History of Modern Business 2
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| Roots of American Business Abroad -1950s and 1960s | -House income up, 1950s
-Period of civil rights movement, 1960s
-U.S. is producing 40% of all the world's goods
-Manufacturing not in Asia & Europe
-1950s American firms invest overseas in FDI
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| Multinational Enterprises (MNE) & Foreign Detect Investment (FDI) | -Breton-wood system created in 1954 and said American $ would be the central currency that all other currencies would be based on
-Gold fixed at $33 an ounce
-American Goods overseas would be cheaper
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| Cultural challenges to selling overseas | -Firms had to change their product to local tastes and cultural standards
-ex: McDonald's with problems beyond the menu
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| Why sell overseas? | -cheaper labor and real estate
-market penetration - sell where you build
-The sooner a firm can be their the more more likely they are to be excepted as a local good
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| Tex Thornton | -founds Electro Dynamics
-he buys Litton Industry who was making air crafts that he would sell to the military
-he buys up other companies that make transistors for radios, cash register, typewriters, office equipment, ship for leisure activities
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| Vietnam War | -Started in the 1950s with the U.S. supporting the french in Vietnam because they want France on their side during the cold war
-At the Geneva conference Vietnam in split on the 17th parallel
-French say Vietnam want to be communist
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| Cuba/Fidel Castro | -Eisenhower launches operation mongoose, after the Bay of Pigs invasion fails, to assassinate Fidel Castro
-No off the plans to assassinate Castro get to him
-A hot line, with a secrete code, created for communication between the U.S. & the Soviet Union
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| Vietnam War and the American Military Industrial Complex | -You could only learn how to fight from past wars & the Vietnam War involved Guerilla War Fair & fighting in the jungles
-U.S. creates the first shipping containers to transport goods to Vietnam
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| Social & Political Unrest, 1960s | -Vietnam War becomes unpopular with the middle class
-War costing billions $
John F Kennedy's brother & Martin Luther King, Jr were assassinated
-Nixon plans to turn Vietnam over to the local & to support them
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| What caused, inflation & unemployment =, stagflation? | -Vets returning that couldn't find jobs
-Baby boomers are becoming of age & are looking for jobs
-More U.S. $ over seas then the U.S. can pay back in gold
-Rising prices do to inflation
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| Smithsonian Agreement | -The Breton-wood system would end
-The U.S. $would float like other currency
-Gold price was to float causing gold prices to sore
-$ was overvalued & it plumits
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| Nixon | -Elected in 1968
-secret meeting in China to see if they would be receptive to the U.S. meeting with them
-President and first lady go to visit China, and Moscow
-Opens the door to China
-Wins election of 1972 by a landslide
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| Watergate | -People who work for the commission to elect the next president break into Watergate
-Gerald Ford replaces Nixon after he resigns
-Nixon resigns after the Republican party says they can no longer support him against congress
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| Oil Crisis of the 1970s | -Egypt & Syria launch a surprise attack on Israel in 1973
-U.S. supports Israel & gives them access to satellite intel
-OPEC raises prices to all countries & puts an embargo on oil to the U.S.
-U.S. gas doubles in price
-People switch to Japanese cars
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| Ohio, 1968 | -Sets up a trade office in Japan that becomes a failure
-The office switches from advertising Ohio products to trying to get companies to invest in Ohio
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| Soichiro Honda | -Invents Honda
-Learns how to fix cars after the Kanto earthquake
-After WWII he puts generators on old generators on bikes
-He sells scooter and then motorcycles
-In the 60s he builds the 1st Honda car
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| Toyota | -Largest auto manufacturer in Japan in 60s and in the world today
-During the Korean War Toyota build jeeps & light tanks for the U.S. witch saves them both
-Sets up a driving school after WWII to teach people to drive
-No incentive to invest in US
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| Honda in America | -Honda decides Americans would be their customers
-Offers small car that are attractive during the oil crisis
-Opens a factory in Ohio near Columbus and employs people with no experience building cars
-Has a few workers doing multiple jobs
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| U.S. restricts the number off foreign cars that can be imported | -Honda gets around this by selling Honda cars mad in America
-This convinces Toyota to invest in the U.S. open its own factory
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| Volts Wagon (VW) failure in America | -Purchased an old AMC factory in western PA
-Lose buyers due to bad quality
-VW closes the factory
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| Delaware get companies to invest in it in the 1970s | -Lowest bond rating of any state in the 70s
-DuPont is laying off workers
-1981 Delaware creates the Financial Center Development Act
-If credit card banks open up operation in DE they could charge whatever interest rates they want
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| Sam Walton | -Founded Walmart in 1962
-Buys a 5 & 10s in Arkansas & after losing that buys more 5 & 10s in rural AR, OK, TX
-He believed rural America was being undeserved
-Hands on Management from Bentonville, AR
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| Walmart's Problem? | -Operating in urban areas because of their business model
-They need lots of space & the space in urban areas are expensive compared to rural areas
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| China & FDI | -Any company that wants to open up in China most be at least 51% owned by a Chinese firm
-China is competing with countries that have lower wages then they do, like Vietnam & Indonesia
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| Why are American companies investing overseas in the 1980's? | -For cheaper land, labor, and materials
-For the first time in the 80s not just to sell overseas, but to bring goods back to the U.S.
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| Ronald Reagan | -Regan says the U.S. will cut back on spending & they do the opposite and increase spending
-Reagan Doctrine says the U.S. will try t o stop and overthrow communist governments
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| Consumer Spending Changes | -People Saved money during WWII and have extra money to spend in the 50s
-50s marketing for teens starts
-Credit becomes available in the 50s & people buy thing that they hadn't previously bough before
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| Involving business model | -Global flow of money
-EX: U.S. invest in Chinese made goods that are sold in the U.S. the Chinese may buy
-Every one invested in each-other
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