Global Marketing: Political & Legal Environment Analysis - Coursework

This report delves into the political and legal environments crucial for global marketing success. It examines political risks, including government subsidies, ownership restrictions, and economic performance, offering strategies to minimize them. The report discusses the role of organizations like OPIC and outlines the significance of international and host country laws. It highlights the importance of intellectual property protection, addressing patent and copyright issues, alongside factors that contribute to violations and strategies to protect intellectual property, including the TRIPS agreement. The report emphasizes the challenges and opportunities in navigating the global market's complex political and legal landscapes, providing valuable insights for businesses operating internationally.

Managing Global Marketing
Chapter: 04 – Political & Legal Environment

Political – Ideological Forces
Why North Korea & South Korea are devided.
 Capitalist- free market (supply and demand USA)
 Controlled economies ( Russia)
 Centrally planned economies (Sri Lanka, Singapore)

Political Risk
Political risk is defined as being: a risk due to a sudden or
gradual change in a local political environment that is
disadvantageous or counter productive to foreign firms and
markets
I. Government subsidies
II. Ownership restrictions
III. Operating conditions
IV. Boycotts of firms
V. Takeovers

Political Risk Signals
 Poor economic performance
 Repression of ethnic groups and/or general repression by
the elite
 Internal diversity and incongruent interests
 Radically changing government structures
 Fierce nationalist sentiment

Minimizing Political Risk
 Understand both ruling and opposition parties.
 Remain politically neutral.
 Be exemplary corporate citizens.
 Sell a quality product or service that is essential for local
development.
 Partner with local companies and create local expertise.
 Use local suppliers.
 Minimizing assets at risk
 Obtain insurance coverage against expropriation,
nationalization, confiscation, and terrorism

Insurance to Minimize the Risk
 Overseas Private
Investment Corporation
OPIC assists U.S.
companies by providing
 financing
 political risk insurance,
 and investment funds.
 OPIC was established as
an agency of the U.S.
government in 1971 and
currently does business
in over 150 countries.
Types of Coverage
Currency Inconvertibility
Expropriation
Political Violence
Standalone Terrorism
Special Coverages
Small Business Coverage

International Legal Environment
 International Laws
 Host Country Laws
 Home Country Laws
 Legal Systems
 Common law
 the part of English law that is derived from custom and judicial precedent rather
than statutes
 Code (Civil) law
 Specified & comprehensively written rules & regulations
 Islamic law

Jurisdiction
 Not automatic, legal power to make decisions
 In EU: European Court of Justice
 Between Governments (UN): The International Court of Justice
 Between international enterprises: host- or home- or third country
Mediation Arbitration
Independent third party Independent third party
Non binding Binding
Instead of a
lawsuit

Intellectual Property Rights
 Violation of intellectual property rights is a significant
threat to the competitiveness of international
corporations.
 Losses attributed to the violation of intellectual property
rights are estimated to be $60 billion a year. (e.g.
Software $11 billion, entertainment $8, pharmaceuticals
$1 billon)
 There is a saying in Shanghai: “We can copy anything
except your mother” (even fake blood plasma)

Intellectual Property Protection
 Patent
 Protection of the rights of the inventor or of the firm to use and
sell the invention for a specified period of time.
 Copyright
 Rights of owner of original work of art (literature, music, film,
design) to reproduce, sell, perform, or film the work.

Factors Influencing Intellectual Property
Violations
 Lack of appropriate legislation
 Lack of enforcement
 Unavailability of authentic products
 High prices for authentic products that limit their accessibility to
local consumers
 Cultural Factors:
 Values that perceive imitation as a form of flattery
 Feelings of interpersonal distrust and not getting fair deal
 Emphasis on material wealth
 Belief that technology is common domain
Dana-Nicoleta Lascu Atomic Dog Publishing 2006