{"id":66,"date":"2018-09-24T14:28:32","date_gmt":"2018-09-24T14:28:32","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/suny-osintrobus\/chapter\/threats-and-opportunities-in-the-global-marketplace\/"},"modified":"2018-09-28T14:41:17","modified_gmt":"2018-09-28T14:41:17","slug":"threats-and-opportunities-in-the-global-marketplace","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-herkimer-osintrobus\/chapter\/threats-and-opportunities-in-the-global-marketplace\/","title":{"raw":"Threats and Opportunities in the Global Marketplace","rendered":"Threats and Opportunities in the Global Marketplace"},"content":{"raw":"
    \r\n \t
  1. What threats and opportunities exist in the global marketplace?<\/li>\r\n<\/ol>\r\n

    To be successful in a foreign market, companies must fully understand the foreign environment in which they plan to operate. Politics, cultural differences, and the economic environment can represent both opportunities and pitfalls in the global marketplace.<\/p>\r\n\r\n

    \r\n

    Political Considerations<\/h3>\r\n

    We have already discussed how tariffs, exchange controls, and other governmental actions threaten foreign producers. The political structure of a country may also jeopardize a foreign producer\u2019s success in international trade.<\/p>\r\n

    Intense nationalism, for example, can lead to difficulties. Nationalism<\/strong> is the sense of national consciousness that boosts the culture and interests of one country over those of all other countries. Strongly nationalistic countries, such as Iran and New Guinea, often discourage investment by foreign companies. In other, less radical forms of nationalism, the government may take actions to hinder foreign operations. France, for example, requires pop music stations to play at least 40 percent of their songs in French. This law was enacted because the French love American rock and roll. Without airtime, American music sales suffer. In another example of nationalism, U.S.-based PPG<\/span> made an unsolicited bid to acquire Netherlands-based AzkoNobel NV<\/span>. There was a chorus of opposition from Dutch politicians to the idea of a foreign takeover of AzkoNobel, the Dutch paint manufacturer. The government warned that it would move to defend AzkoNobel from a hostile takeover attempt. AzkoNobel played up the sentiment, tweeting about its rejection of the hostile takeover with the hashtag #DutchPride.[footnote]Ellen Proper, \u201cDutch See Red Over Foreign Bid For Paint Giant,\u201d Bloomberg News, https:\/\/www.bloomberg.com, March 10, 2017.[\/footnote]<\/p>\r\n

    In a hostile climate, a government may expropriate<\/em> a foreign company\u2019s assets, taking ownership and compensating the former owners. Even worse is confiscation,<\/em> when the owner receives no compensation. This happened during rebellions in several African nations during the 1990s and 2000s.<\/p>\r\n\r\n<\/div>\r\n

    \r\n

    Cultural Differences<\/h3>\r\nCentral to any society is the common set of values shared by its citizens that determine what is socially acceptable. Culture underlies the family, educational system, religion, and social class system. The network of social organizations generates overlapping roles and status positions. These values and roles have a tremendous effect on people\u2019s preferences and thus on marketers\u2019 options. For example, in China Walmart<\/span> holds live fishing contests on the premises, and in South Korea the company hosts a food competition with variations on a popular Korean dish, kimchee.\r\n

    Language is another important aspect of culture. Marketers must take care in selecting product names and translating slogans and promotional messages so as not to convey the wrong meaning. For example, Mitsubishi Motors had to rename its Pajero model in Spanish-speaking countries because the term refers to a sexual activity. Toyota<\/span> Motor\u2019s MR2 model dropped the 2<\/em> in France because the combination sounds like a French swear word. The literal translation of Coca-Cola<\/span> in Chinese characters means \u201cbite the wax tadpole.\u201d<\/p>\r\n

    Each country has its own customs and traditions that determine business practices and influence negotiations with foreign customers. For example, attempting to do business in Western Europe during the first two weeks in August is virtually impossible. Businesses close, and everyone goes on vacation at the same time. In many countries, personal relationships are more important than financial considerations. For instance, skipping social engagements in Mexico may lead to lost sales. Negotiations in Japan often include long evenings of dining, drinking, and entertaining; only after a close personal relationship has been formed do business negotiations begin. (Figure)<\/a><\/strong> presents some cultural dos and don\u2019ts.<\/p>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Cultural Dos and Don\u2019ts Guidelines and Examples<\/th>\r\n<\/tr>\r\n
    DO:<\/th>\r\nDON\u2019T:<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
    \r\n
      \r\n \t
    • Always present your business card with both hands in Asian countries. It should also be right-side-up and print-side-showing so that the recipient can read it as it is being presented. If you receive a business card, accept it with gratitude and examine it carefully. Don\u2019t quickly put it into your pocket.<\/li>\r\n \t
    • Use a \u201csoft-sell\u201d and subtle approach when promoting a product in Japan. Japanese people do not feel comfortable with America\u2019s traditional hard-selling style.<\/li>\r\n \t
    • Understand the role of religion in business transactions. In Muslim countries, Ramadan is a holy month when most people fast. During this time everything slows down, particularly business.<\/li>\r\n \t
    • Have a local person available to culturally and linguistically interpret any advertising that you plan to do. When American Airlines wanted to promote its new first-class seats in the Mexican market, it translated the \u201cFly in Leather\u201d campaign literally, which meant \u201cFly Naked\u201d in Spanish.<\/li>\r\n<\/ul>\r\n<\/td>\r\n
    		\r\n