1
Objective 1.03
Understand business in the global
marketplace.
2
Factors and regulations companies have to
consider when doing business in the global
market place
3
Domestic vs. International Businesses
• What activities are included in domestic business
transactions? Where do they ta...
4
Business Advantage Factors
• Absolute advantage exists when a country
can produce a good or service at a lower cost
than...
International Trade
• From where do imports come?.
- Items brought from other countries
• From where do exports come?
- Go...
6
Importing
Advantages and Disadvantages
• Advantages
– Goods available for purchase.
– Goods could have cost less since t...
7
Exporting
Advantages and Disadvantage(s)
• Advantages
– Exporting creates jobs.
– Exporting provides access to goods usu...
Measuring of Trade
Relations
9
Measuring of Trade Relations
• Ways to measure trade relations
– Balance of Trade & Balance of Payments
• Why are measur...
10
Balance of trade is the difference between a
country’s total exports and total imports.
– If a country exports more tha...
11
Balance of payments is the difference between the
amount of money that comes into a country and the
amount that goes ou...
12
International Currency Exchange Rate
Main Factors
• The foreign exchange market is where banks
buy and sell different c...
13
International Currency Exchange Rate
Main Factors Continued
Main factors affecting currency exchange rates are:
– Balan...
14
International Business Environment
Factors
What are the main environmental issues that could make a
difference when con...
15
International Business Environment
Factors continued
Four main factors:
– Geography
– Cultural Influences
– Economic De...
16
International Business Environment
Factors continued
• What is included in a
country’s geography?
---------------------...
17
International Business Environment
Factors continued
• What main cultural factors
may Influence how business
is conduct...
18
International Business Environment
Factors Continued
• What key effects of a
country’s economics that
may influence con...
19
International Business Environment
Factors continued
• What political and legal
concerns may influence
business activit...
International Trade Barriers
Trade Barriers are restrictions to free trade.
Obj. 1.03 What are Trade Barriers?
22
Main International Trade
Barrier Factors• Embargo
– Government bans the import or export of specified goods.
Why would ...
23
Encouragement of International
Trade Factors
Main factors are:
– Common Market: Countries that are members
freely inves...
24
Encouragement of International
Trade Factors continued
–Free-Trade Agreement: Countries that are
members remove duties ...
25
Encouragement of International
Trade Factors continued
–Free-trade zones: Include selected areas that
allow duty-free p...
26
Main entry modes for companies to enter the
global marketplace
27
Main Entry Modes to the Global
Marketplace
– Franchising is allowing a business the rights to use
another company’s nam...
28
Main Entry Modes to the Global
Marketplace continued
• Joint venture happens when two or more
companies agree to share ...
29
Main international trade organizations
30
Main International Trade Organizations
• International Monetary
Fund (IMF)
• World Bank
• World Trade
Organization (WTO)
31
Main International Trade Organizations
continued
• International Monetary Fund (IMF)
– Helps promote economic cooperati...
32
Main International Trade Organizations
continued
• World Trade Organization (WTO)
– Settles trade disputes and enforces...
Upcoming SlideShare
Loading in …5
×

1.03

266 views
106 views

Published on

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
266
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Domestic business is the making, buying, and selling of goods and service within a country.
    International business, also called foreign or world trade, refers to business activities needed for creating, shipping, and selling goods and services across national borders.
  • Absolute advantage example: Saudi Arabia-Oil production, Columbia-coffee, Virgin Islands-sand
    Comparative advantage example: China-manufacturing of clothes and household goods
    America-Technology
    Japan-Electroncis
  • Imports are items bought from other countries.
    Exports are goods and services sold to other countries.
    Import examples may include furniture, tax preparation services, bananas, or automobile parts.
    Export examples may include silver, automobile parts, or software.
  • What is a way to measure trade relations?
    Balance of trade or balance of payments
    Why are measures of trade relations completed?
    Nations are concerned with balancing income with expenditures.
  • Balance of payment is influenced by demand for a nations goods and services. If the balance of payment is favorable, then usually currency is steady and rising in value. If unfavorable, then usually the currency is declining in value.
    Economic Conditions
    Inflation decreases buying power of currency
    Interest rates that are high decreases demand to borrow money.
    Political stability could be impacted by changes in government or laws.
  • What are the main environmental issues that could make a difference when conducting business in the global marketplace?
    Cultural influences, economic development, geography, and political-legal issues
    How could these issues impact businesses?
    Cultural influences-In a country company executives may prefer to meet with people of the same culture.
    Geography-A country with a lot of natural resources may have to rely on exports more.
    Economic development-A country may have limited transportation methods that may limit travel distances to purchase imported goods.
    Political-legal concerns-A country’s government only collects about ¼ of his housing property taxes. This could be a sign of weak government that is ignored by the its citizens.
  • What is included in a country’s geography?
    Location
    Climate
    Terrain
    Seaports
    Natural Resources
  • What main cultural factors may influence how business is conducted in the global marketplace?
    Language
    Religion
    Family
    Food
    Values
    Customs
    Social Relationships
  • What key effects of a country’s economics that may influence conducting business in a global marketplace?
    Education and Literacy level
    Inflation
    Technology
    Exchange rate
    Agricultural dependency
    Infrastructure
    Transportation
    Communication
    Utilities systems
  • What political and legal concerns may influence business activities in a global marketplace?
    Type of Government
    Stability of government
    Government policies for businesses relevant to trade barriers
  • Why would a government place an embargo?
    To protect a good or service from too much competition in a global market place more that what a quota or tariff could.
    To protect sensitive goods.
    Why would a company or country set a quota?
    To regulate the supply and prices.
    To protect a good or service from too much competition in a global market place.
    Why would a government use a tariff?
    To protect the supply of goods.
    Higher Tariffs tends to lower the demand for the product and reduce the quantity of that import. Give the country greater flexibility to control and manipulate the demand and supply on products produced.
  • Franchising-What are some examples?
    H & R Block
    Dunkin’ Donuts
    Licensing-What are some examples?
    Dick Idol furniture/products
    Beyond Juice Cafés
    Joint venture-What are some examples?
    Cable company and television stations
    Oil lube and tire service company
  • What are some examples?
    Cable company and television stations
    Oil lube and tire service company
  • 1.03

    1. 1. 1 Objective 1.03 Understand business in the global marketplace.
    2. 2. 2 Factors and regulations companies have to consider when doing business in the global market place
    3. 3. 3 Domestic vs. International Businesses • What activities are included in domestic business transactions? Where do they take place? – the making, buying, and selling of goods and service within a country. • What activities are included international business transactions? Where do they take place? – business activities needed for creating, shipping, and selling goods and services across national borders.
    4. 4. 4 Business Advantage Factors • Absolute advantage exists when a country can produce a good or service at a lower cost than other countries. • Comparative advantage is a situation in which a country specializes in the production of a good or service at which it is relatively more efficient. • What are some examples of absolute and comparative advantages?
    5. 5. International Trade • From where do imports come?. - Items brought from other countries • From where do exports come? - Goods & services sold to other countries • What are some examples of imports? – furniture, tax preparation services, bananas, or automobile parts, minerals, etc • What are some examples of exports? – silver, automobile parts, medicines, plastics, media (ESPN or CNN), software, etc.
    6. 6. 6 Importing Advantages and Disadvantages • Advantages – Goods available for purchase. – Goods could have cost less since they were imported. – Goods may be a better quality since imported. – Goods imported and owned may provide satisfaction. • Disadvantages – Some goods would cost more without competition of imported goods. – Possibly goods may be unavailable.
    7. 7. 7 Exporting Advantages and Disadvantage(s) • Advantages – Exporting creates jobs. – Exporting provides access to goods usually unavailable. • Disadvantage(s) – Jobs may depend on global business.
    8. 8. Measuring of Trade Relations
    9. 9. 9 Measuring of Trade Relations • Ways to measure trade relations – Balance of Trade & Balance of Payments • Why are measures of trade relations completed? – Nations are concerned with balancing income with expenditures. • Foreign debt is the amount of money a country owes to other countries.
    10. 10. 10 Balance of trade is the difference between a country’s total exports and total imports. – If a country exports more than it imports, it has a trade surplus. This is favorable. – If a country imports more than it exports, it has a trade deficit. This is unfavorable. Measuring of Trade Relations continued
    11. 11. 11 Balance of payments is the difference between the amount of money that comes into a country and the amount that goes out of it. – If a country receives more money in a year than it pays out, it has favorable balance. – If a country sends more money out than it brings in, it has an unfavorable balance. Measuring of Trade Relations continued
    12. 12. 12 International Currency Exchange Rate Main Factors • The foreign exchange market is where banks buy and sell different currencies. • The exchange rate is the value of a currency in one country when compared with the value in another.
    13. 13. 13 International Currency Exchange Rate Main Factors Continued Main factors affecting currency exchange rates are: – Balance of payments- influenced by demand for a nations goods and services. If the balance of payment is favorable, then usually currency is steady and rising in value. If unfavorable, then usually the currency is declining in value. – Economic conditions • Inflation decreases buying power of currency • Interest rates that are high decreases demand to borrow money. – Political stability- could be impacted by changes in government or laws
    14. 14. 14 International Business Environment Factors What are the main environmental issues that could make a difference when conducting business in the global marketplace? – Cultural influences, economic development, geography, and political-legal issues • How could these issues impact businesses? – Cultural influences-In a country company executives may prefer to meet with people of the same culture. – Geography-A country with a lot of natural resources may have to rely on exports more. – Economic development-A country may have limited transportation methods that may limit travel distances to purchase imported goods. – Political-legal concerns-A country’s government only collects about ¼ of his housing property taxes. This could be a sign of weak government that is ignored by the its citizens.
    15. 15. 15 International Business Environment Factors continued Four main factors: – Geography – Cultural Influences – Economic Development – Political and Legal Concerns
    16. 16. 16 International Business Environment Factors continued • What is included in a country’s geography? ------------------------------------- • The geography of a country could impact its natural resources and export and import of resources.
    17. 17. 17 International Business Environment Factors continued • What main cultural factors may Influence how business is conducted in the global marketplace? ------------------------------------- • The accepted behavior, customs and values of a society could impact business activities.
    18. 18. 18 International Business Environment Factors Continued • What key effects of a country’s economics that may influence conducting business in a global marketplace? ------------------------------------- • A country’s economic development impacts its citizens standard of living and business activities.
    19. 19. 19 International Business Environment Factors continued • What political and legal concerns may influence business activities in a global marketplace? -------------------------------- • Political and legal concerns influence business activities in the global marketplace.
    20. 20. International Trade Barriers
    21. 21. Trade Barriers are restrictions to free trade. Obj. 1.03 What are Trade Barriers?
    22. 22. 22 Main International Trade Barrier Factors• Embargo – Government bans the import or export of specified goods. Why would a government place an embargo? Examples: Cuba puts a complete ban on US products to maintain their competitive advantage in marketplace. • Quotas – A limit on the quantity of good that may be imported or exported within a given period to regulate international trade. – Why would a company or country set a quota? Example: India limits the amount of imported wheat products to protect their own industry. • Tariffs – Taxes on certain imported products which increases prices. – Why would a government use a tariff? Example: U.S. provides $20 tax on their the computer products to other countries
    23. 23. 23 Encouragement of International Trade Factors Main factors are: – Common Market: Countries that are members freely invest in one another. • Examples: –European Union (EU) –Latin American Integration Association (LAIA)
    24. 24. 24 Encouragement of International Trade Factors continued –Free-Trade Agreement: Countries that are members remove duties and trade barriers on products traded among them to increase trade between members. • Example –NAFTA (the North American Free Trade Agreement) between the United States, Canada, and Mexico.
    25. 25. 25 Encouragement of International Trade Factors continued –Free-trade zones: Include selected areas that allow duty-free products to be imported, and then stored, assembled, and/or used in manufacturing. The activities usually occur around a seaport or airport.
    26. 26. 26 Main entry modes for companies to enter the global marketplace
    27. 27. 27 Main Entry Modes to the Global Marketplace – Franchising is allowing a business the rights to use another company’s name or process in a specific way. • What are some examples? – Licensing is selling the right to a company to use some intangible property (production process, trademark, or brand name) for a fee or royalty. • What are some examples?
    28. 28. 28 Main Entry Modes to the Global Marketplace continued • Joint venture happens when two or more companies agree to share a business project. – What are some examples?
    29. 29. 29 Main international trade organizations
    30. 30. 30 Main International Trade Organizations • International Monetary Fund (IMF) • World Bank • World Trade Organization (WTO)
    31. 31. 31 Main International Trade Organizations continued • International Monetary Fund (IMF) – Helps promote economic cooperation and maintain an orderly system of world trade and exchange rates. • World Bank – Provides economic aid to developing countries to fund building communications systems, transportation networks, and energy plans.
    32. 32. 32 Main International Trade Organizations continued • World Trade Organization (WTO) – Settles trade disputes and enforces free-trade agreements among its members.

    ×