International Business CH15 (DQ#2) --

International Business

Ch15 (DQ#2) -- Levitt's view is extreme because it tells only part of the picture. As the chapter points out, there's certainly been increasing standardization in consumer tastes such as sushi consumption in LA and hamburgers in Tokyo. But, cultural and economic differences still persist between countries as do different trade regulations. Over time, we are likely to see consumers become more similar in their values and lifestyle choices that influence that purchasing behavior, influenced heavily by factors such as economic convergence, increases in global advertising strategies, and technology advances. Further, free trade is leading to more homogenous trade policies. Therefore, there will likely be an increase in standardization and a decrease in specialization, but specialization is unlikely to vanish completely even in 20 years.

CH 15 (DQ#3) The CEO is wrong for many reasons. First, cultural barriers make it difficult to communicate the same marketing message across counties. The differences in the ways brands are perceived, promoted and used still varies greatly from country to country, Likewise, pricing strategies have to reflect consumer demand in a particular market as well as supplier power. This holds true as long as a firm is able to keep national markets separate and there are different price elasticities of demand in different countries.

Ch 15 (DQ#4) -- This statement is false; price discrimination is distinguishable from dumping. Price discrimination means that a company is charging consumers in different countries different prices for the same product. Dumping, on the other hand, occurs when a company sells a product for a price that is less than the cost of producing it Therefore, dumping might be a type of price discrimination if a company is dumping a product in one country and not another and is illegal in many countries. But price discrimination does not necessary imply dumping and is a common legal practice to match the income demographics of certain countries.

Ch 16 (DQ#1) An ethnocentric approach can help host countries that lack qualified individuals fill senior management positions, instill a unified corporate culture and transfer parent-country nationals who have competency knowledge to foreign operations. The disadvantages are that it can lead to resentment, lower productivity, increase turnover for host-country nationals and lead to cultural myopia. A polycentric approach can reduce cultural myopia and be less expensive to implement, but it limits career mobility and isolates headquarters from foreign subsidiaries. A geocentric approach makes good use of human resources, creates a staff that can work in a number of cultures, reduces cultural myopia and increases local responsiveness. However, immigrations laws limit its use and it can be expensive to implement. An ethnocentric approach is suitable for an international strategy, a polycentric approach is compatible with a localization strategy and a geocentric strategy is best for global standardization and transnational strategies.