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Chapter1TheScopeandChallengeofInternationalMarketing?McGraw-HillEducation.Allrightsreserved.Authorizedonlyforinstructoruseintheclassroom.

NoreproductionorfurtherdistributionpermittedwithoutthepriorwrittenconsentofMcGraw-HillEducation.LearningObjectives1-1 Thebenefitsofinternationalmarkets1-2 ThechangingfaceofU.S.business1-3 Thescopeoftheinternationalmarketingtask1-4 Theimportanceoftheself-referencecriterion(SRC)ininternationalmarketing1-5 Theincreasingimportanceofglobalawareness1-6 TheprogressionofbecomingaglobalmarketerGlobalCommerceCausesPeace1of3GlobalcommercethrivesduringpeacetimeEconomicboominNorthAmericainlate1990sTheendoftheColdWarOpeningformercommunistcountriestoworldtradingsystemGlobalCommerceCausesPeace2of3InternationaltradeisimportantLackofconsistentandpredictabletradepoliciescanleadtotensionManyworldeventsaffecttradeCompanyscandalsandlayoffsWarsandpoliticalunrestNaturaldisastersFinancialandeconomicdisruptionsPopulistdevelopmentsU.K.breakwiththeEuropeanUnionviaBrexitvotePopulistcandidateslikeDonaldTrumpintheU.S.areelectedGlobalCommerceCausesPeace3of3FourTrendsAffectingGlobalBusinessGrowthoftheWTOandopentradeagreementsDevelopingcountriesmovingtowardfreetradeTheInternet,cellular,andnetworkedcommunicationAmandatetomanagetheglobalenvironmentforthefutureInternationalTradeandPeaceArailhasbeenbuilttolinkNorthandSouthKoreaforthefirsttimeinnearly60yearstotransportmaterials.Thisshowsasteptowardpeaceandinternationaltrade.?HanMyung-guTheInternationalizationofU.S.BusinessGlobalizationofmarketsincreasingMoreforeigncustomers,competitors,suppliersCompetitioncomesfromdomesticandforeignfirmsManyforeign-controlledcompaniesinU.S.ForeigndirectinvestmentinU.S.isabove$3trillionForeign-ownedcompaniesinalmostallindustries:Automobiles(Honda,BMW,Mercedes)Appliances(LGElectronics,Frigidaire)Conveniencestoresandrestaurants(7-Eleven,Ben&Jerry’s)Newsandentertainment(TheWallStreetJournal,PearleVision,UniversalStudios,RCA)Hotels(HolidayInn,WaldorfAstoria)Exhibit1.1ForeignAcquisitionsofU.S.Companies1of2U.S.Companies/BrandsForeignOwner7-ElevenJapanBen&Jerry’s(icecream)U.K.BudweiserBelgiumChryslerItalyChryslerBuilding(NYC)AbuDhabiChurch’sChickenBahrainCITGOVenezuelaColumbiaPictures(movies)JapanFrench’sMustardU.K.Firestone(tires)JapanFrigidaireSwedenGenentechSwitzerlandSource:Compiledfromannualreportsoflistedfirms,2018.Exhibit1.1ForeignAcquisitionsofU.S.Companies2of2U.S.Companies/BrandsForeignOwnerGerberSwitzerlandHolidayInnU.K.HuffyCorp.(bicycles)ChinaOroweat(breads)MexicoPurina(petfood)SwitzerlandRandomHouse(publishing)GermanyRCA(television)France/ChinaSmith&Wesson(guns)U.K.SmithfieldFoods(pork)ChinaSwift&Company(meatpacking)BrazilTheWallStreetJournalAustraliaT-MobileGermanyWaldorfAstoriaHotel(NYC)ChinaSource:Compiledfromannualreportsoflistedfirms,2018.MexicanBrandsintheU.S.AlongwithNAFTAhavecometwoofMexico’smostprominentbrandnames.Gigante,oneofMexico’slargestsupermarketchains,nowhasseveralstoresinSouthernCalifornia,includingthisoneinAnaheim.GrupoBimbo,agrowingMexicanmultinational,hasrecentlypurchasedAmericanbrand-namedfirmssuchasOroweat,Webers,SaraLee,andMrs.Baird’sBread.?JohnGrahamRevenuesfromInternationalSalesAmericanbrandshaveaglobalreachImportantforU.S.businessestothriveInmanycases,foreignsalesexceeddomesticsalesForeigninvestmentsgeneratealotofrevenueApplehadrevenueof$215billionin2016;60percentoftotalrevenuefrominternationalsalesExhibit1.2SelectedU.S.CompaniesandTheirInternationalSalesCompanyGlobalRevenues(billionsofdollars)PercentRevenuesfromOutsidetheU.S.Amazon136.033.6Apple215.160.0Boeing94.659.0DowChemical48.265.5Exxon197.573.5Ford151.838.5GeneralElectric119.770.3Intel59.478.2Johnson&Johnson71.947.4Procter&Gamble65.358.7Walmart482.224.5Source:S&P500,2016:GlobalSalesYearinReview(July2017).InternationalMarketingDefinedTheperformanceofbusinessactivitiesPlan,price,promote,directflowofgoodsandservicesforprofitForconsumersorusersinmorethanonenationUniquefromdomesticmarketingManyunfamiliarproblemsrequireuniquestrategiestocopewithproblemsLevelofuncertaintyanduncontrollablesinforeignmarketsTheInternationalMarketingTaskUncontrollableuncertaintyComprisedofuncontrollableelementsinbusinessenvironmentsEachinternationalmarkethasownsetoffactorsExhibit1.3TheInternationalMarketingTaskJumptolongimagedescription.MarketingDecisionFactors1of2AmarketingprogramisdesignedforoptimaladjustmenttouncertaintyControllableelementsindomesticenvironmentBlendallelementstocapitalizeonanticipateddemandCanalterelementsifneededChangingmarketconditions,consumertastes,andcorporateobjectivesMarketingDecisionFactors2of2UncontrollableelementsindomesticenvironmentActivelyevaluateelementstomakeadjustmentsDeterminetheoutcomeofthemarketingenterpriseAspectsoftheDomesticEnvironmentDomesticEnvironmentUncontrollablesPoliticalandlegalforcesEconomicclimateCompetitionLeveloftechnologyStructureofdistributionGeographyandinfrastructureCulturalforcesAspectsoftheForeignEnvironmentForeignEnvironmentUncontrollablesPoliticalandlegalforcesEconomicforcesCompetitiveforcesLeveloftechnologyStructureofdistributionGeographyandinfrastructureCulturalforcesCitibankinBrazilACitibankbranchintheheartofBrazil.Oneoftheworld’sgreatmultinationalcorporationsbarelysurvivedthefinancialdebacleofOctober2008.Indeed,duringthepastfewyears,itsinternationaloperationshaveperformedmuchbetterthanitsdomesticoneswiththeexceptionofthoseinBrazil.Inparticular,emergingmarketssuchasChina,India,andthePhilippinesprovedrelativelyresilientsincethefinancialcrisisthatbeganin2008.?JohnGrahamEnvironmentalAdaptationNeededCulturaladjustment:themostchallengingandimportanttaskDutiesofinternationalmarketersInterpretinfluenceofeachuncontrollableelementonmarketAdjustmarketingeffortstoculturesinwhichtheyarenotattunedBeawareofownframeofreferencewhenevaluatingmarketsOftenbasedoffacculturationinhomecountryTheSelf-ReferenceCriterionandEthnocentrismBothimpedeabilitytoaccuratelyassessforeignmarketSelf-ReferenceCriterion(SRC)Unconsciousreferencetoownculturalvalues,experiences,knowledgeProblematicwhenusedasbasisfordecisionsEthnocentrismOne’sowncountry,culture,orcountryisbestMostproblematicwhenaffluentcountriesworkwithlessaffluentBeVigilantofSRCandEthnocentrismtoAvoidBusinessErrorsDefinesituationinhome-country’sculturaltraits,habits,ornorms.Definesituationinforeign-country’sculturaltraits,habitsornormsthroughconsultationwithnatives.Makenovaluejudgments.IsolateSRCinfluenceinsituationandcarefullyexaminehowitcomplicatestheissue.RedefinesituationwithouttheSRCinfluenceandsolveforoptimumbusinessgoalsolution.DevelopingaGlobalAwarenessMaincomponentsToleranceofandwillingnesstolearnaboutculturaldifferencesKnowledgeofcultures,history,worldmarketpotential,andglobaleconomic,social,andpoliticaltrendsStagesofInternationalInvolvementMaincharacteristicsofcompaniesthatinternationalizequicklyHigh-technologyand/ormarketing-basedresourcesSmallerhomemarketsandlargerproductioncapacitiesMangerswhoarewell-networkedinternationallyStagesofInternationalMarketingInvolvementMorereactiveandlessstrategicNodirectforeignmarketingInfrequentforeignmarketingMoreinvolvedinstrategicplanningRegularforeignmarketingInternationalmarketingGlobalmarketingExhibit1.4

TheKOFGlobalizationIndex(toptenplusselectedothercountries)Jumptolongimagedescription.Source:SavinaGygli,FlorianHaelg,andJan-EgbertStrum,Gygli,Savina,FlorianHaelg,andJan-EgbertSturm(2018):TheKOFGlobalisationIndex–Revisited,KOFWorkingPaper,No.439(2018).AppendixofImageLongDescriptionsAppendix1Exhibit1.3TheInternationalMarketingTaskThegraphicshowsthreeconcentriccircleslabeledwithelementsofthemarketplace.TheinnermostcircleislabeledFirmCharacteristicsandincludescontrollableelements:product,price,research,promotion,andplaceordistribution.ThenextcircleislabeledDomesticEnvironmentandincludesuncontrollableelements:politicalandlegalforces,economicclimate,andcompetitivestructure.TheoutermostcircleislabeledForeignEnvironmentandincludesuncontrollableelements:politicalandlegal,cultural,economic,andcompetitiveforces;geographyandinfrastructure;structureofdistribution;andleveloftechnology.Thegraphicshowstheseelementsforthesamplecountrylayeredontopofthreeseparatecircles.Eachcirclerepresentsthreeinternationalmarkets,eachwithitsownenvironmentalelements.Returntooriginalslide.Appendix2Exhibit1.4TheKOFGlobalizationIndexAbarchartshows20countriesthatarerankedbytheirpolitical,social,andeconomicglobalization.Thepoliticalglobalizationmeasuresincludetradeflows,FDIflows,incomepaymentstoforeigners,meantariffrates,andtaxesoninternationaltrade.Thesocialglobalizationmeasuresincludetelephonetraffic,internationaltourism,foreignpopulation,Internetusers,andtelevisions.Theeconomicglobalizationmeasuresincludeembassiesincountry,membershipininternationalorganizations,internationaltreaties,andparticipationinUNmissions.ThehighestratescountriesareNetherlands,Ireland,Belgium,andAustria,inthatorder.ThelowestratedcountriesareBrazil,China,Mexico,andEgypt,inthatorder.TheU.S.rankstowardsthemiddleofthe73countriesrated.Returntopreviousslide.Chapter2TheDynamicEnvironmentofInternationalTrade?McGraw-HillEducation.Allrightsreserved.Authorizedonlyforinstructoruseintheclassroom.

NoreproductionorfurtherdistributionpermittedwithoutthepriorwrittenconsentofMcGraw-HillEducation.LearningObjectives1of22-1 ThebasisforthereestablishmentofworldtradefollowingWorldWarII2-2 Theimportanceofbalance-of-paymentfigurestoacountry’seconomy2-3 Theeffectsofperfectionismonworldtrade2-4 TheseveraltypesoftradebarriersLearningObjectives2of22-5 TheprovisionsoftheOmnibusTradeandCompetitivenessAct2-6 TheimportanceofGATTandtheWorldTradeOrganization2-7 TheemergenceoftheInternationalMonetaryFundandtheWorldBankGroupTradeBarriers—AnInternationalMarketer’sMinefieldTariffandNontariffBarriersUntilrecently,usehasbeenreducedinrecentyearsElectionofnationalisticleadersthreatensthiseffortSomecountriesattempttocontroltradefortheirownadvantageAscompetitionincreases,sodoestendencytowardprotectionismGlobaltradebenefitsallProvidesmorebusinessopportunitiesformarketersProvideswiderselectionofgoodsandservicesforconsumersExhibit2.1TopTen2017U.S.TradingPartners

($inbillions,merchandisetrade)RankCountryTotalTradeExportsImportsBalanceblankTotal3889.71546.82342.9-796.11China636.0130.4505.6-375.22Canada582.4282.4300.0-17.63Mexico557.0243.0314.0-71.14Japan240.267.7136.5-68.85Germany171.253.5117.7-64.36SouthKorea119.448.371.2-22.97UnitedKingdom109.456.353.13.58France82.533.648.9-15.39India74.325.748.6-22.910Italy68.318.350.0-31.6Source:/foreign-trade/statistics/highlights/top/index.html,2018.TradeBalanceStatisticsStatisticsaregreatlydistortedImportsfromChinaincludepartsfromothercountriesOftenseeninelectronicimports2017AppleimportsfromChinaApproximately$16billioniniPhonesApproximately$8billioniniPadsExhibit2.2SourcesofDistortioninProminentTradeStatisticsValueofiPhoneShippedfromChinatoU.S.(componentsandlabor)Japan34%Germany17%SouthKorea13%UnitedStates6%China3.6%Others27%ValueofAppleiPadShippedfrom

ChinaGlobally(costsandprofits)Chineselabor2%Non-Chineselabor5%Costofmaterials31%Distributionandretail15%Appleprofits30%OtherU.S.profits2%SouthKoreanprofits7%Taiwaneseprofits2%Others’profits6%Sources:AndrewBatson,“NotReally‘MadeinChina’,”TheWallStreetJournal,December16,2010,pp.B1–2;“iPadded,”TheEconomist,January12,2012,p.84.TheTradeDeficitEventhoughtheJohnDeeretractorslinedupforshipmentfromitsWaterloo,Iowa,plantappearimpressive,theHyundaicarsstackedupbythewaterinUlsan,SouthKorea,headedfortheUnitedStatesdwarftheirnumbers.ThejuxtapositionofthetwopicturesaptlyreflectsthepersistenceofAmerica’sbroadermerchandisetradedeficit.?Lyroky/AlamyStockPhoto?Allstarphotos/NewscomTheTwentiethtotheTwenty-FirstCenturyTwentiethCenturyWWIleadtoeconomicdepressionTradewashaltedduetohightariffwallsUnitedStatessettospreadcapitalismafterWWIIBenefittedall,newmarketscreatedaseconomiesgrewGeneralAgreementonTariffsandTrade(GATT)Passedtopreventsituationsimilartopost-WWIReductionoftariffsandtradebarriersWorldTradeandU.S.Multinationals1of3U.S.MultinationalCorporations(MNCs)CompaniesbranchedouttoforeigneconomiesManyopportunitiesaseconomiesgrewafterWWIIU.S.dominancedeemedasthreateningbylate60sEuropeandLatinAmericaputlimitsonU.S.investmentsTheresultwasthateconomicpowerwasmoreevenlydistributedWorldTradeandU.S.Multinationals2of3BalanceofMerchandiseTradeRoleofU.S.inglobaltradeevolvedthroughtimeFavorablebalanceuntil1979,aconstanttradedeficitisnowthenormManyimportantquestionsraisedin1980sHowtocompeteinforeignmarketsFairnessofinternationaltradepoliciesWorldTradeandU.S.Multinationals3of3Manychangestoworldtradeby1990CreationoforganizationstofacilitatetradeNAFTA(nowUSMCA),EU,AFTA,APECPowerexpectedtoshifttomorecountriesNewmarketopportunitiesCountrieswithpowerinvestinginothercountriesCompaniesexpandingglobalreachBalanceofPayments1of3InternationalTradeFinancialtransactionsoccurwitheachtradeMoneyisconstantlyflowinginandoutofcountryImportanttokeeptrackoftransactionsBalanceofPayments2of3Balance-of-paymentsstatementRecordofallfinancialtransactionswithothercountriesCreditsanddebitsmustoffseteachotherDouble-entrybookkeepingsystemThreemainaccountsCurrentaccountOfprimaryinteresttointernationalbusinessCapitalaccountReservesaccountBalanceofPayments3of3BalanceofPaymentsintheU.S.HighmerchandisetradedeficityieldsanimbalanceValueofU.S.currencylowLesspurchasingpower,lessdemandforimportsU.S.productscheapforforeignbuyersHigherexportsExhibit2.5U.S.CurrentAccountBalance(%ofGDP)Source:WorldBank,2018Jumptolongdescription.Protectionism

1of5TheRealityofWorldTradeCountriesprotecttheirownmarketsWardoffunwantedforeigninvestmentsandimportsUsebarriersforprotectionTariffsQuotasExchangebarriersPsychologicalbarriersProtectionism

2of5ArgumentsforProtectionismProtectionofaninfantindustryProtectionofthehomemarketNeedtokeepmoneyathomeEncouragementofcapitalaccumulationMaintenanceofthestandardoflivingandrealwagesProtectionism

3of5ArgumentsforProtectionismcontinuedConservationofnaturalresourcesIndustrializationofalow-wagenationMaintenanceofemploymentReductionofunemploymentNationaldefenseEnhancementofbusinesssizeRetaliationandbargainingProtectionism

4of5ProtectionismcanbeharmfulContributestocountry’sindustrialinefficiencyDetractsfromnation’sadjustmenttoworldsituationTariffscostconsumersmoremoneyLesslikelytopurchase,whichinturnhurtstheeconomyProtectionism

5of5FreetradeistypicallybeneficialMorepeoplewillingtopurchaseHigherpurchasingpowerfortheaverageconsumerIncreasedincomeofallinvolvedMorejobopportunitiesExhibit2.6GrowthofConsumerPurchasingPower1990to2016(GDPpercapital,PPP,constant2011$s)Jumptolongdescription.Source:WorldBank,WorldDevelopmentIndicators,2018.TradeBarriers1of4GovernmentsestablishtariffandnontariffbarriersImplementedagainstforeignimportsandbusinessesIncludesquotas,boycotts,monetarybarriers,andmarketbarriersReasonsforbarriersDevelopnewdomesticindustriesProtectcurrentdomesticindustriesTradeBarriers2of4Tariff

barrierstendtoincrease:InflationarypressuresSpecialinterests’privilegesGovernmentcontrolandpoliticalconsiderationsineconomicaffairsThenumberoftariffsresultingfromcountriesimpactedbyyourcountry’stariffs(Reciprocity)TradeBarriers3of4Tariff

barrierstendtoweaken:Balance-of-paymentspositionsSupply-and-demandpatternsInternationalrelations(tradewars)Tariffbarrierstendtorestrict:Manufacturers’supplysourcesChoicesavailabletoconsumersCompetitionTradeBarriers4of4AVarietyofNontariffBarriersQuotasandimportlicensesVoluntaryexportrestraints(VERs)BoycottsandembargoesMonetarybarriersStandardsAnti-dumpingpenaltiesDomesticsubsidiesandeconomicstimuliVoluntaryExportRestraintExampleNYKLine(NipponYusenKaisha)bringsautomobilesfromJapantoAqaba,Jordan,ontheRedSeafordeliverytoothercountriesinthearea,butnotforneighboringIsrael.BecauseoftheArabboycottofIsrael,separateshipmentsofcarsaremadetotheadjacentportofEilat.Ironically,automobilesnowareimportedintoneighboringJordanthroughasecondroute:throughtheIsraeliportofHaifa.?JohnGrahamEasingTradeRestrictions1of4TheOmnibusTradeandCompetitivenessActU.S.policyestablishedin1988HelpU.S.businessesbemoresuccessfulinworldmarketsCorrectperceivedinjusticesintradepoliciesManycountriesallowedtotradefreelywithU.S.SamecountriesdonotreciprocateaccessCoversthreeareasforimprovingU.S.tradeMarketaccess,exportexpansion,importreliefEasingTradeRestrictions2of4GeneralAgreementonTariffsandTrade(GATT)WorldwideagreementafterWorldWarIIThreemainprovisionsTradeshallbeconductedonanondiscriminatorybasisProtectionshallbeaffordeddomesticindustriesthroughcustomstariffs,notthroughsuchcommercialmeasuresasimportquotasConsultationshallbetheprimarymethodusedtosolveglobaltradeproblemsEasingTradeRestrictions3of4GeneralAgreementonTariffsandTrade(GATT)continuedEightroundsofnegotiationsinceinceptionTokyoRound(1974)Tariffcuts,butstillmanyissuesUruguayRound(1994)Sector-specificagreementsGATs,TRIMs,TRIPsCreationoftheWorldTradeOrganizationEasingTradeRestrictions4of4WorldTradeOrganization(WTO)ExpansionontheGATTstructureasastand-aloneinstitutionAll164membersmustparticipateandadheretorulesPanelofexpertstohearandresolvedisputesContinuousdiscussion,notjust“rounds”likeGATTMostlyaccepted,butsomedetractorsSomecountriesfindloopholestorulesTheInternationalMonetaryFundandWorldBankGroup1of2TwoGlobalInstitutionsHelpnationsbecomeandremaineconomicallyviableInternationalMonetaryFund(IMF)Goalsof188-countrymembershipStabilizeforeignexchangeratesEstablishfreelyconvertiblecurrencyDevelopedspecialdrawingrights(SDRs)TheInternationalMonetaryFundandWorldBankGroup2of2WorldBankGroupGoalsReducepovertyandimprovelivingstandardsPromotesustainablegrowthandinvestmentinpeopleMadeupoffiveinstitutionswithseparateobjectivesProvidesloans,technicalassistance,andpolicyguidancetohelpdevelopingnationsachievegoalsProtestsagainstGlobalInstitutions“Anti-capitalistProtesting”Emergedbeginningin1999FightagainstunintendedconsequencesofglobalismEnvironmentalharm,workerexploitationandjobloss,culturalextinction,higheroilprices,diminishedsovereigntySomeviolentprotests,terrorismNonviolentprotestshaveenactedpolicychangeTypesofProtest“Globalization”byGiffordMyers.PhotobyJohnGrahamGiffordMyersshowedthissculptureObject(Globalization)–2001inFaenza,Italy,asapeacefulprotest.?arindambanerjee/ShutterstockStarbucksmaybereplacingMcDonald’sastheAmericanbrandforeignersmostlovetohate.Herelocalpolicefailtostopanti–WorldTradeOrganizationriotersinSeattlefrombreakingwindowsclosetohome.AppendixofImageLongDescriptionsAppendix1Exhibit2.5U.S.CurrentAccountBalance(%ofGDP)Forthemajorityoftheperiod,theUnitedStateshadanunfavorablecurrentaccountbalance.Itwasonlyfavorableforafewyearsduringthemidtolate70s,withthebalancepeakingat1percentin1975.Startinginthe1980s,thebalancestartedtodecrease,reachingnegative3.5percentby1987.By1990,thebalanceofthecurrentaccountwasrestored.After1990,thecurrentaccountbalancestartedtodropagain,continuingtodecreaseeachyearuntilitreacheditslowestatnegative6percentin2006.After,thecurrentaccountbalancestartedtograduallyincreasemostyears,endingatnegative2.5percentin2017.Returntooriginalslide.Appendix2Exhibit2.6GrowthofConsumerPurchasingPower1990to2016(GDPpercapital,PPP,constant2011$s)Thegraphshowsgrowthintheaverageconsumer’spurchasingpowerforallfourcountries.TheUnitedStateshashadthehighestaverageconsumerpurchasingpowerthroughtheentireperiod.In1990,itwasjustbelow40,000.Itgraduallyincreasedeachyear,reachingjustabove50,000by2007.Itdroppedslightlyin2009,butrecoveredtoabout52,000by2016.InCanada,theaverageconsumerpurchasingpowerwasatjustabove30,000in1990.Itgraduallyincreasedtoabove40,000by2007,droppedslightlyin2009,butrecoveredtoabout42,000by2016.InMexico,theaverageconsumerpurchasingpowerwasatabout12,000in1990.Ithasgrownverygraduallyeachyearandreachedabout16,000by2016.Chinahashadthelowersaverageconsumerpurchasingpowerthroughouttheentireperiod.Itstartedataround100andgraduallyincreasedto500by2005,atwhichpointitbegantogrowmorequickly,reachingaround14,000by2016.Returntooriginalslide.Chapter3HistoryandGeography:TheFoundationsofCulture?McGraw-HillEducation.Allrightsreserved.Authorizedonlyforinstructoruseintheclassroom.

NoreproductionorfurtherdistributionpermittedwithoutthepriorwrittenconsentofMcGraw-HillEducation.LearningObjectives1of23-1 Theimportanceofhistoryandgeographyinunderstandinginternationalmarkets3-2 Theeffectsofhistoryonacountry’sculture3-3 Howcultureinterpretseventsthroughitsowneyes3-4 Howlong-pastU.S.internationalpoliciesstillaffectcustomerattitudesabroadLearningObjectives2of23-5 Theeffectofgeographicdiversityoneconomicprofilesofacountry3-6 Whymarketersneedtoberesponsivetothegeographyofacountry3-7 Theeconomiceffectsofcontrollingpopulationgrowthandagingpopulations3-8 CommunicationinfrastructuresareanintegralpartofinternationalcommerceTheCulturalEnvironmentofGlobalMarketsCultureSociety’sacceptedbasisforrespondingtoexternalandinternaleventsInfluencedbyhistoricaleventsandgeographicaluniquenessHistoryandgeographyimpactbusinessHistoricalPerspectiveinGlobalBusinessHistoryHelpsdefineanation’s“mission,”howitperceivesitsneighbors,self,andplaceinworldStudyinganation’scultureincludesstudyingitshistoryHistoryandContemporaryBehavior1of3TraderelationsbetweenU.S.andAsiaThe1stOpiumWarandtheTreatyofNanjing(1839to1842)BritishtradersforcedagatewaythroughHongKongintoxenophobicChinaThe2ndOpiumWar(1857to1860)BritishandFrenchdestroyedsummerpalaceinBeijingMorefreedomforforeigntraders;ChristianevangelismHistoryandContemporaryBehavior2of3TraderelationsbetweenU.S.andAsiacontinuedTaipingRebellion(1851to1864)Chinesehumiliatedbyforeigners;lostconfidenceingovernment20to40millionChinesepeoplekilledinrebellionChineseleadersstillwaryofforeigninfluencesasresultHistoryandContemporaryBehavior3of3JapanesehistoryimpactsitsbusinessJapanwentthroughmanychangesthroughhistoryShogunfeudalsystem,threatofdominationbycolonialpowers,riseofsocialclasseshumiliationofWWIIJapanesebehaviorsandvaluesshapedbyhistoryConfucianphilosophyBasicvirtueofloyaltytosocialgroups,countryCooperationforthecollectivegoodHistoryIsSubjective1of2Importanttounderstandanynation’sbusinessandpoliticalcultureExemplifiedbyUnitedStates-MexicanRelationship“Geographyhasmadeusneighbors,traditionhasmadeusfriends.”–PresidentJohnF.Kennedy“Geographyhasmadeuscloser,traditionhasmadeusfarapart.”–Mexicans

Exhibit3.1TerritorialExpansionofUnitedStatesfrom1783TheUnitedStatesexpandedwestwardtothePacificthroughaseriesoffinancialdeals,negotiatedsettlements,andforcibleannexations.TheacquisitionofterritoryfromMexicobeganwiththeBattleofSanJacintoin1836,whenTexasstagedasuccessfulrevoltagainsttheruleofMexicoandbecameTheRepublicofTexas—latertojointheUnionin1845.TheMexicanWar(1846to1848)resultedinMexicocedingCaliforniaandalargepartoftheWesttotheUnitedStates.Jumptolongdescription.HistoryIsSubjective2of2BasisofU.S.foreignpolicyin19thand20thcenturiesManifestDestinyAmericansordainedbyGodtocreatemodelsocietyTheMonroeDoctrineNomoreEuropeaninvolvementinWesternHemisphereRooseveltCorollaryU.S.policedLatinAmericatoensureitmetobligationsU.S.perspective:justifiableinterventionsLatinAmericanperspective:unwantedintrusionsImpactscurrentbusinessrelationshipGeographyandGlobalMarkets1of6GeographyStudyofEarth’ssurface,clima

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