1. FHF  Exporting & importing  Trading companies  Licensing and franchising  Contract manufacturing  Joint ventures  Direct investment  Multinational corporations  Many companies’ involvement in international trade begins with importing goods for resale Getting Involved in International Business 3-24

2. FHF Countertrade Agreements  Bartering products for other products instead of for currency  Export agents are middlemen that help companies by handling their international transactions Trading Company  Buys goods in one country and sells them to buyers of another country  Handles all activities required to move products from one country to another Getting Involved in International Trade 3-25

3. FHF A trade arrangement where one company allows another company to use its company name, products, patents, brands, trademarks, raw materials, and production processes in exchange for a fee or royalty  Many products are licensed and produced by local companies internationally Licensing 3-26

4. FHF A form of licensing where a company (franchiser) agrees to provide a franchisee a name, logo, operational guidelines, products, etc., in return for a financial commitment and the agreement to conduct business in accord with the franchiser’s standard of operation  McDonald’s is the world’s largest franchise in terms of revenues Franchising 3-27

5. FHF The hiring of a foreign company to produce a specified volume of the initiating company’s product to specification  The final product carries the domestic firm’s name  Common in high-tech industries, automotive industry and food manufacturing  Many clothing manufacturers use contract manufacturing Contract Manufacturing 3-28

6. FHF The relocation of a business process by a company or subsidiary to another country  Different from outsourcing  The company retains control of the process  Not subcontracting to a different company  Appealing because of lower wages, high skills, time zone differences Offshoring 3-29

7. FHF Other Forms of Engaging in International Trade Joint Venture  The sharing of the costs of operation of a business between a foreign company and a local partner Strategic Alliance  A partnership formed to create competitive advantage on a worldwide basis Direct Investment  The ownership of overseas facilities 3-30

8. FHF  The highest level of international business involvement  Operates on a worldwide scale without significant ties to a single nation or region  Largest MNCs are wealthier than most countries  Antiglobalization activists contend that MNCs are responsible for growing wealth disparity and misusing scarce resources Multinational Corporations 3-31

9. FHF Multinational Strategy  A plan used by international companies that involves customizing products, promotion and distribution according to cultural technological, regional and national differences Global Strategy (Globalization)  A strategy that involves standardizing products (promotion and distribution) for the whole world as if it were a single entity. International Business Strategies 3-32

10. FHF  Many political barriers to trade have fallen in recent decades  Navigating international business remains complicated  Technology and improved standards of living globally are creating tremendous new marketing opportunities  Governments and business organizations exist to help businesses looking to go international Managing the Challenges of Global Business 3-33