Understanding the changes in
the global environment
USA
• GOOGLE ,FORD, CHEVRON , MICROSOFT
GERMANY
• ADIDAS,DAIMLER-CRYSLER, BMW , BOSCH
JAPAN
• TOYOTA , SONY , MITSUBISHI
 What are the companies dominating
international business and global market ?
 which are the Countries dominating
international business ?
1. USA
2. JAPAN
3. GERMANY
4. SINGAPORE
Why are these companies dominating ?
1.Studying the markets and identifying if the
products/services would be successful .
2.Based in locations where skilled resources are available in
plenty .
3.Technical innovation and quality on par with the best in the
industry.
4.Are aware of changes and adaptive to changes in the global
market.
5.Are ready for challenges with companies which do similar
business. Highly competitive
Example of an dominating company
Google:
 Dominates international search
 Audiences grew 2.5 times the rate of search’s share held by
 its competitors. 3 times audience of rival yahoo search
 Powered 77% of UK internet searches
 Google’s supremacy based on competion rather than
monopoly
 60% search market share
 why are some countries dominating
where some others are not ?
USA:-
 Biggest market for products and services
 Largest economy in the world.
 GDP was estimated at 14.4 trillion in 2008
 Maintained stable ,overall GDP growth rate and high levels of
research and capital investment
 Second highest income per hour worked
 In 2008,consumer spending made 72% of the economic activity
in the US
 Would not prefer foreign companies to trade.
GERMANY :-
1. Industrialization .
2. FDI - $11 billion
3. Fourth largest economy in the world .
4. Abandoning higher wage demands .
5. Projecting themselves as a popular destination for foreign
investment.
JAPAN:-
1. Second largest economy in the world .
2. Higher level of savings and investment rate for companies investing
in Japan
3. Infrastructure to promote industries and development.
4. Economy is highly diversified and competitive.
5. 326 companies listed in the Forbes Global 2000 in the year 2006 .
Definitions
What is international business?
It’s defined as a business (firm) that engages in international (cross –border)economic
activities and/or the action of doing business abroad
What is globalization?
The close integration of countries and people of the world. A long run historical revolution
since the dawn of human history.
What is a multinational company?
A firm that engages in foreign direct investment and operates in multiple countries.
What is a foreign direct investment (FDI)?
An investment in, controlling, and managing value added activities in other countries.
 What is power shift ?
Shift : The fundamental change in an individuals view or a
societies view of how things work in the world .
Power shifts : View of people in dominant country has
changed ; for the better ,in terms of newer market and
emerging economies
 which are the newer or emerging
economies and market ?
China
Example of a Chinese company:Lenovo
-World’s 4th largest PC manufacturer
-Produces desktop, laptops, workstations, servers etc.
-50.4 % owned by public shareholders
-Chinese government owns about 27% of lenovo
Examples of Acquisitions:
-Lenovo acquired the IBM personal computing division in Feb. 2009
India
Example of an Indian company-Tata
-Multinational conglomerate based in Mumbai, India
-Largest private corporate group in India
-Interest in steel, automobiles, IT, tea, hospitality
-Operations in 85 countries and its companies export products and
services to 80 nations
-2009 annual survey by the Reputation institute ranked 11th most reputed
company in the world
Examples of Acquisitions:
-February 2006- Tetley Tea company, $ 407 million
-January 2007-Corus Group, $ 12 billion
-March 2008-Jaguar and Land Rover, $ 2.3 billion
Why is there a power shift? (Why are
companies moving to different
markets?)
 More man power :Skilled resources utilisation
 New world market: not tried and tested ones
 Investment is cost effective: what you invest, you earn
back
 Bigger consumer market in the newer markets
 Industry friendly governments
What are the structural changes in
the future will dominate
China:
 Private sector companies to play major role
 Emphasising raising personal income and consumption
 Introducing new management systems and technical
expertise
 Foreign trade as major step toward economic growth
 3rd largest economy in the world now and try becoming
number one
 Continuing to be the fastest growing economy at an
average annual GDP growth rate of 10%
India
 12th largest economy in the world. Newer market,
newer consumers for MNC’s
 Labour force total half a million workers so production
could be large scale
 World’s largest democracy so capitalism can grow
 More English speaking people. So popular destination
for outsourcing industry .
 Larger pool of managerial and technological expertise.
How do we attract ,engage and
dominate international business?
Attract:
-Identify market .
-Identify the workability of the product in the market .
Engage:
-Identify skill resources and utilization .
-Define who are the competitors. How do we market
our product ?
-What is it different that you offer?
Dominate:
-How to sustain the growth continue?
-How to become the leader?
Bibliography
 Employment Outlook 2009 Country Notes: Germany, Organisation for Economic Cooperation &
Developmenthttp://www.oecd.org/country/0,3377,en_33873108_33873402_1_1_1_1_1,00.html, accessed 4 October 2009
 Economic and Financial Data for Germany,Federal statistical office
Germany,http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Navigation/Homepage__NT.psml,
accessed 4 October 2009
 Germany and the IMF, October 6, 2009,International Monetary fund,
http://www.imf.org/external/pubs/ft/weo/2006/02/data/weoselgr.aspx, accessed 6 october 2009
 Germany FACTS & STATISTICS,National master, Economy statistics, nation master,
http://www.nationmaster.com/country/gm-germany, accessed 2 october 2009
 Hitwise’s Hopkins, Feb 2007,http://weblogs.hitwise.com/heather-hopkins/2007/02/, accessed 2 october 2009
 Henley, John; Colin Kirkpatrick, Georgina Wilde (March 1999) ‘Foreign Direct investment in China: Recent
Trends and current Policy issue. The world economy (blackwell Synergy) 22 (2) 223-243. doi : 10.111/1467-
9701.00 201,http://www3.interscience.wiley.com/journal/119093787/abstract,accessed 2 October 2009
 Paradigm shift, Business dictionary .com,http://www.businessdictionary.com/definition/paradigm-
shift.html,accessed 2 October 2009
 Peng,M.,(2009)Global business, Southwestern Cengage Learning,ISBN:0324-58594-2
 World fact book ,https://www.cia.gov/library/publications/the-world-factbook/index.html accessed 4 October 2009
 Justin Fox, Can the world stop the slide, Time ,February 4,2008.
http://www.time.com/time/business/article/0,8599,1706449,00.html, accessed 2 October 2009

POWER SHIFTS.final09

  • 1.
    Understanding the changesin the global environment
  • 2.
    USA • GOOGLE ,FORD,CHEVRON , MICROSOFT GERMANY • ADIDAS,DAIMLER-CRYSLER, BMW , BOSCH JAPAN • TOYOTA , SONY , MITSUBISHI  What are the companies dominating international business and global market ?
  • 3.
     which arethe Countries dominating international business ? 1. USA 2. JAPAN 3. GERMANY 4. SINGAPORE
  • 4.
    Why are thesecompanies dominating ? 1.Studying the markets and identifying if the products/services would be successful . 2.Based in locations where skilled resources are available in plenty . 3.Technical innovation and quality on par with the best in the industry. 4.Are aware of changes and adaptive to changes in the global market. 5.Are ready for challenges with companies which do similar business. Highly competitive
  • 5.
    Example of andominating company Google:  Dominates international search  Audiences grew 2.5 times the rate of search’s share held by  its competitors. 3 times audience of rival yahoo search  Powered 77% of UK internet searches  Google’s supremacy based on competion rather than monopoly  60% search market share
  • 6.
     why aresome countries dominating where some others are not ? USA:-  Biggest market for products and services  Largest economy in the world.  GDP was estimated at 14.4 trillion in 2008  Maintained stable ,overall GDP growth rate and high levels of research and capital investment  Second highest income per hour worked  In 2008,consumer spending made 72% of the economic activity in the US  Would not prefer foreign companies to trade.
  • 7.
    GERMANY :- 1. Industrialization. 2. FDI - $11 billion 3. Fourth largest economy in the world . 4. Abandoning higher wage demands . 5. Projecting themselves as a popular destination for foreign investment. JAPAN:- 1. Second largest economy in the world . 2. Higher level of savings and investment rate for companies investing in Japan 3. Infrastructure to promote industries and development. 4. Economy is highly diversified and competitive. 5. 326 companies listed in the Forbes Global 2000 in the year 2006 .
  • 8.
    Definitions What is internationalbusiness? It’s defined as a business (firm) that engages in international (cross –border)economic activities and/or the action of doing business abroad What is globalization? The close integration of countries and people of the world. A long run historical revolution since the dawn of human history. What is a multinational company? A firm that engages in foreign direct investment and operates in multiple countries. What is a foreign direct investment (FDI)? An investment in, controlling, and managing value added activities in other countries.
  • 9.
     What ispower shift ? Shift : The fundamental change in an individuals view or a societies view of how things work in the world . Power shifts : View of people in dominant country has changed ; for the better ,in terms of newer market and emerging economies
  • 10.
     which arethe newer or emerging economies and market ? China Example of a Chinese company:Lenovo -World’s 4th largest PC manufacturer -Produces desktop, laptops, workstations, servers etc. -50.4 % owned by public shareholders -Chinese government owns about 27% of lenovo Examples of Acquisitions: -Lenovo acquired the IBM personal computing division in Feb. 2009
  • 11.
    India Example of anIndian company-Tata -Multinational conglomerate based in Mumbai, India -Largest private corporate group in India -Interest in steel, automobiles, IT, tea, hospitality -Operations in 85 countries and its companies export products and services to 80 nations -2009 annual survey by the Reputation institute ranked 11th most reputed company in the world Examples of Acquisitions: -February 2006- Tetley Tea company, $ 407 million -January 2007-Corus Group, $ 12 billion -March 2008-Jaguar and Land Rover, $ 2.3 billion
  • 12.
    Why is therea power shift? (Why are companies moving to different markets?)  More man power :Skilled resources utilisation  New world market: not tried and tested ones  Investment is cost effective: what you invest, you earn back  Bigger consumer market in the newer markets  Industry friendly governments
  • 13.
    What are thestructural changes in the future will dominate China:  Private sector companies to play major role  Emphasising raising personal income and consumption  Introducing new management systems and technical expertise  Foreign trade as major step toward economic growth  3rd largest economy in the world now and try becoming number one  Continuing to be the fastest growing economy at an average annual GDP growth rate of 10%
  • 14.
    India  12th largesteconomy in the world. Newer market, newer consumers for MNC’s  Labour force total half a million workers so production could be large scale  World’s largest democracy so capitalism can grow  More English speaking people. So popular destination for outsourcing industry .  Larger pool of managerial and technological expertise.
  • 15.
    How do weattract ,engage and dominate international business? Attract: -Identify market . -Identify the workability of the product in the market . Engage: -Identify skill resources and utilization . -Define who are the competitors. How do we market our product ? -What is it different that you offer? Dominate: -How to sustain the growth continue? -How to become the leader?
  • 16.
    Bibliography  Employment Outlook2009 Country Notes: Germany, Organisation for Economic Cooperation & Developmenthttp://www.oecd.org/country/0,3377,en_33873108_33873402_1_1_1_1_1,00.html, accessed 4 October 2009  Economic and Financial Data for Germany,Federal statistical office Germany,http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Navigation/Homepage__NT.psml, accessed 4 October 2009  Germany and the IMF, October 6, 2009,International Monetary fund, http://www.imf.org/external/pubs/ft/weo/2006/02/data/weoselgr.aspx, accessed 6 october 2009  Germany FACTS & STATISTICS,National master, Economy statistics, nation master, http://www.nationmaster.com/country/gm-germany, accessed 2 october 2009  Hitwise’s Hopkins, Feb 2007,http://weblogs.hitwise.com/heather-hopkins/2007/02/, accessed 2 october 2009
  • 17.
     Henley, John;Colin Kirkpatrick, Georgina Wilde (March 1999) ‘Foreign Direct investment in China: Recent Trends and current Policy issue. The world economy (blackwell Synergy) 22 (2) 223-243. doi : 10.111/1467- 9701.00 201,http://www3.interscience.wiley.com/journal/119093787/abstract,accessed 2 October 2009  Paradigm shift, Business dictionary .com,http://www.businessdictionary.com/definition/paradigm- shift.html,accessed 2 October 2009  Peng,M.,(2009)Global business, Southwestern Cengage Learning,ISBN:0324-58594-2  World fact book ,https://www.cia.gov/library/publications/the-world-factbook/index.html accessed 4 October 2009  Justin Fox, Can the world stop the slide, Time ,February 4,2008. http://www.time.com/time/business/article/0,8599,1706449,00.html, accessed 2 October 2009