Global trade major factor and actors

1. Professional Skills IB105-03
Submitted to:
Prof. Jim Cowan
Presented by:
Akash Patel: 000332846
Ashwini Dave: 000336656
Marut Shah: 000337279
Kartik Patel: 000335566
Mihir Patel: 000334647

2. Table of Content
 Introduction
 Business Environment
 Global trader & checklist
 Global supply chain
 The mechanics of Trade Transaction
 Technology & Trade
 Trade in services
 Culture
- Intercultural Effectiveness & Relationships
- Cultural Factors
- Multicultural Environment
- High and Low context culture
 Verbal and Non-verbal communication
 Business Ethics checklist
 International trade finance
 Logistics and distribution
 Law policies and Regulation checklist
 International Business Plan
 Definition and Significance of Globalism
 Conclusion

3. Globalization
 Globalization—global competition characterized by networks of international linkages that bind
countries, institutions, and people in an interdependent global economy.
 In contrast, globalization refers to the increase or decline in the degree of globalism. It focuses on the
forces, the dynamism or speed of these changes.
Globalism
 Globalism, at its core, seeks to describe and explain nothing more than a world which is characterized
by networks of connections that span multi-continental distances.
 It attempts to understand all the inter-connections of the modern world — and to highlight patterns that
underlie (and explain) them.
Basic Difference of Globalization & Globalism
 In short, consider globalism as the underlying basic network, while globalization refers to the dynamic
shrinking of distance on a large scale

4. Global Business Environment
“GLOBAL”, “BUSINESS” &
“ENIVRONMENT” these three words
describe a reality of the nature of
international trade: it is evolving in a
fundamental way as a result of numerous
forces shaping the nature and dynamics of
global commerce.
“Global Business” is broadly viewed in the
context of shared, increasingly integrated
environment.
Technology advancements, Competitive
dynamics and Intercultural effectiveness are
drivers to conduct international business.
Image-1

5. The global business environment can be defined as the environment in different
sovereign countries, with factors exogenous to the home environment of the
organization, influencing decision making on resource use and capabilities.
The global business environment can be classified into the external environment and
the internal environment.
Image-2 Image-3
Business
Environment
Internal
Environment
External
Environment

6. External Environment:
Provides opportunities
and pose threats to
organization.
Micro Environment
Suppliers of Inputs
Customers
Marketing Intermediaries
Competitors
Publics
Macro Environment
Economic
Political- Legal
Technological & Global
Socio- cultural
Demographic
Natural & Ecological
External Environment

7. Internal Environment:
Provides strength or
cause weakness of a
strategic nature
Value System
Mission & Objectives
Organisational Structure
Corporate Culture
Quality of Human Resources
Labour Unions
Physical Resources
Technological Capabilities
Internal Environment

8. Global Trader, Global Business
 Engaging in business growing profit requires business people or organizations to
consistently define themselves as global traders in a “globalized” world.
Business
Innovation
With in
organization(Global)
Commitment
to
Sustainability
Vision
Niche
strategy

9. Global trade readiness checklist
Global
trade
Developing
international
market
Sustainable
business
model
International
trade
operations
Financial
commitment
Supplier,
customer
and
contact
network
Technology

10. Global Supply Chain9620.jpg
Value Chain Supply Chain
Information
Financial
Physical
Trade:
Global
Supply
Chains

11. The Mechanics of a Trade Transaction
The actors are:
Exporter
Government
Supporting Cast
Agent
Transporter
Broker
Financer
Importer

12. Technology & Trade
 Digital networks are not only drivers of technology innovation, but the “global network mindset” is a by
product of their evolution over the last ten years.
 Global supply chain: Reasons for manufacturing business-process outsourcing is listed below.
I. Achieving the best price or cost
II. Profitability requirements
III. Supply availability & quality
IV. Availability of labour cost & technology
V. Supplier responsiveness
VI. Tax and other financial considerations
 Software's for business transactions.
I. Electronic Data Interchange (EDI).
II. Value-Added network (VAN).
III. Value-Added services (VAS).

13. Trade in Services
 Major service Categories that are performed in global business environment
I. Financial
II. Shipping and distribution
III. Professional and technical
IV. Information technology
V. Legal services
VI. Retail trade and
VII.Health care
VIII.Travel, recreation and entertainment
IX. Education
 Modes of Delivery: Four ways services are traded
I. Cross border: Management consulting, Engineering, Marketing & transportation
II. Consumption aboard: Tourism & travel, Education & training, Legal, Health services
III. Commercial presence: Financial, Insurance, Commercial, Distribution
IV. Movement of natural presence: Arts & culture, Recreation & supporting, Trades people,
Education & training

14. Culture
 “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best
and often a disaster”
 Culture, and the values and beliefs that compose its foundation, may hold an even deeper significance
to some people than money and profit.
 It is therefore critically important to embrace cultural considerations to achieve international business
success
Intercultural effectiveness
 Cross-cultural Marketing benefits:
 Increased acceptance and understanding
 Clear communication of features and benefits
 Strong position and enhanced brand loyalty and customer/supplier relationships
 Gaining cross-cultural competency:
 Profile of existing personal and corporate values
 People from different cultures don’t see things same way
 Be non-judgemental, open-minded and flexible

15. Cultural Factors

16. Global Business: Multicultural Environment
 Culture is the set of commonalities that have developed
among groups of people over decades and centuries,
including:
 Customs
 Values
 Beliefs
 Behaviours
 Traditions
 Culture is influenced and defined by:
 Geography and history
 Language and religion
 War and peace
 Food, clothing and climate
Intercultural Relationships
 Relationships affect business cost
 Personal commitment
 Steps in intercultural negotiation:
 Relationship development
 Exchange of information and positions
 Persuasion
 Concession and agreement

17. Context of cultural concepts
 High-context culture
 Non-verbal communication plays critical role
 Personal relationship highly valued
 Low-context culture
 Written or spoken words taken at face value
 Relationships not necessary to do business
German Swiss Scandinavian Canada/US British Italian Spanish Greek Arab Japanese Chinese
Low Context High Context

18. Verbal & Non-verbal Communication
 Verbal communication
 Spoken language
 What is said & unsaid
 How it is said & accompanying non-verbal cues
 Learn the language (even a few words)
 Demonstrate, respect and interest
 Enhances relationships
 Internationalizing language
 If using English, make sure you are understood
 Non-verbal communication
 Gestures
 Touching
 Facial expressions
 Space
 Eye contact & Context
 Voice tones & Body language

19. Business Ethics Checklist
 See where country stands in the latest transparency international table.
 Ethical practices in target country.
 Review your own policy on these issues & if there is no policy put as soon as you can.
 Do an ethics “due diligence” on your potential partner whether this is an agent,
distributor or joint venture.
 Check child labour policy of potential partner.
 Review policy on fair trade.
 Draft plan in organization to deal with ethical challenges that may arise.

20. International Trade Finance
 The challenges of managing international transactions, particularly the flow of merchandise across
oceans and the flow of money across borders have resulted in evolution of a highly structured and
specialized form of financial service, called trade finance.
 Elements of trade finance:
 Financing
 Risk mitigation
 Information
 Trade finance: Getting paid
 Open account
 Documentary collections
 Documentary letter of credit
 Confirmed documentary letter of credit
 Sight or term payments

21. Logistics & distribution
 Four major modes of transportation
 Ocean freight
 Air freight
 Railroad
 Trucking services
 Incoterms: Must-know trade terminology
 To minimize confusion and misunderstanding between business partners
 International camber of commerce established, published and trademarked set of rules called
Incoterm
 To state rights and obligations of parties
 Export Documentation
 Commercial: Invoice
 Financial: Letter of credit
 Shipping: Bill of lading
 Regulatory: Certificate of origin
 Health and safety: Dangerous-goods certificate

22. Law, Policy and Regulation checklist
 Understand the impact and implications of multiple legal traditions and jurisdictions in international trade.
 Understand the political imperatives, the concept of extraterritoriality and the issues of policy and
national interest that affect the global legal and regulatory framework.
 Appreciate the basic principle of legal interpretation, action in major legal systems and jurisdictions.
 Review importance of balancing national interests and objectives with the broader “good” of the global
business environment.
 Understand the various-dispute resolution mechanisms and options available to business engaged in
international business.
 Appreciate the challenges related to enforcement of intellectual property and the critical importance of
an effective framework related to the internet and e-commerce.

23. International Business Plan
 International business plan might be thought of as road maps that set out framework for success.
 They identify your goals and objectives and establish metrics with which success can be measured.
The purpose of Planning
 Definition of objectives
 Evaluation Mechanisms
 Management tools
 Identifier of options
Four major steps in planning Cycle
 Defining the mission statement
 Defining the current status of the business
 Determining corporate strategy
 Identify international opportunities
 Revising the business plan

24. Conclusion
 The environment in which we conduct international trade and global commerce today has been
transformed by a series of factor that includes emerging global powers, technological progress and
shifts in priority that include emerging global powers, technological progress.
 The trade and international business professional of today cannot take a narrow based view of this
specialized expertise, but must look at context and be mindful of evolution and the speed of
transformational change.