List and describe the forces affecting local integration and global marketing
What will be an ideal response?
The forces affecting local integration and global marketing are (a) Multilateral Trade Agreements such as NAFTA which has expanded trade among the United States, Canada, and Mexico; (b) converging market needs and wants and the information revolution: the development of technology has a considerable impact on the market needs and wants; (c) transportation and communication improvements: the technology for transportation and communication is changing rapidly; (d) product development costs: new products require major investments and considerable time; (e) world economic trends: growing economies worldwide have an impact on global marketing; and (f) leverage: it is an advantage that a company enjoys by virtue of having experience in more than one country.
You might also like to view...
In order to prevent a licensor-competitor from gaining unilateral benefit, licensing agreements should provide for:
A) contract manufacturing. B) franchising. C) cross licensing. D) strategic decision making. E) adaptation for local tastes.
Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances
Indicate whether the statement is true or false
If a firm were to earn exactly its cost of capital, we would expect the price of its common stock to
remain unchanged. Indicate whether the statement is true or false
Lee Iacocca, chairman and CEO of Chrysler Corporation, announced on January 27, 1988, that the automaker would be closing its Kenosha, Wisconsin, plant. Iacocca and his board of directors were under significant pressure from shareholders due to Chrysler's continuing poor financial performance. Chrysler had acquired the Kenosha plant when it purchased American Motors Corporation in 1987 . In his
announcement, Iacocca blamed national trade policy for Chrysler's declining sales and resultant earnings problems. At the Kenosha plant, which manufactured the Dodge Omni and the Plymouth Horizon, 5,500 of the 6,500 workers were to be laid off and production moved to a Detroit plant. Kenosha, a city of 77,000 on the shores of Lake Michigan, depended heavily on Chrysler's presence. The announcement of the closing came at a critical time. Chrysler was negotiating to renew its contract with the United Auto Workers (UAW). Also, the Kenosha plant carried a history of union financial assistance. The UAW had loaned American Motors over $60 million to keep the Kenosha plant running, and Chrysler had assumed the loan obligations as part of the acquisition. Also, Wisconsin had paid $5 million for job training at the Kenosha plant in 1987 after Chrysler promised that the plant would build Omnis and Horizons for at least five more years. Peter Pfaff, a member of the UAW Local 72 of Kenosha and an employee at the plant since 1972, said: "I was there. We've got it on tape and in writing. They said they'd stay. Greenwald (then Chrysler Motors chairman) keeps saying Chrysler never said that, but I was there when he said it.". The Kenosha local threatened to delay negotiations on renewing the national contract with 64,000 workers. After the threat, Iacocca announced that Chrysler would establish a $20 million trust fund to aid the 5,500 Kenosha workers through housing payments and educational funding. This fund would be in addition to severance pay, extended unemployment benefits, and repayment of the UAW loans. While denying that Chrysler was setting a precedent, Iacocca declared it had a "moral obligation" to Kenosha. Wisconsin threatened to sue Chrysler over the job training program but agreed to hold off in exchange for Iacocca's promise to extend production at the plant for several months into the fall of 1988. Iacocca stated that Chrysler was "guilty as hell of being cockeyed optimists. Blame us for being dumb managers, for spending $200 million to put two old cars (the Chrysler Fifth Avenue and the Dodge Diplomat) in an eighty-six-year-old plant, but please don't call me a liar when I've got to close it sooner than I thought.". Iacocca sought congressional support for converting the Kenosha plant to defense work by Chrysler. Chrysler and the UAW negotiated a contract that provided additional unemployment benefits for the 5,500 laid-off workers and more job security for the 1,000 workers who would transfer to other Chrysler operations. Ultimately, the plant closing resulted in 3,700 layoffs. By mid-1990, Kenosha was enjoying unprecedented economic growth. At a July 1990 ceremony in which engineers detonated explosives to destroy the 250-foot-high smokestack of the Chrysler plant, dignitaries and former workers cheered. Kenosha resident T. R. Garcia said at the blasting, "I think it's about time they got rid of it. What we need to do is develop the lake front, and this thing is the last to leave.". City planner Ray Forgianni, Jr., added, "The community's image is probably the best it's been in 100 years. The closing was almost like a catalyst. The handwriting was on the wall-the economy needed to diversify.". a. Did Chrysler have a moral obligation to the Kenosha workers and Wisconsin, or was it just responding to pressure? b. Do arrangements like Chrysler had with the UAW loans and Wisconsin interfere with the ability to make business decisions? Review Iacocca's quote on business mistakes as you evaluate the issue. c. Were the shareholders required to pay twice for the closing - once in severance pay and again in extended benefits? d. Was Chrysler simply putting its duty to shareholders above its duty to Wisconsin, Kenosha, and its workers? Is this proper? Is it ethical? e. Was Chrysler's action just a catalyst for needed economic development? f. Iacocca, after having stepped down as chairman of Chrysler, made a takeover offer for Chrysler in 1995 . What would Chrysler's ethical culture be like if Mr. Iacocca had succeeded in his takeover bid?