International Marketing - highly recommended marketing background tutors

It regulated trade, managed the flow of people into and out of its boundaries, and exercised undivided jurisdiction over all persons and property within its territory. It had the right, authority, and ability to conduct its domestic affairs without outside interference and to use its international power and influence with full discretion.” Richard Stanley President, Stanley Foundation https://www.youtube.com/watch?v=0EggqmMixig&t=8s Political Risk • Risk of change in political environment or in government policy that would adversely affect a company’s ability to operate effectively and profitably When perceived political risk is high, a country will have a difficult time attracting foreign direct investment . https://www.youtube.com/watch?v=7XWekWmF4QQ Political Risk Among Asean countries, the highest political risk revolves adverse regulatory changes/creeping expropriation http://rmid -oecd.asean.org/project -risks -mitigation/project -risks/political -risks/main -political -risks -in-southeast -asia/ Political Risk http://rmid -oecd.asean.org/project -risks -mitigation/project -risks/political -risks/main -political -risks -in-southeast -asia/ Taxes • Government taxation policies – High taxation can lead to black market growth and cross - border shopping • Corporate taxation – Companies attempt to limit tax liability by shifting location of income A ccording to the OECD, the country with the highest national income tax rate is the Netherlands at 52 percent, more than 12 percentage points higher than the U .S .top federal individual income rate of 39 .6 percent .Among G -7 countries, only the U .S .has a worldwide tax system . Among OECD nations, 26 have territorial systems including Australia, Canada, France, Germany, Japan, Spain, and the United Kingdom . Eight OECD nations have worldwide systems, including the U .S ., Greece, Ireland, South Korea ,and Mexico Seizure of Assets • Government takeover of corporate assets . • Expropriation is the seizing of private property by the government for the purpose of using that property for a purpose that was supposedly benefit the general public. • Confiscation to take a possession away from someone when you have the right to do so, usually as a punishment and often for a limited period, after which it is returned to the owner Minimizing expropriation risk ensures there is local equity investment in projects and to borrow money from local banks – so that there is local skin in the game, so to speak, should a contentious nationalization occur https://unctad.org/system/files/official -document/unctaddiaeia2011d7_en.pdf Seizure of Assets • Nationalization – a government takes control of some or all of the enterprises in an entire industry – Acceptable according to international law if: • satisfies public purpose • includes compensation Some nationalizations take place when a government seizes property acquired illegally. For example, in 1945 the French government seized the car -maker Renault because its owners had collaborated with the 1940 -1944 Nazi occupiers of France. Seizure of Assets • Creeping expropriation – limits economic activities of foreign firms . The continual restriction of private property rights gradually over time by a government . Creeping expropriation involves legislation, regulation, and taxation, which together over time make it difficult for a person or business to own property . In the mid -1970s, Johnson & Johnson and other foreign investors in India had to submit to a host of government regulations to retain majority equity positions in companies already established. Many of these rules were copied by Malaysia, Indonesia, the Philippines, Nigeria, and Brazil. By the late 1980s, after a “lost decade” in Latin America characterized by debt crises and low GNP growth, lawmakers reversed many of these restrictive and discriminatory laws. The end of the Cold War contributed significantly to these changes.

It is difficult to reclaim expropriated property. U.S. courts will not get involved if foreign governments are involved. Companies can seek recourse through the World Bank Investment Dispute Settlement Center. It is possible to purchase expropriation insurance from private companies or a government agency such as OPIC. Quiz 1 Pls click and answer the questions provided ☺ https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3z6MP 1lK_wGBdd4j5HjFi0nHkGJSFUNFEzMzhYQlo2Q1pDTzdFMlNMQlVVNVpDVy4u International Law • Is a system of treaties and agreements between nations that governs how nations interact with other nations, citizens of other nations, and businesses of other nations. Disputes between nations are issues of public international law – World Court or International Court of Justice (ICJ); – Judicial arm of the United Nations The Court, whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply: a. international conventions, whether general or particular, establishing rules expressly recognized by the contesting states; b. international custom, as evidence of a general practice accepted as law; c. the general principles of law recognized by civilized nations; d. subject to the provisions of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law International Court of Justice • Judicial arm of the United Nations founded in 1947 • Settles disputes between nations – International conventions – International custom – General principles of law Peace Palace, ICJ, The Hague, Netherlands List of ongoing cases between countries https://www.icj -cij.org/en/pending -cases Common Law vs. Civil Law • The Napoleonic Code of 1804 drew on the Roman legal system and is the basis for continental European law today. Code law is also known as civil law. • U.S. law is rooted in English common law. Common Law vs. Civil Law • Common Law • Disputes are decided by reliance on the authority of past judicial decisions • Companies are legally incorporated by state authority • Code law is used in only a few areas; the U.S. Uniform Commercial Code fully adopted by 49 states, Louisiana still influenced by French civil law • Asian countries are split. India, Pakistan, Malaysia, Singapore, and Hong Kong are common -law countries. Many countries that were colonized up Europeans continue the legal systems imposed upon them. i.e., Singapore and Hong Kong were British colonies and have a common law system. • Civil Law • Legal system reflects the structural concepts and principles of the Roman Empire • Companies are formed by contract between two or more parties who are fully liable for the actions of the company • Japan, Korea, Thailand, Indochina, Taiwan, Indonesia, and China are civil -law jurisdictions. • The majority of countries today have civil -law systems. • Former French colonies, like Niger and Guyana have civil law systems. Scandinavian countries ( Denmark, Norway and Sweden, Finland, Iceland) use parts of both systems Islamic Law • Legal system in many Middle Eastern countries • Sharia – a comprehensive code governing Muslim conduct in all areas of life, including business – Koran – Holy Book; like code law – Hadith – like common law • Based on life, sayings, and practices of Muhammad • Identifies forbidden practices “ haram ” Any Westerner doing business in Malaysia and in the Middle East should have, at minimum, a rudimentary understanding of Islamic law and its implications for commercial activities . Brewers, for example, must refrain from advertising beer on billboards or in local -language newspapers . Sidestepping Legal Issues • It is important to understand jurisdiction of host -country courts ; for instant employees of foreign companies working in United States must understands that United States courts have jurisdiction on how the company can demonstrated to be on doing business • Get expert legal help • Prevent conflicts – Establish jurisdiction – Protect intellectual property – Protect licenses and trade secrets – Avoid bribery Jurisdiction • Refers to a court’s authority to rule on particular types of issues arising outside of a nation’s borders or to exercise power over individuals or entities from different countries. • Employees of foreign companies should understand the extent to which they are subject to the jurisdiction of host -country courts. • Courts have jurisdiction if it can be demonstrated that the company is doing business in the state in which the court sits. Revlon sued a British company, UOL, for breach of contract in a federal court in New York.

UOL claimed the court lacked jurisdiction. Revlon cited the presence of UOL’s name on an office building in the city in which the company had 50% ownership. The judge ruled against the motion to dismiss. Quiz 2 Pls click and answer the questions provided ☺ https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3z6 MP1lK_wGBdd4j5HjFi0nHkGJSFUQldZQ1hCNk00UDdSSlRNMTE0WE9VVkVL Vy4u Intellectual Property • Intellectual property must be registered in each country where business is conducted – Patent –gives an inventor exclusive right to make, use, and sell an invention for a specified period of time – Trademark –distinctive mark, motto, device, or emblem used to distinguish it from competing products – Copyright –establishes ownership of a written, recorded, performed, or filmed creative work Infringement of Intellectual Property • Counterfeiting – unauthorized copying and production of a product • Associative Counterfeit/Imitation – product name differs slightly from a well -known brand • Piracy – unauthorized publication or reproduction of copyrighted work Infringement of Intellectual Property Protecting Intellectual Property • In the U.S., registration is with the Federal Patent Office • In Europe, applicants use the European Patent Office or register country -by -country • Soon the Community Patent Convention will cover 27 countries European patents are expensive because of the need to translate technical documents into all of the languages of the EU. A Tale of Two Budweisers Protecting Intellectual Property • World Intellectual Property Organization – Governed by the Madrid Agreement and the Madrid Protocol – Allows trademark owners to seek protection in as many as 74 countries with a single application and fee Companies sometimes find ways to exploit loopholes or other unique opportunities offered by patent and trademark laws in individual nations .Sometimes, individuals register trademarks in local country markets before the actual corporate entity files for trademark protection .For example, Starbucks filed for trademark protection in 1997 in Russia but did not open any cafés there .Sergei Zuykov ,an attorney in Moscow, filed a petition in court in 2002 to cancel Starbucks’ claim to the brand name because it had not been used in commerce . Technically, Zuykov was merely taking advantage of provisions in Russia’s civil code ; even though he has been denounced as a “trademark squatter,” he was not violating the law .Zuykov then offered to sell Seattle -based Starbucks its name back for $600 ,000 . Protecting Intellectual Property • International Convention for the Protection of Industrial Property – Paris Convention – Honored by 100 countries – Facilitates multi -country patent registration, ensures that once a company files, it has a “right of priority” in other countries for one year from that date • Patent Cooperation Treaty – Over 100 countries cooperate with patent applications • European Patent Convention – the EU and Switzerland U.S. Companies Receiving the Most Patents, 2009 Quiz 3 Pls click and answer the questions provided ☺ https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3z6M P1lK_wGBdd4j5HjFi0nHkGJSFUQVdXSzdJTkIzNE44V0xWQ1lMRUhNRlNSQy4u Antitrust • Laws are designed to combat restrictive business practices and to encourage competition – Enforced by FTC in the U.S., Fair Trade Commission in Japan, European Commission in European Union – The Sherman Act of 1890 prohibits certain restrictive business practices including fixing prices, limiting production, allocating markets, or any other scheme designed to limit or avoid competition. Law applies to U.S.

companies outside U.S. borders and to foreign companies operating in the U.S. Although antitrust laws are on the books in many countries, they are often weak or loosely enforced. A recent rash of antitru st actions brought in the United States against foreign companies has raised concerns that the United States is violating international law as w ell as the sovereignty of other nations. The U.S. antitrust laws are a legacy of the nineteenth -century trust -busting era and are intended to maintain free competition by limiting the concentration of economic power.

There have been calls for the EU to revamp its approach to antitrust issues and reduce its caseload. Any proposed changes wil l p it modernists against traditionalists. As one European attorney complained, “The commission is putting resources into regulating ca ses that don’t actually restrict competition, which means that the cases that do need to be looked at are not being resolved efficient ly. ” For the past four decades, the competition authority of the European Commission has had the power to prohibit agreements and pra ctices that prevent, restrict, and distort competition. The commission has jurisdiction over European -based companies as well as non -Eu ropean - based ones that generate significant revenues in Europe. The commission can block a proposed merger or joint venture, approve itwith only minor modifications, or demand substantial concessions before granting approval Antitrust Rulings Licensing and Trade Secrets • Licensing is a contractual agreement in which a licensor allows a licensee to use patents, trademarks, trade secrets, technology, and other intangible assets in return for royalty payments or other forms of compensation • Important considerations – What assets may be licensed – How to price assets – The rights granted The licensor may limit the licensee to sell only in its home country in order to avoid direct competition . The licensee may also be required to stop using the technology after the license has expired . The U .S. courts ruled that S.C . Johnson and Co . could not license an insecticide from the German company, Bayer AG .To do so would have allowed Johnson to monopolize the $450 million home market . Licensing and Trade Secrets • Trade secrets are confidential information or knowledge that has commercial value and is not in the public domain and for which steps have been taken to keep it secret • To prevent disclosure, use confidentiality contracts • The Uniform Trade Secrets Act has been adopted by most U.S. states • NAFTA was first international agreement protecting trade secrets • TRIPS, Trade -Related Aspects of Intellectual Property Rights signed by members of GATT Bribery and Corruption • Foreign Corrupt Practices Act – Requires publicly held companies to institute internal accounting controls that would record all transactions – Makes it a crime for a U.S. corporation to bribe an official of a foreign government or political party to obtain or retain business – Prohibits payments to third parties when there is reason to believe it may be channeled to foreign officials • Omnibus Trade and Competitiveness Act – Allows for “grease” payments to cut red tape; i.e., getting shipments trough customs, getting permits The Foreign Corrupt Practices Act (FCPA) is a legacy of the Watergate scandal during Richard Nixon’s presidency .In the course of his investigation, the Watergate special prosecutor discovered that more than 300 American companies had made undisclosed payments to foreign officials totaling hundreds of millions of dollars .The act was unanimously passed by Congress and signed into law by President Jimmy Carter on December 17 ,1977 .After U .S .companies complained that their activities abroad were severely curtailed, President Reagan signed the OTCA in 1988 . However, companies doing business in Central and Eastern Europe, the Middle East, and other parts of the world find that corruption and bribery are widespread . 2010 Corruption Rankings Transparency International ( www.transparency.org ) compiles an annual report ranking countries by Corruption Perceptions Index. Conflict Resolution • Litigation • Formal arbitration – Settles disputes outside of court – Groups agree to abide by panel’s decision • 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) – Most important treaty regarding international arbitration signed by 107 countries The United States has more lawyers than any other country in the world and is arguably the most litigious nation on earth . In part, this is a reflection of the low -context nature of American culture and the spirit of confrontational competitiveness . Other factors can contribute to differing attitudes toward litigation . For example, in many European nations, class action lawsuits are not allowed . Also, European lawyers cannot undertake cases on a contingency fee basis . However, change is in the air, as Europe experiences a broad political shift away from the welfare state . The Regulatory Environment • Agencies, both governmental and non - governmental, that enforce laws or set guidelines for conducting business • Marketing activities affected by international and regional economic organizations – EU – WTO Global companies are realizing they need to hire lobbyists to represent their interests and influence the direction of the regulatory process. In the early 1990s, McDonald’s, Nike, and Toyota did not have a single representative in Brussels, home of the European Commission. Today they have several. Overall, there are about 15,000 lobbyists representing 1,400 companies and nonprofits from around the world there. Quiz 4 Pls click and answer the questions provided ☺ https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3z6 MP1lK_wGBdd4j5HjFi0nHkGJSFUQVI3SFIwS0cxVEtZRDVIT1ZPOFc2VDc5Ry4 u Looking Ahead to Chapter 6 • Global Information Systems and Market Research