Business w03 Competing in a Global Market @1

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Business w03 Competing in a Global Market @1

  1. 1. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Week 3 Content : Competing The rise of international business in A Global Market International business management Barrier to international trade Jakarta, September 2007 Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  2. 2. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta What is globalization ? Intro … Process by which the world economy is becoming a single interdependent system (Griffin, 2004) Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  3. 3. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Which one do you like ? Intro … Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  4. 4. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Which one you recognize more ? Intro … Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  5. 5. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Is this your favorite spot ? Intro … Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  6. 6. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta What are exports and imports ? Imports are products made or grown abroad but Intro … sold domestically; while exports are products made or grown domestically but shipped and sold abroad Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  7. 7. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta The Contemporary Global Economy Several forces have combined to spark & sustain Intro … globalization: 1. Government and businesses are aware of benefits of globalization to businesses and shareholders. 2. New technologies make international travel, communication and commerce much faster and cheaper. 3. Competitive pressure sometimes force a firm to expand into foreign markets to keep up with competitors. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  8. 8. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Trade Agreements General Agreements on Tariffs and Trade (GATT) North American Free Trade Agreement (NAFTA) Content : European Union (EU) World Trade Organization (WTO) The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  9. 9. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta The North American Marketplace and The Nations of NAFTA Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  10. 10. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta The Major World Marketplace Per capita income is the average income per person. Content : 1. High-income countries: those with per capita income greater than $ 9,386. The rise of international business 2. Middle-income countries: those with per capita income of less than $ 9,386 but more than $ 765. 3. Low-income countries (developing countries): those with per capita income of less than $ 765. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  11. 11. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta The Major World Marketplace NORTH AMERICA World’s largest marketplace and most stable economy. Content : U.S. dominates. EUROPE The rise of Western Europe is a mature but international business fragmented marketplace. Eastern Europe has gained importance as a marketplace and a producer. PASIFIC ASIA Nations of the ASEAN are an important force in the world economy and a major source of competition for north American firms. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  12. 12. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Europe and The Nations of the European Union Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  13. 13. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta The Nations of ASEAN Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  14. 14. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Forms of Competitive Advantage • Absolute advantage is the ability to Content : produce something more efficiently than any other country can. • Comparative advantage is the ability to The rise of international business produce some product more efficiently or better than other products. • National competitive advantage is an international competitive advantage stemming from a combination of factor conditions; demand conditions; related and supporting industries; and firm strategies, structures and rivalries. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  15. 15. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Absolute Advantage: Saudi Oil Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  16. 16. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Absolute Advantage: Brazilian Coffee Beans Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  17. 17. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Absolute Advantage: Canadian Timber Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  18. 18. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Absolute Advantage: Mexico Tequila Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  19. 19. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Comparative Advantage: United States Movies Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  20. 20. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Bollywood… ??? Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  21. 21. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Comparative Advantage: United States Computer Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  22. 22. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Comparative Advantage: United States Farming Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  23. 23. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Comparative Advantage: Guatemalan Textile Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  24. 24. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Comparative Advantage: South Korea Electronic Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  25. 25. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta National Competitive Advantage: French Wine Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  26. 26. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta National Competitive Advantage: United States Fast Food Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  27. 27. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta National Competitive Advantage: German High-End Car Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  28. 28. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Attributes of National Competitive Advantage Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  29. 29. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Import - Export Balances Balance of trade is the economic value of all products a Content : country imports minus the economic value of all products it exports. The rise of Trade deficit occurs when a country’s imports exceed its international business exports (a negative balance of trade), while a trade surplus occurs when exports exceed imports (a positive balance of trade) Balance of payments is the flow of money into or out of a country. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  30. 30. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Exchange Rates Exchange rate is the rate at which the currency of one nation Content : can be exchanged for that of another. 1. Fixed exchange rates: the value of any country’s currency relative to that of another remain constant. The rise of international business 2. Floating exchanger rates: the value of one country’s currency relative to that of another varies with market conditions. 3. Euro: a common currency shared among most of the members of the EU Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  31. 31. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Exchange Rates and Competition Content : When a country’s currency rises becomes stronger companies based there find it harder to export products to The rise of foreign markets and easier for foreign international business companies to enter local markets. When the value of currency declines becomes weaker companies based there find it easier to export to foreign markets and harder for foreign companies to enter local markets. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  32. 32. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Going International Content : The rise of international business Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  33. 33. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Levels of Involvement 1. Exporters : make product in one country to distribute and sell in others. Content : Importers : buy products in foreign markets and import them for resale at home. 2. International firms : conduct a significant portion of their business abroad. International business management 3. Multinational firms : design, produce and market products in many nations. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  34. 34. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta International Organization Structures • Independent agents are foreign individuals or organizations that represent an exporter in foreign markets. Content : • Licensing arrangements are arrangements in which firms choose foreign individuals or organizations to manufacture or market their products in another country. • Branch offices are foreign offices set up by an international or International multinational firm business management • Strategic alliance (also called Joint Venture) is an arrangement in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner’s country. • Foreign Direct Investment (FDI) involves buying or establishing tangible assets in another country. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  35. 35. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Content : International business management Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  36. 36. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Content : International business management Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  37. 37. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta 1. Social and Cultural Differences Firms planning to conduct business abroad must understand the social and cultural differences between host country and Content : home country. Differences in: * Language * Tastes and preferences * Sense of value * Shopping habits Barrier to international trade Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  38. 38. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta 2. Economic Differences Economic differences can be pronounced. Content : • A firm must know how much the government is involved in a given industry operating within a mixed economy. • The impact of economic differences can be great in planned economies. Barrier to international trade Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  39. 39. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta 3. Legal and Political Differences Government can affect international business in many ways. They can : Content : • Set condition for doing business within their borders and even prohibit doing business together. • Control the flow of capital and use tax legislation to discourage or encourage activity in a given industry. Barrier to international trade • Confiscate the property of foreign- owned companies. Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  40. 40. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Quotas, Tariffs, and Subsidies • Quotas is a restriction on the number Content : of products of a certain type than can be imported into a country. • Tariff is a tax levied on imported products. • Subsidy is a government payment to help a domestic business compete with foreign firms. Barrier to international trade Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  41. 41. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta What is protectionism ? Practice of protecting domestic business against Content : foreign competition. Barrier to international trade Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  42. 42. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta 4. Legal and Content Laws Local content laws require that products sold in a particular country be at least partly made there. Content : Firms seeking to do business in a country must either invest there directly or take on a domestic partner. Profits from doing business in a foreign country stay there rather than flowing to another nation. Barrier to international trade Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  43. 43. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta 5. Business Practice Laws Business practice laws are laws or regulations governing business practices in given countries. Content : • Cartels are associations of producers that control supply and prices. • Dumping is the practice of selling a product abroad for less than the cost of production. Barrier to international trade Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
  44. 44. Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta Content : The rise of international business thank you International business management Barrier to international trade Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id

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