...CHAPTER 1 GLOBALIZATION AND THE MULTINATIONAL FIRM SUGGESTED ANSWERS TO END-OF-CHAPTER QUESTIONS QUESTIONS 1. Why is it important to study international financial management? Answer: We are now living in a world where all the major economic functions, i.e., consumption, production, and investment, are highly globalized. It is thus essential for financial managers to fully understand vital international dimensions of financial management. This global shift is in marked contrast to a situation that existed when the authors of this book were learning finance some twenty years ago. At that time, most professors customarily (and safely, to some extent) ignored international aspects of finance. This mode of operation has become untenable since then. 2. How is international financial management different from domestic financial management? Answer: There are three major dimensions that set apart international finance from domestic finance. They are: 1. foreign exchange and political risks, 2. market imperfections, and 3. expanded opportunity set. 3. Discuss the three major trends that have prevailed in international business during the last two decades. Answer: The 1980s brought a rapid integration of international capital and financial markets. Impetus for globalized financial markets initially came from the governments of major countries that had begun to deregulate their foreign exchange and capital markets. The economic integration and globalization that began in the eighties...
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...Globalisation NIKE – just do it Introduction Nike, Inc. is an incorporated company that designs, develops and markets worldwide athletic footwear, apparel, equipment and accessories. Nike is the biggest seller of athletic footwear and athletic apparel in the world and creates designs for men, women and children. Nike employs both traditional and non-traditional distribution channels in almost 200 countries with primary market regions in the United States, Europe, Asia Pacific, and the Americas. Nike has some 20,000 retailers worldwide including Nike factory stores, Nike stores, Nike Towns, Cole Haan stores and Web sites which sell Nike's sports and leisure products. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding, and subsidiaries including Cole Haan, Hurley International and Converse. Nike accounts for 33% of the global market share in the athletic footwear industry. Nike sponsors many high profile athletes and sports teams around the world with the highly recognized trademarks of Just do it (www.nike.co.uk). GLOBALISATION: Globalisation is defined as the micro- phenomenon where there are a free flow of capital efficiency, technology and other factors of production which promote world welfare in its strides. (Nande and Dias, 2007.,p.2) KEY DRIVERS OF GLOBLISATION: there are three main factors which motivate the globalisation of markets and production which are explained as under: Falling barriers to trade and investment:...
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...Hill 7e End of Part Case Notes Part One: Globalization There are no Part One cases. Part Two: National Differences in Political Economy; Differences in Culture; Ethics in International Business Nike: The Sweatshop Debate 1. Should Nike be held responsible for working conditions in foreign factories that it does not own, but where subcontractors make products for Nike? Answer: Most students will probably agree that Nike should be held responsible for the working conditions in foreign factories where subcontractors make products the company sells. Students taking this perspective are likely to argue that since the workers are there to produce the products for Nike, the fact that the company does not actually own the facilities is immaterial – Nike is the beneficiary of the work done in the factory. Some students may suggest that Nike be resolved of some responsibility if the factories also produce products for other companies. 2. What labor standards regarding safety, working conditions, overtime, and the like, should Nike hold foreign factories to: those prevailing in that country or those prevailing in the United States? Answer: The question of whether of whether to hold foreign factories to the same standards as domestic factories is difficult. Some students might argue that Nike should require all factories regardless of their location to maintain the same standards when it comes to working conditions, overtime, and so on. Other students however, may suggest that...
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...their quest to do busy with Moscow, they made promises to millions of potential customers to deliver the best of the diamond world. Now because of the many issues with U.S. sanctions, Tiffany & Co is caught up in an economic war zone as sanctions continue to put financial pressure on Russian pipelines. "It’s just a really, really big country, and because of that it’s been pretty underserved," says Charles Whiteman, senior vice president of client services of Motion Point. This is how several major corporations like Apple, Nike and Mattel feel about conducting business in Russia. Many of Standard & Poor’s top stock businesses have talked about the enormous nation and the financial implications of doing commerce there. Nike has gushed about Russia for months, noting that business there has been sprinting along at a double-digit clip. “ "We are still the sports brand of choice in Russia and in Eastern Europe," Trevor Edwards, president of the Nike brand, said in December. According to some enterprises mentioned in the article, "Russia is a top five market behind Canada, Australia and the United Kingdom." Yet despite the monetary opportunities available to the conglomerates, the U.S. sanctions have made it difficult to pay for the products offered by the businesses. Certain sanctions imposed by the U.S. have caused large processing corporations like...
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...you have identified. 1. INTRODUCTION Globalisation is a word that is frequently being used by everyone, from politicians to businessmen and is often referred to closely united economies worldwide, with products, people and money moving easily; in greater volume and value throughout the world. It can be defined as “the process of transformation of local phenomena into global ones. It can be described as the process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, sociocultural and political forces.” (Wall, Minocha and Rees, 2010, pg 14) Under the economist’s view point, globalisation focuses on: - • Growth of international trade • Increase in international capital flows • The developing control of multi-national company’s (MNCs) into the domestic and global markets Globalisation is not new, but is “a product of the industrial revolution. Britain grew rich in the 19th century as the first global economic superpower,” (BBC, 2011) due to its greater manufacturing technology and improved global communications such as steamships and railroads. However the possibility speed and scale of globalisation has accelerated radically since World War II, and especially in the last 25 years; having a major impact on companies around the world. Hill (2006, pg 13) demonstrates the existences of globalisation with an example of “An American driving a car, designed and produced in...
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...Wladimir Andreff. Outsourcing in the new strategy of multinational companies:foreign investment, international subcontracting and production relocation. OUTSOURCING IN THE NEW STRATEGY OF MULTINATIONAL COMPANIES: FOREIGN INVESTMENT, INTERNATIONAL SUBCONTRACTING AND PRODUCTION RELOCATION* WLADIMIR ANDREFF Professor Emeritus University Paris 1 Panthon Sorbonne Centre d’Economie de la Sorbonne. ABSTRACT. The article is dealing in the first place with the definition of (offshore) outsourcing in relation with foreign direct investment and international subcontracting process, as well as with some connected issues such as fragmentation of the production process, international production relocation, de-industrialisation in developed countries and industrialisation in newly industrialising, now coined emerging countries. In the second place, it aims at finding how global strategy differentiates from traditional MNC strategies and how much outsourcing fits with such global strategy. The last section of the article briefly screens the economic impact of outsourcing on the world trade structure – with the two enlightening snapshots of global trade in sports goods and European Union 15’s outward processing trade with Central Eastern European countries (CEECs)-, as well as on home developed and host emerging countries. The article conclusion is that outsourcing has grown faster than world trade in the past two decades and has skyrocketed during the very last years because it is a cornerstone...
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...ase Study: Nike, Inc. International Business and Trade Unit II (Prof. Sosland) Vera Tillmanns 1. Company Ethics: Nike Inc. in Cooperation with its suppliers Many global companies like Nike, Inc. are seen as role models both in the market place as well as in society in large. That is why they are expected to act responsibly in their dealings with humanity and the natural world. Nike benefits from the global sourcing opportunities, therefore areas such as production and logistics have been outsourced to partner companies in low-wage countries like China, Vietnam, Indonesia and Thailand. As a result the company is limited nowadays to its core competencies of Design and Marketing. Nike does not merely sell products these days. They spend billions of dollars for advertising contracts with famous athletes like Tiger Woods to increase the value of the brand by associating the factor of lifestyle to their products. The company's image has been damaged many times by press releases as well as a variety of NGOs who have long pointed out the inhumane working conditions in the production facilities of sporting goods manufacturers. This leads to the question whether should Nike orientate the regulations of the suppliers to the labor standards in their respective countries or those in the United States? The labor conditions are so inhumane that Nike at least should try to converse to the US standard to improve the situation. The following analysis of an abstract of Nikes’ Responsibility...
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...Assignment Hassan Gulzar B-13733 Supply Chain Process of Nike To, Sir Imran Hussain Nike’s supply chain, and its emphasis on sustainability – along with its aim to cut emissions – has been well-reported. But it goes far deeper than merely calculating the carbon cost and asking its transport providers to try to cut emissions. No, this is a company well ahead of the curve in sustainability. And there’s a lot other companies can learn from it. If its vision of the future comes to pass, then logistics providers seriously need to take note. It could change everything. Company Overview NIKE, the world's biggest shoe company, has a reputation for fancy footwork, especially in the arena of marketing. With both Forrest Gump and Michael Jordan sporting NIKE's athletic shoes, NIKE's appeal is wide ranging. The shoe giant still holds nearly 37% of the US market, a giant lead over #2 Reebok, which has 20.5%, and #3 Fila, with only 5.1%. NIKE - a powerhouse in the world of sports, the designer and international marketer of athletic shoes, casual footwear, apparel, and accessories - is looking for new growth opportunities. Founders: Bill Bowerman and Phil Knight. First year-sales totaled $ 8,000 (1962). Employees: NIKE employs approximately 26,000 people worldwide with 650,000 workers are employed in Nike contact factories around the world. Revenue FY05: $ 13.7 billion ( 12% increase from FY04) Manufacturing: Nike brand had 137 factories in Americas (including US), 104 in EMEA...
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...Industry defined: Outsourced manufacturers of athletic footwear for leading global market players. Brief background on athletic footwear industry: The industry is dominated by a few large firms accounting for around 80% of the market share in which Nike is the clear market leader. Majority of other smaller players account for less than 5 % market share individually. The firms fight for market share through non-price competition, on strategies such as strengthening brand image, developing product innovation and identity, and expansion of Customer loyalty. The success of each firm is greatly dependent on its marketing campaign with the requirement of substantial investment in marketing strategy. Real household disposable income is an important demand factor for footwear. The leading firms manufacture most of the products from overseas contracted suppliers owing to cheaper costs. Nike, itself, manufactures all of its footwear from outside United States. This is a mature industry. Risk Analysis: Following characteristics are present in the industry of contract athletic footwear manufacturers for leading global firms, in which PTSI operates in: 1. Rivalry among existing firms: High This is a mature industry with high entry level barriers. It is driven mostly by non-price competition, product differentiation capability, quality control and cost efficiency. There is relentless pressure to reduce fixed costs. This increases rivalry when firms pass on manufacturing savings...
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...International Marketing | PM 305 | | | OLANREWAJU OLABODE | I.D NUMBER 33344 | 3/19/2016 | | TABLE OF CONTENTS 1.0 Introduction............................................................................................................. ......3 2.0 Situational Analysis................................................................................................. ..4-7 3.0 Swot and Tow matrix................................................................................................ 7-10 4.0 Market Selection......................................................................................................... .11 5.0 Recommended Markets and Market entre Strategies............................................11-12 6.0 Marketing Strategies........................................................
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...ABOUT MAS HOLDINGS Strategic Partnerships Partnering up with renowned brands from across the globe has enabled us to offer fully-integrated world class solutions to our clientele. Our alliances are based on mutual understanding and trust, sharing the same principles in business ethics with our partners, an attribute that has proven to be a strong competitive advantage for MAS over the years. Our joint venture partners include: | MAST Industries, Inc., USA | | Triumph International Overseas Limited, HK | | Speedo International Limited, UK | | Stretchline (UK) Limited, UK | | Ets Lucien Noyon Et Cie, France | | Prym Intimates Group Ltd, HK | | Brandot International Limited, USA | | Labyrinth Solutions Holdings, USA | | Tradecard, Inc., USA | | NSL Infratech (Private) Limited, India | MAS Intimates Offering customers highly differentiated intimate wear, flawless designs blended with exquisite quality, this is where perfection is revealed in every intricate detail. Drawing from 25 years of experience in lingerie manufacturing, MAS Intimates offer niche market intimate wear of unparalleled quality. With 12 world class manufacturing facilities in operation across Sri Lanka, India, Bangladesh & Indonesia, together with design offices situated in New York, Hong Kong, UK and Colombo, we service some of the most renowned global intimate brands. Sharing a long standing strategic partnership with...
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...NIKE, INC. ANNUAL REPORT ON FORM 10-K Table of Contents Page PART I ITEM 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales and Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
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...NIKE CASE STUDY This post is a based on a case study of Nike. The article will be discussing legal and ethical analysis and how the impact the operational/ ethical issues of the organization, the paper shall also be discussing the contribution factors and how the company’s corporate culture may have helped to minimize the unethical behavior or actually contributed to/caused the unethical behavior. The paper is also going to provide ethical decision factors, which are going to address or going to be considered in resolving the legal/ethical issues identified within this case. And finally the paper is going to provide an action plan for each of the legal/ethical issues along with recommendations that company can take to help prevent these issues in the future. Nike is one of the famous franchises in the world that sells sportswear for all ages. But is mostly famous for their athlete shoes and apparel and Nike is also one of the major manufacturers of sport equipment as well. The slogan for Nike is “Just Do It”. Nike was founded in January 1962 in Oregon, United States by Philip Knight and Bill Bowerman. Nike has somewhere around 700 or more retail outlets spread all over the world, and has approximately 45 offices only outside the United States. And it employs 30,000 people all over the world. Nike had a revenue excess of $16 billion in 2007. Nike’s factories are mostly located in Asian countries like Pakistan, India, Malaysia, China, Indonesia, Philippines, Taiwan, Vietnam...
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...considered as the international exchange of goods and services expressed in monetary units. The Asian Tigers, (Hong Kong, Singapore, Taiwan and South Korea) were economically developing states during the 1960’s and 1970’s, and are a rare example of third-world-rapid-development - development that nobody could have predicted 50 years ago! However, does this mean that the global economy still relies on them in the same way? And can there be a practical application for these states in contemporary development, whilst the 20th century threat of emerging markets and financial crisis looms near? The Asian Tigers were highly considered the first wave of Newly Industrialised Countries (NIC’s), and experienced enormous growth in the 1960’s and 1970’s. They had many appealing factors that found favour with the larger Transnational Corporations (TNC’s) and as a result of which they became the bulk of the workforce for many foreign companies, such as Nike. Above all, their currencies were cheap, and therefore they easily attracted investment from foreign countries that could make more profit. And they were seen as less of a competition in relation to the newly industrialised areas, such as China, which were still using higher wages and therefore a more expensive workforce. There was also the advantage of location. The Asian Tigers were connected to the western world through the Pacific Ocean, which was seized as an opportunity to ship goods and products by sea. These trade routes are still...
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...CASE I - MARKETING SPOTLIGHT- NIKE 1. Nike one the top listed shoe company in the current world begun their business in 1962. The company focused on high-quality running shoes designed especially for the athletes. The key factor for Nike was that they have been able to create strong brand preferences among the customers. Nike created their brand image into consumers mind by using celebrity. The company’s commitments to designing innovative footwear for serious athletes help it build a cult following among American consumers. They run their marketing by using top athletes in their advertisement all over America and found that it put a huge influence to the consumer mind. Nike found that product and brand choices of consumers are hugely influenced by the preferences and behavior of their beloved celebrities. So the company signed an upcoming popular runner named Steve Prefontaine for their advertisement in 1973 and Prefontaine’s irreverent attitude matched Nike’s spirit. At the end the thought of using professional athletes in their advertising campaign proved both efficient and effective. Another important reason for Nike’s success was that they read the consumers mind perfectly. Nike does not sell “Nike air max” shoes, it sold a way of life, which is key to its success. This flag is the incentive for the people, and the philosophy behind the energy and determination, is that everyone concerned, whether you are not athletes. Nike uses a motivational type of language to inspire...
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