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International Logistics - Facilitating International Business
 

International Logistics - Facilitating International Business

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Lecture on international logistics - role of the IMF, UN, World Bank and other associated non-profit organizations in facilitating international business; the forces and factors impacting int'l ...

Lecture on international logistics - role of the IMF, UN, World Bank and other associated non-profit organizations in facilitating international business; the forces and factors impacting int'l business and the staffing challenges.

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  • http://www.chinadaily.com.cn/world/2008-12/03/content_7264255.htm#
  • IBRD – focuses on middle income and creditworthy poor countriesIDA – focuses on the poorest countries of the worldHeadquarters in Washington DC with 100+ country offices and >10,000 employeesEstablished during WWII at Bretton Woods, New Hampshire – initially helped rebuild Europe after the war. Loaned $250 million to France in 1947 for post-war reconstruction.
  • Started out as the League of Nations after WWI – 42 countries wanted to preserve peace/defend other members from aggression – promotion international cooperation in economic and social affairsUN - started on October 24th1945 (after WWII) recognizing that the League of Nations failed because they had no military power and members were not willing to use sanctions– originally 51 member statesHeadquartered in New York City but the land and buildings are international territory (own flag, own post office, own postage stamps)6 official languages (Arabic, Chinese, English, French, Russian and Spanish)
  • ethnicomm inc. is a provider of a wide array of sales, marketing and web strategy consulting services that enable successful market entry or growth for Canadian, American, European and Asian-based small-medium sized businesses.

International Logistics - Facilitating International Business International Logistics - Facilitating International Business Presentation Transcript

  • International Logistics
    Facilitating International Business
  • Learning Objectives
  • International Monetary System
    Impossible Triangle
    how exchange rates, balance of payments and macroeconomic management are managed and adjusted globally
    system is necessary to define a common standard of value for the world's currencies
    exchange-rate
    stability
    free movement
    of capital
    independentmonetary policies
    only two can be chosen
  • International Monetary Fund (IMF)
    promoting international monetary cooperation
    facilitating the expansion and balanced growth of international trade
    promoting exchange stability
    assisting in the establishment of a multilateral system of payments
    making its resources available (under adequate safeguards) to members experiencing balance of payments difficulties
    185 member countries
  • IMF criticism – East Asian nations
    IMF accused of turning the 1997 Asian financial situation into a crisis – in Indonesia, they closed the bank owned by the president’s brother
    Can’t trust the president’s brother? Who can you trust?
    Collapsed the banking system
    US gov’t bailing out AIG and Citigroup is contrary to the IMF approach
    If country wants to borrow >20% of it’s quota, it has to follow IMF conditions
  • Discussion – Hungary in Deal with IMF
  • The World Bank
    makes loans to developing countries for development programs with the stated goal of reducing poverty
    made up of two unique development institutions owned by member countries—the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)
    must be member of the IMF
    Source: web.worldbank.org
  • United Nations
    192 members
    “…keep peace throughout the world
    …develop friendly relations between nations
    …work together to help people live better lives, eliminate poverty, disease and illiteracy in the world, environmental destruction and encourage respect for each other's rights and freedoms
    …be a centre for helping nations achieve these aims”
    Source: un.org
  • Discussion – United Nations
  • NGOs
    Nongovernmental, nonprofit voluntary organizations
    private institutions independent of the government
    international or regional
    Doctors without Borders
    Red Cross
  • International Logistics
    When introducing the X-Box gaming console, Microsoft had to decide if it should manufacture the console or outsource manufacturing to a 3rd party
    Microsoft primarily creates software and lacked the manufacturing capabilities to make the X-Box
    Microsoft decided to outsource production to Flextronics…
    Flextronics had been pursuing an industrial park strategy so that it could control its supply chain
    Flextronics had a global presence
    Flextronics could use Web-based information systems to share information with Microsoft
    Microsoft trusted Flextronics
    Source: The McGraw-Hill Companies, Inc
  • The Impact of International Logistics
    Total
    Landed
    Cost
    Logistical
    Costs
    In North America, logistical costs are 10% to 30% of the total landed cost of an international order.
    Would you expect this to be the same in Asia? Europe? Explain.
  • A reduction is supply cost directly increases gross profit
    Profit $0.10
    Profit $0.13
    Overhead
    Overhead
    $0.15
    $0.15
    Labour
    Labour
    $0.15
    $0.15
    Inputsupplies
    Inputsupplies
    $0.30
    $0.30
    Logistics
    Logistics
    $0.30
    $0.27
    $0.30
    Make more money without increasing sales!
  • Factors Necessary for the Use of Logistics as a Competitive Tool
    Close collaboration with suppliers and customers to develop a JIT system - maintain manufacturing cost at globally competitive rates.
    Technologically advanced information processing and communication exchange capabilities.
    An integrated business infrastructure.
  • New Dimensions of International Logistics
    Basic differences between domestic and international
    distance
    variation
    entry regulations
    different transportation modes
  • New Dimensions of International Logistics
    Country-specific differences
    Transportation systems and intermediaries vary.
    Reliability of carriers may be different.
    Computation of freight rates may be different.
  • Competing Forces that can Impact International Business
    Global Market Forces
    Integrated,
    Synchronized
    Supply Chain.
    TechnologicalForces
    Economic Forces
    Global Cost Forces
  • Factors Impacting International Business
    Sociocultural
    Physical /
    Environmental
    International Staffing
    Political
    Labour
  • Physical/Environmental
    Will the current world political environment force changes to how business is conducted?
    How will consumers, suppliers, manufacturers/producers be linked in future?
  • Sociocultural
    Do you understand the cultural make-up of the country in which you seek to operate in?
    How are business relationships formed in different countries? Is it the same everywhere?
    http://www.youtube.com/watch?v=m4TvwE_CSHI
  • Sociocultural – other factors to consider
    business protocols
    social & business customs
    language factors
  • Political
    Are you aware of the politics and their implications in any of the nations in which you intend to have a presence?
     Iranian traders in Dubai are affected by Bush urging Gulf allies to “confront” Iran (see notes)
    Source: wikinews.org
  • Political
    To be successful, one must have appropriate knowledge and involvement in the political, media, and industry leadership of the country or regions of operations.
    How can political issues impact global logistics?
    Source: moonbattery.com
  • Discussion – Implications on International Logistics
  • Labour
    Need to understand local labour laws or policies and ensure they are followed.
  • International Staffing - Discussion
    What obstacles can you expect when staffing an international business?
    Europe
    Asia
    Australia
    Africa
  • Bhupesh Shah, B.Sc., MBA
    Twitter/Facebook/Skype: ethnicomm
    ©ethnicomm inc.