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Michelin Tyres

China and India - International trade

Because of China paying an export subsidy of 50% of all its firms electricity it has made it cheap for them to produce things. 

Michellin Tyres is suffering because it cant keep up with prices from Chinas imports

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Social responsibility

Del- Plant a tree for each computer sold to carbon offset

Fair trade - their product market share growing rapidly in UK by about 33%

Body shopStuck to the original mission statement to avoid animal testing, however sold to Loreal, who test on animals 

Marks and Spencers - Using free range eggs, commited to being carbon neutral by 2012

GAP- Accused of using child labour

BAT- sell tobacco in Indionesia and supply 3 million jobs so hard to control

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Carbon miles

UK food imports- 95% of the UK's food is imported, most of it on planes which create carbon miles. This is for greater consumer choice, cheaper food, however it is at the expense of the environment and some local farmers

Kenyan beans- Barely any carbon foot prints to produce and taken to UK on passenger planes, which would fly anyway

Young's fly Scottish prawns- They're caught in Scotland, sent to South East Asia to be processed and then flown back to the UK to sell. This creates low costs but carbon foot print

Egyptian potatoes- we can't grow potatoes in the UK so is useful, but they're using non-renewable water and are travelling 11,000 miles 

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Marketing

India- Indian products tend to need an Indian celebrity marketing endorsement from Bollywood or cricket stars

Mercedes and Gucci- have a global marketing strategy

General motors- have a different brand name and marketing strategy for each major market

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Globalisation

Singapore- Encouraged multinationals and experienced rapid growth, theire wage rates are now higher than the UK. 

Nike- Often accused of taking advantage of developing economies with sweat shops in countries such as the Phillipeans paying low wage rates and not as strict regulations as Western cultures. Nike also move from country to country to avoid tax and they often pay higher wages and better conditions than local firms, no one is forced to work for Nike 

Premium pricing- The Body Shop, Starbucks and CO-OP pay high prices to produce from developing economies in order to promote 'fair trade' and be socially responsible 

McDonalds- Spreading throughout the world, jobs are created but there will be a loss of culture and local businesses may Close 

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Locating abroad

Dyson- Was a profitable UK business, not stakeholder friendly, moved to Malaysia to lower costs even when they were doing well and not at threat

Play.com- Located in Jersey to avoid tax

China- 800 million Chinese people earn less than £1 per day, now wages are increasing rapidly and some products may now be competitively made in the UK again

US- Many firms relocating from China to Mexico (NAFTA)

Toyota- Set up in Derby to get into the single market 

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Consumer taste- foreign market

McDonalds- Use chicken and vegetarian tikka burgers in India (Global localisation)

Tesco- In Japan people tend to shop daily for fresh food making the food hypermarket an unrealistic business model, need chains of small local shops required, so introduced Tesco Local Model

China- Fresh fish means live fish 

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International brands

Mercedes- Has a luxury good and an international brand sold in all their over sea markets

General Motors- Produce cars aimed at more local markets with local brand names and designs: Vauxhall (UK), Opel (Germany), GM (USA) 

Aldi and Lidll- Have dominated the UK markets with low prices. This has taken Tescos customers and forced them to lower prices, they now have a reduced profit margin and have a loss 

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China and trade balances

China & Germany has the world's largest trade surplus and the USA followed by the UK has the largest trade feficit 

The Yuan is kept artificially low in order to give their exporters an advantage of foreign firms

China's has a large surplus which should increase the purchasing power and living standards of its citizens. Most of the surplus is going into the Chinese Investment bank which now has a 2&1/2 trillion dollar budget. It is using the money to buy up foreign firms (the USA has now banned them)

It is now the world's second largest car market which emphasises the countries growing internationally importance as a market 

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Outsourcing call centres

Barclays- moved its call centres to India to reduce costs

NatWest- Advertises as a USP that all its call centres are UK based

Aviva- Uses call centres in India for some functions, but UK call centres for more sensitive customer interactions 

Powergen- Have closed all its Indian call centres and moved back to the UK after customer dissatisfaction

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Protectionism

Tariffs

EU- Imposes a 15% tariff on shoes from China

India- 58% tariff on imports of luxury goods

China- 300% tariff on cars

Quota

EU- Strict quotas on Chinese imported candles to prevent dumping to protect European producers but there is a transfer payment from European retailers such as TKMax and European consumers who will lose out 

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Trade liberalisation

It is estimated that trade liberalisation would result in a $170 bn boost to the world economy

Trade liberalisation results in Globalisation

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Foreign agents

Most car companies such as Ford will use foreign agents to sell their cars over seas 

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Backward innovation

Wind up radios- A radio that is powered by a wind up mechanism, it means radios can be used in poor areas where there's no access to electricity. 

Volks wagen- Selling and producing older models in Mexico

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WTO

Total of 153 member in WTO

Replaced by GATT in 1994 

Agree to reduce tariffs, quotas and protectionism 

China has now joined the WTO, h/w this does not mean that it has opened up its markets and has still got tariffs and joint ventures - the WTO is not able to legally enforce its decision

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Cultural differences

Nestle- Attempted to sell baby food in Africa using the same labelling as at home, it had a picture of a baby with the slogan explaining the type of baby food. The African consumers mistakened it for having babies in the food = no sales.

General motors- The model "Nova" didn't sell in Spain because "no va" means "doesn't go"

Japan- They performed extensive market research and gave the Japanese free samples of Danone yoghurt and asked to fill in a questionnaire, the answers were positive so the company went ahead and launched it but it failed.They didn't understand that the Japanese dislike to critisise openly and try to please by telling people what they think they want to hear

BAT- Selling in Indionesia because there are no restrictions on smoking or advertising. In England there is a ban on displaying ciggarettes and ban on advertising them 

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Expanding abroad

Britain- 99.5% of he world's population lies outside Britain, hence the biggest scope for expansion lies in international markets rather than domestic ones

EU- A good option is to enter developing economies in the EU that have less intense competition, with no trade barriers and and relatively underdeveloped retail markets eq Hungary and Poland 

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Mother Care

Expanded rapidly abroad, its non UK sales has risen by 50% a year compared with its UK growth of just 1%. It now has more stores abroad than in the UK

Mothercare looked towards smaller, emerging economies including Poland, Bulgaria and the Czech Republic and has avoided USA entirely

It has exploited the smaller growing economies by using local knowledge- it opened 77 franchised stores in 2008 and delegated key decisions on how to run the stores to local bus people. 

It has opened a new product development centre for its Early Learning Centre divison in Hong Kong to be certain its new products meet the need of an international market

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China

Lenovo- The world's second largest computer manufacturer and they're no longer copying Western designs & are innovating

B&Q- now the market leader in China, they're the largest DIY chain in China 

China mobile- the world's largest mobile phone company in terms of subscriber numbers

Businesses with ability to become market leaders- Haire group, China mobile & China south airlines with the correct international marketing and promotion scheme 

Chinese investments- British power generation

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Global localisation

McDonald's- Serving vegetarian burger and curry flavouring them in India, no beef 

General Motors- In USA they make large poorhandling cars. Opel in Germany and Vauxhall in UK which are smaller fuel efficient good handling cars becuase in UK roads have corners and bends where as the USA has large straight roads 

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Synergy- Joint ventures, takeovers and mergers

RBS- Alliance with Banco Santander of Spain to provide banking services throughout Europe

BA- Merged with Iberia which had an estimated saving of £450 million over first 5 years as they had one headquarters instead of two. 

Tesco- Took control of Hymal which gave them acess to prime sites, customer focused local knowledge such as taste or culture of a firm, supply and distribution chains already. Tesco brings a reap of economies, marketing expertise, financem successful bus model. 

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Pressure groups

Starbucks- Were boycotted for avoiding tax and got people to write names on cups as the 'tax' payer. At an event on an ice ring in London, they were asked to tweet messages to family and friends to appear on a screen, but instead insulted Starbucks. It resulted in a 20% fall in sales.

PG Tips- Destroyed rain forrests to plant tea and because pressure group had to stop destroying them, paying workers more, provide health care and education to workers

McDonalds- 'Super size me' resulted in using chicken breast for nuggets

Nike- Have not been effected by the actions of pressure groups

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