Chapter 4 Review and Applications

Chapter 4
2.1
Pros of this venture would possibly be an increase in sales, broader reach of their products, more recognition around the world, new opportunities for innovation.
Cons could be that it could be costly to adapt products to the needs of the new areas they are reaching as well as limitations drawn up to regulate trade of such products.
4.2
The US Commercial Service can help companies wanting to enter the international market by providing advocacy, counseling, platinum key service which provides support to achieve your goals as a company, assist in market research, help in finding international business partners, as well as assisting in finding trade events and other related services.

4.3
Joint ventures can be beneficial because it can be relatively inexpensive, quick and a way to gain added expertise. Joint ventures however can be risky as well. Some joint ventures fail leaving the partners in a rut, others are bought out by their respective partner, and sometimes partners have difficulty agreeing on practices and major decisions.
4.4
Direct investment is considered risky because direct investors have a controlling interest or a large minority interest in the firm which could lead to the greatest potential risk as well as the greatest reward.
5.3
Exchange rates can affect a firm’s global sales because if the value of the currency depreciates the cost goes up for that good which may deter buyers from purchasing that product and go for a less expensive version that has not been imported.