Exporting and Trading info

Case: Disneyland Abroad In 1984 Tokyo Disneyland completed its first year of operations after five years of planning and construction since the Walt Disney Corporation entered into an agreement with the Oriental Land Company in Japan. More than 10 million people (9 percent from other Asian countries) visited the park, spending $355 million. This was $155 million more than had been expected, largely because the average expenditure per visitor was $30, rather than the estimated $21 per visitor. Tokyo Disneyland thus became quickly profitable. Growth continued, so that by 1990 more than 14 million people visited the park, a figure slightly larger than the attendance at Disneyland in California and about half the attendance at Walt Disney World in Florida. The Tokyo park is in some ways a paradox. Although such firms as Lenox China and Mister Donut had to adapt to Japanese sizes and tastes, Tokyo Disneyland is nearly a replica of the two parks in the United States. Signs are in English...

Summary of International Business:An Overview The cumulative penetration of technological and geographic frontiers, coupled with institutional development, has resulted in a global competitive environment marked by the use of foreign countries as production bases and sales outlets and by a rapid international diffusion of new products and processes. Because of its broad global environment, a number of disciplines (geography, history, political science, law, economics, and anthropology) are useful to help explain the conduct of international business. When operating abroad, companies may have to adapt their methods of carrying out business functions. This is because the environment may dictate the appropriate operational method and because the business forms used for foreign operations may be different from the domestic ones. Among the forms of international business are trade in goods and services, transportation, licensing, franchising, turnkey projects, management contracts...

International Business:An Overview: Looking to the future LOOKING TO THE FUTURE Companies must make decisions today about an uncertain future. If a company waits to see what happens, it is already too late, since investments in research, plant, and training may take many years to complete. The companies that guess right on what the future will bring are the ones that will make investments to produce and sell the type of goods and ^services at a price that customers will be willing to pay. They can produce and sell them in conformity with the rules of the societies where they are operating. But it is not always possible to guess correctly. By postulating different ways that the future may evolve, companies may be better able to avoid unpleasant surprises, even though they are uncertain as to which of the multiple environments they will face. Given the importance of the future, we shall end each chapter with scenarios that present foreseeable ways in which areas may develop.

Direct Investor Description Country ot Origin   One way of describing investors is to look at the origin   of investment by area. More than 95 percent of the value of direct investment ownership is estimated to be in industrial countries.9 Table 1.2 summarizes  the information from industrial countries and illustrates that nearly all recent investment has emanated from just seven countries. The proportion of global value originating in the United States has been falling, whereas the proportion originating in the United Kingdom and Japan has been increasing. There has been some recent growth in direct investment from the developing countries. There are now several hundred LDC direct investors that own several thousand foreign investments. Most of this movement has been from the developing countries that have experienced recent industrialization, such as Hong Kong, Singapore, Mexico, Brazil, and Argentina.10 At the end of 1989 foreign direct investment in the U...

RECENT DIRECT INVESTMENT PATTERNS:Move to Direct Investment Until the emergence of international firms, all private foreign investments were portfolio investments rather than direct investments. The push to direct investment began in the 1920s, but even then, portfolio movements were about double the direct ones. During the Depression of the 1930s it became obvious that portfolio investors, especially those from the United States who were the main suppliers of foreign capital, had chosen foreign projects unwisely. Direct investments fared much better and their value recovered somewhat in the late 1930s.8 Since World War II, direct investment by U.S. firms has grown substantially. Direct investment by firms from other industrial countries grew slowly for a number of years after World War II. During this time, firms from those countries were busy rebuilding their domestic markets and were short of funds to invest on the outside. Since about 1965, their direct investment positions have...

Political Relationships  Political and Economic Blocs  A bloc is a group of nations united by treaty or agreement for mutual support or joint action in a variety of areas. As a     result of the political schism after World War II between the communist and      noncommunist countries, only a very small percentage (about 5 percent) of total world trade was conducted between the two blocs. Direct investment between the groups was negligible because of restrictions by communist countries on private ownership, particularly foreign ownership. Many of the communist countries, however, are in the process of instituting market economies and are building affiliations to the noncommunist countries, especially in Western Europe. Consequently, many observers are optimistic that business between the two groups will increase substantially. Since the 1950s several groups of countries have banded together and removed most trade restrictions among themse...

Wars and Insurrection Military conflicts disrupt traditional international business patterns as partic- ipants divert their transportation systems and much of their productive ca- pacity to the war effort. In addition, political animosity and transport difficulties may interfere with trading channels. For example, Iraq's interna-  tional trade fell sharply after its 1990 invasion of Kuwait as other countries either severed trade relations or disrupted supply lines. The composition of trade changes because of a shift from consumer goods to industrial goods that can be used in meeting military objectives. International investment is disrupted because foreign-owned plants are frequently destroyed or expropriated. There is little capital available to move abroad, and even if there were, uncertainties and political regulations would prevent it. Increased global interrelationships lend far-reaching impact to today's military conflicts. A particularly notable example was t...

The Competitive Environment Each company and each industry has a different competitive environment, which may vary from one country to another. As a result, some firms may be better able to take advantage of foreign opportunities than others. Some firms may also have to deal much more with foreign competition than others within their domestic markets. The most appropriate form of international business opportunity, such as exporting versus licensing, may differ among firms and products, as well as among the countries in which the business is undertaken. Some of the most important factors are shown in Fig. 1.1 and will be discussed in later chapters. Some trends that are affecting the nature of international competition are briefly explained in the following section. Shrinkage of Time and Space A traditional difference between interna- tional and domestic business is that international forms usually encompass greater distances. Greater distance usually increases operating costs ...

Service Exports and Imports Service exports and imports are international earnings other than those derived from goods sent to another country. Receipt of these earnings is considered a service export, whereas payment is considered a service import. Services are also referred to as invisibles. International business comprises many different types of services. Travel, Tourism, and Transportation  When prints of Return of the Jedi were sent from the United States to be shown in Japan, they traveled internationally as did the Star Wars actors when they went to Australia to publicize the film. Earnings from transportation and foreign travel can be an important source of revenue for international airlines, shipping companies, reservations agencies, and hotels. On a national level, such countries as Greece and Norway depend heavily on revenue collected from carrying foreign cargo on their ships. The Bahamas earns much more from foreign tourists than it earns from exporting merchan...