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BUS110 Chap 3 - Doing Business in Global Markets
 

BUS110 Chap 3 - Doing Business in Global Markets

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Doing Business in Global Markets

Doing Business in Global Markets

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  • See Learning Goal 1: Discuss the growing importance of the global market and the roles of comparative advantage and absolute advantage in global trade. See text pages: 60-62
  • See Learning Goal 1: Discuss the growing importance of the global market and the roles of comparative advantage and absolute advantage in global trade. See text pages: 60-62
  • See Learning Goal 1: Discuss the growing importance of the global market and the roles of comparative advantage and absolute advantage in global trade. See text pages: 60-62
  • Also available on a Transparency Acetate See Learning Goal 3: Illustrate the strategies used in reaching global markets and explain the role of multinational corporations in global markets. What’s on Your Pizza Students should enjoy this slide. It shows the cultural influence with pizza topping preferences. Ask the students: What do they like on their Pizza? Would they prefer squid, or curry, or green peas on their pizza? Ask the students: What modifications do the pizza companies need to make when they go to different countries like the ones shown in this slide? (Students should point out the need to understand and research the market and cultural/customer preferences and then offer what the customers want.)
  • Also available on a Transparency Acetate See Learning Goal 4: Evaluate the forces that affect trading in global markets. Did you Know ? 1. Some very fascinating cultural and social differences exist in other nations. 2. Discuss the following interesting points: a. A smile in Japan can mean that a person is uncomfortable or sad. b. When traveling to Sweden, make appointments two weeks in advance. c. Lack of punctuality is a fact of life in Brazil. Become accustomed to waiting. 3. Review the following helpful hints when dealing globally: a. Be culturally savvy. Learn about the culture, language, and dress code. b. Recognize the importance of dealing with cultural differences and consequences of taking no action. c. Manage and learn to appreciate various cultures. d. Build a database of information about each country where you have business relationships.

BUS110 Chap 3 - Doing Business in Global Markets BUS110 Chap 3 - Doing Business in Global Markets Presentation Transcript

  • * * Chapter Three Doing Business in Global Markets Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
  • Why Trade with Other Nations?
    • No nation can produce all its needs
    • Mutually beneficial exchange
    • Natural Resources or Technology
      • Produce or Buy?
    3-
  • IMPORTING and EXPORTING * * The Dynamic Global Market
    • Importing –
      • Buying products from another country.
    • Exporting – S
      • Selling products to another country.
      • The U.S.
        • largest in importing
        • second largest in exporting
    LG1 3-
  • COMPARATIVE and ABSOLUTE ADVANTAGE * * The Theories of Comparative and Absolute Advantage
    • Comparative Advantage –
      • Selling products produced most efficiently
      • Buying products from other countries it cannot produce as efficiently.
      • Absolute Advantage –
        • Monopoly on producing a specific product
        • Able to produce it more efficiently than all other countries.
    LG1 3-
  • Theories of Advantage 3- Output per Unit of Input Comparative U. S. China Software U. S. China Clothing
  • Theories of Advantage 3- Absolute Output per Unit of Input Copper Production Zambia The Rest of the World = Virtual Monopoly
  • GETTING INVOLVED in GLOBAL TRADE * * Importing Goods and Services
        • Starbucks CEO, Howard Shultz, found his importing opportunity in Italy. He transformed a coffee shop in Seattle to mimic the European cafes.
    LG2 3-
  • HOW to MEASURE GLOBAL TRADE * * Measuring Global Trade
        • Balance of Trade –
          • Total value of a nation’s exports compared to its imports measured over time.
          • Trade Surplus –
            • Exports greater than imports.
          • Trade Deficit –
            • Exports less than imports.
    LG2 3-
  • KEY STRATEGIES for REACHING GLOBAL MARKETS * * Strategies for Reaching Global Markets Least Amount of commitment, control, risk and profit potential Most Licensing Exporting Franchising Contract Manufacturing International joint ventures and strategic alliances Foreign direct investment LG3 3-
  • * * Forces Affecting Trading in Global Markets LG4 3-
  • CULTURAL DIFFERENCES * * Socio-cultural Forces LG4 3-
  • What’s On Your Pizza 3-
    • Costa Rica - Coconut
    • France - Bacon, onion and fresh cream
    • India - Pickled ginger, minced mutton and tofu
    • Australia - Shrimp and pineapple
    • Pakistan - Curry
    • Brazil - Green peas
    • Japan - Squid and mayo jaga
    Source: World Features Syndicate
  • Did You Know? 3-
    • In Turkey it’s rude to cross your arms while you are facing someone.
    • In the Arab world the left hand is considered unclean; don’t eat with it!
    • In India never pat someone’s head, it’s the seat of the soul.
    • The Chinese associate gifts such as straw sandals, clocks and handkerchiefs with funerals.
  • EXCHANGE RATES * * Economic and Financial Forces LG4 3-
  • LEGAL CONCERNS OVERSEAS * * Legal and Regulatory Forces LG4 3-
  • TRADE PROTECTIONISM * * Trade Protectionism LG5 3-
  • TARIFFS * * Trade Protectionism LG5 3-
  • Think Global, Act Local
    • McDonald’s in India –
      • McDonald‘s has a consistent brand image around the world, but has regionally influenced menus.
    • http://video.foxbusiness.com/6873259/mcdonalds-in-india/?category_id=7542224d79feccaf637c186a01204f1ef3c83955
    3-