Chapter 2, Problem 2BIC

Which of the following is an example of managing economic exposure by flexible sourcing policy?  An American company sells its products in Brazil and Portugal. Reduced sales in Brazil due to the dollar appreciation against the “real” can be compensated by increased sales in Portugal due to the dollar depreciation against the euro. If yen is strong, it is preferable for a Japanese company to open a manufacturing subsidiary in the U.S. to produce and sell its products there. An American IT company hires software developers in Ukraine because of the weak position of grivna against dollar. A Canadian company spends a lot of money for research & development activities to improve its reputation and gain more customers.

. What is globalization? What modes of international business are used by firms that want to globalize? Briefly describe each method.   1. What is the difference between a monochronic and a polychronic culture? How do such cultural differences affect business practices for international firms?   2. What is gross national income? How is it calculated? Illustrate your answer with a specific example.   1. What are the disadvantages of import restrictions in regard to creating domestic employment opportunities?   2. What is value chain configuration? Briefly list and discuss the factors that influence value chain configuration.   1. What is the relationship between a company's international market and its production location decisions? How do firms benefit from the use of scanning techniques when making location decisions?   2. Explain how franchising agreements differ from licensing agreements.   1. Compare push and pull promotional strategies in the context of international business.…

Businesspeople need to understand international culture and corporate practices to successfully transfer their business activities to foreign countries. Compare and contrast US culture and corporate practices with India’s and identify challenges as a result for a US based company to operate its activities in India. Identify at least three risks associated with doing transactions by the US based company operating in India and what can be done to mitigate such risks. Note that operations are in India but majority of the products are sold in US. Include tangible examples for better clarity. Include currency exchange risk among those mentioned above, and explain ways to mitigate this risk. Explain in detail.