4. ENTREPRENEURSHIP DEVELOPMENT
• Global Economy is the interconnected economies of
the nations of the world.
• Exporting – selling and shipping of goods to another
country
• Importing – buying or bringing in goods from other
countries to sell
Global Economy
5. ENTREPRENEURSHIP DEVELOPMENT
Two important factors that brought about a global
economy:
• Reduction in Trade Tariffs
• Advances in communication technology, particularly the
Internet
Global Economy
6. ENTREPRENEURSHIP DEVELOPMENT
The World Trade Organization
• Global coalition of Governments that makes the rules that
govern International Trade
• Eliminates or lessen Trade Barriers
• Promotes Free Trade
• NAFTA - North American Free Trade Agreement - Canada,
US, and Mexico trade has become more profitable
• EU - European Union – Europe’s trading bloc promotes free
trade and shared currency
Global Economy
7. ENTREPRENEURSHIP DEVELOPMENT
Trade Barrier – a restriction on goods entering or
leaving a country.
Lowering of barriers has increased the flow of goods
between countries
• Tariffs – taxes on imports and/or exports
• Governments charge tariffs on imports to protect domestic
industries
Trade Barriers
8. ENTREPRENEURSHIP DEVELOPMENT
• Developments in communications, information
processing and transportation technology has
transformed how business is done.
• Technology has made the world smaller
• Communicate with people in other countries by phone,
through fax machines, with e-mail and over the Internet
Technology
9. ENTREPRENEURSHIP DEVELOPMENT
International Markets:
Need to study and learn cultural differences.
US companies export 25% of our GDP
Gross Domestic Product (GDP) total value of all
goods produced during the year.
Global Opportunities
11. ENTREPRENEURSHIP DEVELOPMENT
China:
• government controls business, and laws and regulations
are fairly strict.
• Fastest-growing economy in world
• Looking for new products and services.
Japan:
• In the past a “closed” society- hard to sell exports
• US Fast-food menu reflects their culture.
• Today they desire our clothing and fashion accessories
• Advertise using humor, fantasy, harmony, collective
material success and things uniquely Japanese
Global Opportunities - Asia
13. ENTREPRENEURSHIP DEVELOPMENT
• Diverse communities: traditional and modern
• Speak Spanish, Portuguese, and French
• Buying decision based on family needs not individual
needs
• Look at merits of product, do comparison shopping
before they buy
• Mexico consumers prefer U.S. goods
Global Opportunities – Latin America
15. ENTREPRENEURSHIP DEVELOPMENT
• Business failures and risk taking not accepted, not as
many entrepreneurs
• No common European culture
• Common currency made commerce easier
• French more likely to east in restaurants than Italians
• Italy culture is very individualistic, whereas France’s
culture is more collectivist
• Segment Markets/ Ads based on cultural differences
rather than national boundaries
Global Opportunities – Europe
16. ENTREPRENEURSHIP DEVELOPMENT
Regions in Transition: Africa, Middle East, and former
Soviet Union
• Unstable or developing countries offer a risky form of
opportunity
• Many barriers: lack infrastructure, shifting political power,
and lack of support once the business is in operation
• Research the culture and business practices
• Consider partnering with a local company
• Be sure to know your rights
Global Opportunities – Europe
17. ENTREPRENEURSHIP DEVELOPMENT
Entrepreneurship in the Global Marketplace
• Different from domestic business
• Countries differ in their cultures, political systems,
economic systems, legal systems, and levels of economic
development
• Cultural differences make the management of an
international business more complicated than the
management of a domestic business
• Cross-boarder business transactions requires an in-depth
understanding of the rules of international trade
• An international business must have policies for dealing
with movements in exchange rates.
Global Opportunities – Europe
18. ENTREPRENEURSHIP DEVELOPMENT
• Dress Conservatively
• Do not correct the other person’s use of English.
• Be prepared to remove your shoes.
• Respect different tastes in food
• Know something about the country and its culture
• Build a relations and trust before conducting business
• If necessary bring an interpreter to translate
WAYS to ENTER the GLOBAL MARKET
19. ENTREPRENEURSHIP DEVELOPMENT
Importance of Culture
Study customs…..there may be contrasting differences
• American business owners often travel to Japan in a hurry to close
a transaction.
• Japanese business people, like to take their time completing a
deal, they want to get to know the person before they complete
transaction. Trust is very important, they are willing to take the
time to make sure that you are trustworthy.
Tips for Showing Respect
62. ENTREPRENEURSHIP DEVELOPMENT
Trade Barriers
• Any hurdle impediment or road block that hampers
the smooth flow of goods/services and payment from
one destination to another
• they arise from the rules and regulates governing trade
either from home country or host county intermediary
63. ENTREPRENEURSHIP DEVELOPMENT
Trade Barriers
• They are man-made obstacles to the free movement of
goods between different courtiers.
• Free and fair international trade is an ideal situation as
it is beneficial to all countries
• Inspite of WTO, trade barriers exists
64. ENTREPRENEURSHIP DEVELOPMENT
Objectives of Trade Barriers
• To protect domestic industries from foreign goods.
• To promote new industries and R&D activities by providing a
home market for domestic industries.
• To maintain favorable balance of payment, by restricting
imports from foreign country
• To conserve foreign exchange reserves of the country by
restricting imports from foreign countries.
• To protect the national economy from dumping by other
countries with surplus production
65. ENTREPRENEURSHIP DEVELOPMENT
Objectives of Trade Barriers
• To mobilize additional revenue by imposing heavy duties on
imports. this also restricts conspicuous consumption within the
country.
• To counteract trade barriers imposed by other countries.
• To encourage domestic production in the domestic market and
thereby making the country strong and self reliant
79. ENTREPRENEURSHIP DEVELOPMENT
Definition of Exports
The term export is derived from the conceptual
meaning as to ship the goods and services out of the
port of a country
The seller of such goods and services is referred as an
"exporter" who is based on the country of export.
whereas the overseas based buyer is referred as an
"Importer"
80. ENTREPRENEURSHIP DEVELOPMENT
Definition of Exports
In international trade, "exports" refers to selling goods
and services produced in the home country to other
markets
Exporting is the most popular way for companies to
become international
Exporting is usually the first mode of foreign entry
used by companies
