tailieunhanh - Lecture International marketing (15/e): Chapter 6 - Philip R. Cateora, Mary C. Gilly, John L. Graham

Chapter 6 - The political environment: A critical concern. What you should learn from chapter 6: What the sovereignty of nations means and how it can affect the stability of government policies; how different governmental types, political parties, nationalism, targeted fear/animosity, and trade disputes can affect the environment for marketing in foreign countries; the political risks of global business and the factors that affect stability;. | International Marketing 15th edition Philip R. Cateora, Mary C. Gilly, and John L. Graham Stability of Government Policies Five main political causes of international market instability Some forms of government seem to be inherently unstable Changes in political parties during elections can have major effects on trade conditions Nationalism Animosity targeted toward specific countries Trade disputes themselves Roy Philip Political Risks of Global Business Confiscation – the seizing of a company’s assets without payment Expropriation – where the government seizes an investment but makes some reimbursement for the assets Domestication – when host countries gradually cause the transfer of foreign investments to national control and ownership through a series of government decrees Mandating local ownership Greater national involvement in a company’s management An example of domestication is given on the next slide Roy Philip Domestication - Example A good example of domestication can be seen in the nationalization of Air-India (formerly called as Tata Airlines). Tata owned and operated Air-India and Indian Airlines until they were nationalized by the Indian Government, much to Tata’s chagrin. Very recently, the Indian government has asked Mr. Ratan Tata, chairman of the Tata group, to head an advisory panel to revive Air India. Roy Philip Economic Risks (1 of 2) Exchange controls Stem from shortages of foreign exchange held by a country Local-content laws Countries often require a portion of any product sold within the country to have local content Import restrictions Selective restrictions on the import of raw materials to force foreign industry to purchase more supplies within the host country and thereby create markets for local industry Roy Philip Economic Risks (2 of 2) Tax controls A political risk when used as a means of controlling foreign investments Price | International Marketing 15th edition Philip R. Cateora, Mary C. Gilly, and John L. Graham Stability of Government Policies Five main political causes of international market instability Some forms of government seem to be inherently unstable Changes in political parties during elections can have major effects on trade conditions Nationalism Animosity targeted toward specific countries Trade disputes themselves Roy Philip Political Risks of Global Business Confiscation – the seizing of a company’s assets without payment Expropriation – where the government seizes an investment but makes some reimbursement for the assets Domestication – when host countries gradually cause the transfer of foreign investments to national control and ownership through a series of government decrees Mandating local ownership Greater national involvement in a company’s management An example of domestication is given on the next slide Roy Philip Domestication - Example A good example of