs of responsibilities.
Consider using partners and joint ventures to break into foreign
markets you cannot penetrate on your own.

CHAPTER 4 Forms of Business Ownership and Franchising