Pengantar Bisnis (Introduction to Business) - Sesi 3

Summary

This video introduces global business competition and the importance of international trade. It explains concepts like free trade, comparative advantage, and trade balance. The video also explores various strategies for companies to enter the global market, including licensing, franchising, contract manufacturing, joint ventures, strategic alliances, and foreign direct investment. Real-world examples from companies like McDonald's, Adidas, and Nike are used to illustrate these strategies. The video concludes by summarizing key takeaways and encouraging further learning in the field of business.

Takeaways

• 😀 Global markets are crucial for business growth, allowing countries to access a variety of goods and services through trade.
• 😀 Free trade enables countries to have a comparative or absolute advantage by facilitating efficient production and exchange of goods and services.
• 😀 Imports refer to the buying and entry of goods or services from other countries, while exports involve selling goods or services to other countries.
• 😀 The trade balance is calculated by subtracting the value of imports from exports, while the balance of payments includes exports, imports, and other financial flows like tourism and investments.
• 😀 Companies can enter international trade through six strategies, including export licenses, franchising, contract manufacturing, joint ventures, strategic alliances, and foreign direct investment.
• 😀 Licensing allows a company to grant another company the right to produce goods or services in exchange for commissions or royalties, exemplified by companies like Vanko and Disney Marvel.
• 😀 Exporting can be done either directly or indirectly, and it’s a common strategy for companies like PT Mayora Indah, which produces food and beverages for global markets.
• 😀 Franchising involves selling the rights to use a company’s brand and sell its products, with companies like McDonald’s adapting to local markets, such as offering pork-free products in Indonesia.
• 😀 Contract manufacturing enables companies to outsource production, allowing them to enter new markets without large investments, as seen with Adidas and Nike manufacturing in countries like China and Vietnam.
• 😀 Joint ventures involve collaboration between two or more companies, sharing business risks, expertise, and access to local markets to facilitate international expansion.
• 😀 Strategic alliances are long-term partnerships where companies work together to gain a competitive advantage, without directly sharing management risks or profits, and benefit from pooled resources and expertise.
• 😀 Foreign direct investment (FDI) involves purchasing or establishing business facilities abroad, allowing companies to control technology and expertise, but requires significant investment and management commitment.

Q & A

What is the importance of the global market in business competition?

The global market allows countries to specialize in producing goods and services efficiently based on their unique resources or technology. It promotes trade, enabling countries to exchange products and services, benefiting from free trade without economic or political barriers.

What is the concept of free trade?

Free trade refers to the movement of goods and services between countries without any economic or political barriers, allowing countries to produce goods efficiently and trade them with others that can produce other goods more efficiently.

What is the difference between comparative advantage and absolute advantage?

Comparative advantage occurs when a country can produce a product more efficiently than another, allowing it to trade with other countries that are more efficient in producing other goods. Absolute advantage refers to when a country can monopolize the production of a good or service or produce it more efficiently than any other country.

What is the trade balance, and how is it calculated?

The trade balance is calculated by subtracting the value of imports from the value of exports within a given period. A positive balance indicates more exports than imports, while a negative balance means the opposite.

What are imports and exports?

Imports refer to the goods and services a country buys from other countries, while exports refer to the goods and services a country sells or distributes to other countries.

What are the six types of strategies companies use to engage in international trade?

The six strategies are: export licenses, franchising, contract manufacturing, joint ventures, strategic alliances, and foreign direct investment. These strategies vary in risk, control, commitment, and potential profits.

How does the licensing strategy work in global trade?

Licensing involves a company granting permission to a foreign company to produce its goods or services in return for royalties or commissions. An example is the company that holds the license to produce Disney or Marvel toys.

What is the role of franchising in global trade?

Franchising allows a company to sell the rights to use its name and sell its products or services in a specific region. For example, McDonald's adapts its menu to local tastes and cultural preferences, like serving pork-free options in Indonesia.

How does contract manufacturing help companies enter the global market?

Contract manufacturing involves a foreign company producing goods for another company, which then brands them. This allows companies to enter new markets without the significant costs of building production facilities, making it easier to meet short-term demand increases.

What is the difference between a joint venture and a strategic alliance?

A joint venture involves two or more companies collaborating on a specific project, sharing risks, technology, and management expertise. A strategic alliance is a long-term partnership that allows companies to jointly create competitive advantages without directly sharing profits or management risks.

What does foreign direct investment (FDI) entail in the context of global business?

Foreign direct investment (FDI) involves a company investing in business properties or facilities in a foreign country, allowing it to fully control operations and technology. This strategy requires significant investment and comes with higher commitment.