Post on 04-Jan-2016
CHAPTER 10
INTERNATIONAL BUSINESS
TRADING AMONG NATIONS
• INTERNATIONAL BUSINESS--INCLUDES ALL BUSINESS ACTIVITIES NECESSARY FOR CREATING, SHIPPING, AND SELLING GOODS AND SERVICES ACROSS BORDERS
• COMPARATIVE ADVANTAGES--SOME COUNTRIES CAN PRODUCE BETTER THAN OTHER COUNTRIES
IMPORTS
• THE THINGS WE BUY FROM OTHER COUNTRIES
• HOW WOULD WE BE ABLE TO EAT BANANAS?
• REDUCE COSTS OF SOME GOODS OR SIMPLY MAKE THEM AVAILABLE
• PERCEIVED QUALITY OF IMPORTED GOODS (MERCEDES BENZ)
EXPORTS• GOODS AND SERVICES WE SELL
TO OTHER COUNTRIES• OUR EXPORTS BENEFIT OTHER
COUNTRIES• 1 OUT OF 6 JOBS IN U.S. DEPENDS
ON INTERNATIONAL BUSINESS
INTERNATIONAL CURRENCY
• FOREIGN EXCHANGE MARKET--CONSISTS OF BANKS BUYNG AND SELLING DIFFERENT CURRENCIES
• EXHANGE RATE--VALUE OF CURRENCY IN ONE COUNTRY COMPARED TO A VALUE OF ANOTHER; AFFECTED BY SUPPLY AND DEMAND
BARRIERS TO INTERNATIONAL TRADE
• QUOTAS--SETS A LIMIT ON THE QUANTITY OF A PRODUCT THAT MAY BE IMPORTED OR EXPORTED (OPEC)
• TARIFFS--TAX THAT A GOVERNMENT PLACES ON CERTAIN IMPORTS, MAKES PRODUCT MORE EXPENSIVE
• EMBARGOES--STOP EXPORT OR IMPORT OF PRODUCT(S) COMPLETELY
MEASURING TRADE BETWEEN NATIONS
• BALANCE OF TRADE--DIFFERENCE BETWEEN TOTAL EXPORTS AND TOTAL IMPORTS– TRADE SURPLUS--FAVORABLE,
EXPORTS MORE THAN IMPORTS– TRADE DEFICIT--UNFAVORABLE,
IMPORTS GREATER THAN EXPORTS• BALANCE OF PAYMENTS--DIFF.
BETWEEN MONEY COMING IN AND MONEY COMING OUT
GLOBAL BUSINESS ORGANIZATIONS
• MULTINATIONAL COMPANY--ORG. THAT DOES BUSINESS WORLDWIDE
• GLOBAL STRATEGY--USES STANDARDIZED PRODUCT AND MARKETING STRATEGY WORLDWIDE
• MULTINATIONAL STRATEGY--EACH NATIONAL MARKET IS TREATED DIFFERENTLY
ADVANTAGES AND DISADVANTAGES OF
INTERNATIONAL BUSINESS• ADVANTAGES
– ABUNDANCE OF GOODS
– LOWER PRICES– INCREASE CHOICE– EXPAND CAREER
OPPORTUNITIES– PROMOTES
MUTUAL UNDERSTANDING
•DISADVANTAGES-COMPETITION COULD LOWER DEMAND FOR OUR GOODS-SOME WORKERS COULD LOSE JOBS-FOREIGN COMPETITION BETTER THAN US COMPANIES
WEBSITES
• www.ita.doc.gov/TD/Industry/OTEA/state
• www.census.gov/ftp/pub/foreign-trade/www
• www.census.gov/foreign-trade/balance/index.html#I
• http://globaledge.msu.edu/ibrd/• www.sbaonline.sba.gov/OIT/info/
Guide-To-Exporting