Globalization Starting up What do you think globalization mean?Globalization Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. At a top political and economic level, globalization is the process of denationalization of markets, politics and legal systems, i.e., the rise of the so-called global economy. Globalization At a business level, we talk of globalization when companies decide to take part in the emerging global economy and establish themselves in foreign markets. More specifically, globalization refers to the process of internationalizationinternationalization and localizationlocalization.Discussion In your opinion, what are the possible benefits and challenge of globalization for you?a company?Entering new marketsStarting up If you were the CEO of a company, and your company is planning to expand internationally for the first time. What can you do to enter into foreign markets?Entry Strategies Exporting Contractual Arrangements Licensing Franchising Foreign Direct Investment (FDI) Joints Ventures (JV) Wholly Foreign Owned Enterprises (WFOE) Acquisition / Takeover Merger Subsidiary Branch Joint venture Wholly foreign owned enterpriseLicensing vs. FranchisingLicensing Licensing is the transfer of intellectual property from a licenser to a licensee. The property licensed might include patents, trademarks, copyrights, technology, technical know-how, or specific business skills. The usual practice is for the licenser to allow the licensee to use the rights for a specified period of time in return for a royalty, and the licensor is supposed to inspect the operation of the licensee in order to protect its own image.Franchising 特许经营 a type of business, in which, by contract, the franchiser licenses the franchisee to use the trademark, trade name, business format and other business resources; and the franchisee carries on business under the uniform business operation system and pays franchise fees to the franchiser.Franchising A franchise usually covers a broader package of rights and resources such as trademarks, equipment, managerial systems, standardized operating procedures, advertising and promotional materials, product ingredients, loans and financing, etc. Usually, a franchisor must offer a high degree of standardization. Concurrent with this recognizability, the franchisor can and should adapt to local circumstances (localization).Advantages & Disadvantages of FranchisingADVANTAGES Franchiser (parent company) supplies financial, managerial, & marketing assistance Franchising enables small businesses to grow rapidly Franchising risks are lower than those in starting a new business from scratchDISADVANTAGES High cost of purchasing a franchise The franchisee sacrifices independence and creativity Owning franchises provides no guarantee of success Boeing is the worlds leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Boeing has customers in 145 countries around the world, and is the number one U.S. exporter in terms of sales. Headquartered in Chicago, Illinois, U.S.A., Boeing employs more than 159,000 people across the States and in 70 countries, ranked 91 in the Fortune 500 in 2010. Shell is a global group of energy and petro-chemical companies, operating in more than 90 countries, and employ approximately 101,000 people.Shell produces 2% amount of worlds oil and 3% amount of worlds gas, ranking first by Fortune 500 in 2009.