4-6 Free Trade NAFTA: North american free Trade As greement Abolishes most tariffs on goods traded between Mexico. Canada and the U.s Allows unrestricted cross-border flows of resources Many U.s. firms have now invested in Mexico This is a manufacturing opportunity. Wage costs are lower in Mexico Can serve Mexico with a plant in Mexico and reduce freight o Managers face new opportunities and reats。 " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 4-6 Free Trade NAFTA: North American Free Trade Agreement. ◼ Abolishes most tariffs on goods traded between Mexico, Canada and the U.S. ◼ Allows unrestricted cross-border flows of resources. ◼ Many U.S. firms have now invested in Mexico. ⚫This is a manufacturing opportunity. ◼ Wage costs are lower in Mexico. ◼ Can serve Mexico with a plant in Mexico and reduce freight. ⚫Managers face new opportunities and threats
4-7 Global Task Environment Figure 4.2 Suppliers Forces yielding CompetitorsOpportunities Distributors and threats Customers " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 4-7 Global Task Environment Suppliers Distributors Customers Competitors Forces yielding Opportunities and threats Figure 4.2
4-8 Suppliers distributors o Managers buy products from global suppliers or make items abroad and supply themselves. Key is to keep quality high and costs low o Global outsourcing: firms buy inputs from throughout the world GM might build engines in mexico. transmissions in Korea and seats in the u. s Finished goods become global products o Distributors: each country often has a unique system of distribution. Managers must identify all the issues " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 4-8 Suppliers & Distributors ⚫Managers buy products from global suppliers or make items abroad and supply themselves. ◼ Key is to keep quality high and costs low. ⚫Global outsourcing: firms buy inputs from throughout the world. ◼ GM might build engines in Mexico, transmissions in Korea, and seats in the U.S. ◼ Finished goods become global products. ⚫Distributors: each country often has a unique system of distribution. ◼ Managers must identify all the issues
4-9 Customers Competitors e Formerly distinct national markets are merging into a huge global market True for both consumer and business goods Creates large opportunities Still. managers often must customize products to fit the culture. McDonald's sells a local soft drink in brazil o Global competitors present new threats. Increases competition abroad as well as at home win/MeGraw-Hill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 4-9 Customers & Competitors ⚫Formerly distinct national markets are merging into a huge global market. ◼ True for both consumer and business goods. ◼ Creates large opportunities. ⚫Still, managers often must customize products to fit the culture. ◼ McDonald's sells a local soft drink in Brazil. ⚫Global competitors present new threats. ◼ Increases competition abroad as well as at home