Management Essay

1003 Words Oct 26th, 2013 5 Pages
International Management
In the 1980s, the world's leading industrialized nations began an era of cooperation in which they capitalized on the benefits of working together to improve their individual economies. They continued to seek individual comparative advantages, i.e., a nation's ability to produce some products more cheaply or better than it can others, but within the confines of international cooperation. In the 1990s these trends continued, and in many cases accelerated. Countries negotiated trade pacts such as the North American Free Trade Agreement (NAFTA), and the General Agreement on Tariffs and Trade (GATT), or formed economic communities such as the European Union. These pacts and communities created new marketing
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The differences among these options are sometimes subtle in nature. For instance, an export firm is one that sells its domestically made products to a very small number of countries. In contrast, import firms import foreign-made goods into the country for domestic use. Often, export and import firms are operated by a small group of people who have close ties with the countries in which they do business. Some such firms may begin as export or import specialists, but eventually expand their operations to production of goods overseas. IBM and Coca-Cola Co. exemplify companies that have used that approach. Independent agents are businesspeople who contract with foreign residents or businesses to represent the exporting firm's product in another country. Closely related are firms with licensing agreements, in which domestic firms grant foreign individuals or companies the right to manufacture and/or market the ex-porter's product in that country in return for royalties on sales. Another variation is a franchising arrangement, in which the parent company grants a franchise upon payment of a franchise fee by a local business operator, who then agrees to follow a prescribed methodology and marketing plan using the company's name. The local franchisee may have to pay royalties or annual franchise fees, but otherwise remains independent of the franchisor. In each of these models, assuming the partner in the target

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