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    Multinational Market Strategies

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    1. Market entry strategies for big emerging markets typically anticipate significant levels of corruption in government and industry. Is this a legitimate concern for international marketers? Give some examples.

    2. "Trade barriers are coming down all over the world." Do you agree or disagree with this statement and explain your position.

    3. I said in class, many times that " It is never the responsibility of the buyer to adjust to to the style of the seller." Do you agree? Why does this become so much more important when marketing products across national boundaries?

    4. Countertrade has become a widely accepted methodology for facilitating multinational transactions. Do you agree or disagree? Is traditional "cash for goods" becoming a thing for the past? Please support your answer with some examples and literature support?

    PS: Reference "International Marketing" By Philip R. Cateora, McGraw Hill.

    Thank you.

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    Solution Preview

    Please see response attached (see Posting 93180.doc) for active links (also presented below), including two supporting articles. I hope this helps and take care.



    This assignment is fairly straightforward, as it asking you to write a well-developed essay for each of the four questions (concise and to the point). Since these are research questions, the place to start is researching your topic. Where are you in the research process? One approach to help with this type of assingment is to provide a tentative outline and then to look at information from various sources, to consider for each section and for each of the four questions. This is the approach this response takes. You can then draw on for your final copy. Specifically, a well developed essays have the following sections:

    I. Introduction (about ¼ page, introduce your topic, including a thesis or purpose statement)

    II. Body (three or four points supporting your thesis statement)

    III. Conclusion (restate your thesis or purpose statement in different words, followed by several sentences summarizing the main points that addressed your purpose statement)

    There are four questions, which should be answered with well-developed essays. To support answers with appropriate citations from the business literature. The answer should go to the point.

    1. Market entry strategies for big emerging markets typically anticipate significant levels of corruption in government and industry. Is this a legitimate concern for international marketers? Give some examples

    Have you given this some thought? Whatever position you decide to argue, that will become your thesis statement. Then the body of your paper will be three or four points supporting your argument (e.g. thesis statement: Market entry strategies for big emerging markets should typically anticipate significant levels of corruption in government and industry, which is indeed a legitimate concern for international marketers).

    Clearly, corruption in the government and industry is a possible risk for all businesses to consider; however, like all other potential marketing entry risks, the business would need to research and implement a risk management plan.
    For example, government corruption is a pervasive element of the international business environment and has damaging effects on governments, firms, and the broader society in which it takes place. Recently publicized scandals in Russia, China, Pakistan, Lesotho, South Africa, Costa Rica, Egypt, and elsewhere underscore the extent of corruption globally, especially in the developing world. Yet, the impact of government corruption on foreign investment has received limited attention. Doe, et al (n.d.) examined how multinational firms respond to corruption when investing in foreign markets, especially developing countries. The article begins with a discussion of the direct and indirect costs of corruption to business and provides illustrations of corruption's impact on firms that invest in foreign markets. They employed a framework that incorporates two basic dimensions of government corruption ?pervasiveness and arbitrariness.

    As well, the FBI are in processing of re-engineering to meet the heightened need for corruption internationally. Although there main concern is one of public safety, it clearly demonstrates the potential of corruption in foreign governments and industry to consider in your market entry strategies. For example, the FBI public corruption forecast is this:

    The corruption of local, state, and federally elected, appointed, or contracted officials undermines our democratic institutions and sometimes threatens public safety and national security. The root of corruption is greed, and over the next five years there will be increased government spending and increased opportunities for government officials to violate the public trust. As our nation tightens security at our land borders and our air and seaports to prevent terrorism ? terrorists, international drug enterprises, and alien smuggling rings will increasingly seek to recruit U.S. law enforcement officials to further their operations, thereby undermining our security at the borders. Likewise, as additional controls are established to minimize identity fraud, there will be an increase in demand by criminal enterprises to corrupt government officials who issue identification documents. http://www.fbi.gov/publications/strategicplan/stategicplantext.htm

    Thus, it is very important to research the market before considering the foreign market as a viable option. For example, the FBI reported the following:

    Transnational/National Crime Forecast: Drug trafficking poses a continuing threat, responsible for an estimated 50,000 drug-related deaths and $110 billion in social costs per year. In producer countries, the trade funnels both money and power to criminal elements and illegally armed groups, and provides a breeding ground for corruption, violence, environmental degradation, and political and economic instability. Gang-related violence will continue as long as the demand for illicit drugs remains or increases, and drives gangs to battle for retail drug distribution markets, especially in large user-based metropolitan areas. Human trafficking organizations have increased dramatically in recent years, and will likely continue to do so over the next five years. Worldwide human smuggling is estimated to be a $7 billion industry, bringing hundreds of thousands of illegal immigrants to the United States each year. Increasingly, terrorists and their supporters will use alien smuggling networks to circumvent increased border security measures implemented since 9/11. International criminal groups will grow and form new partnerships and alliances due largely to globalization. It is likely that criminal groups will expand their intelligence capabilities to thwart law enforcement investigations. http://www.fbi.gov/publications/strategicplan/stategicplantext.htm

    Thus, there is ample evidence to support the idea that anticipating significant levels of corruption in government and industry is indeed a legitimate concern for international marketers. For example, the FBI also reports this:
    White Collar Crime Forecast: Major white collar crime will impact the U.S. economy over the next five years. Corporate fraud has undermined the public's confidence in American business institutions, and the aggressive investigation and prosecution of major corporate fraud will be a key factor in restoring long-term confidence in our business leaders. Money laundering poses a growing threat to national security. Advances in technology and the globalization of financial institutions will allow terrorist and criminal organizations to more easily influence economic, social, and political institutions. Money launderers and those engaging in financial institution fraud will increasingly use sophisticated computer technology, offshore banking, and complex financial mechanisms to facilitate their criminal activity and hide illicit proceeds. An increase in government procurement from industry over the next five years will create opportunities for major fraud. Health care fraud is expected to increase dramatically over the next decade as the aging of the U.S. ...

    Solution Summary

    This solution discusses four questions on the topics associated with multinational market strategies, such as market entry strategies, trade barriers and countertrade. Supplemented with two highly informative articles e.g. coping with corruption in foreign markets and countertrade issues.