Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Global economy

544 views

Published on

  • Be the first to comment

Global economy

  1. 1. GLOBAL ECONOMYGLOBAL ECONOMYAN INTERNATIONAL MARKETER’SAN INTERNATIONAL MARKETER’SMINEFIELDMINEFIELD
  2. 2. BASIC THEORIES OF WORLD TRADEBASIC THEORIES OF WORLD TRADE•ABSOLUTE ADVANTAGE: Vietnam and GermanyABSOLUTE ADVANTAGE: Vietnam and Germany•COMPARATIVE ADVANTAGE: Few differences inCOMPARATIVE ADVANTAGE: Few differences inproduction activitiesproduction activities•COMPETITIVE ADVANTAGE: Strong local competitionCOMPETITIVE ADVANTAGE: Strong local competitionbenefits a national industry.benefits a national industry.Core businessCore businessCore processCore processCore competenceCore competence
  3. 3. BALANCE OF PAYMENTSBALANCE OF PAYMENTS•Balance of payments (BOP): an accountingBalance of payments (BOP): an accountingrecord of the transactions between the residentsrecord of the transactions between the residentsof one country and the residents of the rest of theof one country and the residents of the rest of theworld over a given period of time.world over a given period of time.•Current account: A principal part of the balanceCurrent account: A principal part of the balanceof payments statement that includes the key sub-of payments statement that includes the key sub-accounts ofaccounts ofGoods: physicalGoods: physicalServices: royalties, transportation services…Services: royalties, transportation services…Unilateral transfers: Donations, personal gifts…Unilateral transfers: Donations, personal gifts…
  4. 4. BALANCE OF PAYMENTSBALANCE OF PAYMENTS• CAPITAL ACCOUNT: Records a country´ sCAPITAL ACCOUNT: Records a country´ sinternational financial assets and liabilities overinternational financial assets and liabilities overthe BOP periodthe BOP period• PORTFOLIO INIVESTMENTS: Investments suchPORTFOLIO INIVESTMENTS: Investments suchas the purchase of stocks and bonds, over whichas the purchase of stocks and bonds, over whichinvestors assume no direct management control.investors assume no direct management control.• FOREIGN DIRECT INVESTMENT: InvestmentsFOREIGN DIRECT INVESTMENT: Investmentsover which investors assume some if not allover which investors assume some if not alldirect management control.direct management control.
  5. 5. EXCHANGE RATESEXCHANGE RATES• The ration that measures the value of oneThe ration that measures the value of onecurrency in terms of another currencycurrency in terms of another currency• APPRECIATION: An increase in value or price ofAPPRECIATION: An increase in value or price ofa currencya currency• DEPRECIATION: A decrease in value price of aDEPRECIATION: A decrease in value price of acurrency.currency.
  6. 6. CAUSES OF EXCHANGE RATECAUSES OF EXCHANGE RATEMOVEMENTSMOVEMENTS•Currency´ s value rises: Domestic businessesCurrency´ s value rises: Domestic businessesfind it more difficult to compete internationallyfind it more difficult to compete internationally•Currency´ s value falls: foreign goods becomeCurrency´ s value falls: foreign goods becomemore expensive, domestically produced goodsmore expensive, domestically produced goodsbecome cheaper to foreign buyers.become cheaper to foreign buyers.
  7. 7. MANAGED CURRENCIESMANAGED CURRENCIES• FREELY FLOATING CURRENCY: A currencyFREELY FLOATING CURRENCY: A currencywhose exchange rate is determined by thewhose exchange rate is determined by themarket forces of supply and demandmarket forces of supply and demand• SOFT CURRENCY: A currency that attracts littleSOFT CURRENCY: A currency that attracts littleglobal demandglobal demand• PEGGED CURRENCY: A currency whose price isPEGGED CURRENCY: A currency whose price isfixed by its government to another currency orfixed by its government to another currency orbasket of currencies.basket of currencies.
  8. 8. GLOBAL OUTSOURCINGGLOBAL OUTSOURCINGhttp://wtso.net/movie/134-The_Simpsons_1717_Kiss_Kiss_Ban

×