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International Logistics<br />Facilitating International Business<br />
Learning Objectives<br />
International Monetary System<br />Impossible Triangle<br />how exchange rates, balance of payments and macroeconomic mana...
International Monetary Fund (IMF)<br />promoting international monetary cooperation<br />facilitating the expansion and ba...
IMF criticism – East Asian nations<br />IMF accused of turning the 1997 Asian financial situation into a crisis – in Indon...
Discussion – Hungary in Deal with IMF<br />
The World Bank<br />makes loans to developing countries for development programs with the stated goal of reducing poverty<...
United Nations<br />192 members<br />“…keep peace throughout the world<br />…develop friendly relations between nations <b...
Discussion – United Nations<br />
NGOs<br />Nongovernmental, nonprofit voluntary organizations<br />private institutions independent of the government<br />...
International Logistics<br />When introducing the X-Box gaming console, Microsoft had to decide if it should manufacture t...
The Impact of International Logistics<br />Total<br />Landed<br />Cost<br />Logistical<br />Costs<br />In North America, l...
A reduction is supply cost directly increases gross profit<br />Profit $0.10<br />Profit $0.13<br />Overhead<br />Overhead...
Factors Necessary for the Use of Logistics as a Competitive Tool<br />Close collaboration with suppliers and customers to ...
New Dimensions of International Logistics<br />Basic differences between domestic and international<br />distance<br />var...
New Dimensions of International Logistics<br />Country-specific differences<br />Transportation systems and intermediaries...
Competing Forces that can Impact International Business<br />Global Market Forces<br />Integrated, <br />Synchronized <br ...
Factors Impacting International Business<br />Sociocultural<br />Physical /<br />Environmental<br />International Staffing...
Physical/Environmental<br />Will the current world political environment force changes to how business is conducted?<br />...
Sociocultural<br />Do you understand the cultural make-up of the country in which you seek to operate in?<br />How are bus...
Sociocultural – other factors to consider<br />business protocols<br />social & business customs<br />language factors<br />
Political<br />Are you aware of the politics and their implications in any of the nations in which you intend to have a pr...
Political<br />To be successful, one must have appropriate knowledge and involvement in the political, media, and industry...
Discussion – Implications on International Logistics<br />
Labour<br />Need to understand local labour laws or policies and ensure they are followed.<br />
International Staffing - Discussion<br />What obstacles can you expect when staffing an international business?<br />Europ...
Bhupesh Shah, B.Sc., MBA<br />Twitter/Facebook/Skype: ethnicomm<br />©ethnicomm inc.<br />
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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 business and the staffing challenges.

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International Logistics - Facilitating International Business

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

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