Transcript of Introduction international business
- 1. Chapter 2 The Global Context of Business
- 2. Sr. Chapter Chapter HeadingNo.No.1. 3 Understanding the
Global context of business (031012)2. 4 Conducting Business
Ethically and Responsibly3. 6 Organizing the Business Enterprise4.
7 Understanding Entrepreneurship and Small Business5. 8 Managing
Human Resources6. 9 Understanding Employee Motivating, Satisfying
and Leadership7. 11 Understanding Marketing Processes and Consumer
Behavior8. 16 Managing Quality and Productivity9. 17 Managing
Information Systems and Communication Technology10. 19
Understanding Money and Banking11. 20 Intermediate Term and Lease
Financing
- 3. Marks Distribution50 Terminal Examination20 Mid Term
Examination15 Quizzes15 Final Assignment 3
- 4. We are in the midst of agreat transition from
narrownationalism to internationalpartnership. ~ Lyndon Baines
Johnson
- 5. Chapter Review Discuss the rise of international business,
describe the major world marketplaces. Explain how competitive
advantage, import- export balances, exchange rates, and foreign
competition shape international business strategies.
- 6. Chapter Review Discuss what factors influence whether a
company should engage in international business. Identify different
levels of international involvement and international
organizational structure. Describe key barriers to international
trade.
- 7. Key Topics The rise of global business Major world
marketplaces and trading partners Influences on international
business International business management The impact of
differences among nations
- 8. Definitions Quota: restriction on the number of certain type
of product that can be imported into a country. Embargo: complete
ban on imports and exports, imposed by a government for political
reasons. Tariff: tax levied on imported products. Subsidy:
government payments to help a domestic business compete with
foreign firms. Protectionism: the practice of protecting domestic
business against foreign competition.
- 9. DefinitionsGross domestic product (GDP) is one the primary
indicators used to gauge the health of a countrys economy. It
represents the total dollar value of all goods and services
produced over a specific time periodOrThe monetary value of all the
finished goods and services produced within a countrys borders in a
specific time period, though GDP is usually calculated on an annual
basis. It includes all of private and public consumption,
government outlays, investments and exports less imports that occur
within a defined territory.Per capita income or income per person
is a measure of mean income within an economic aggregate, such as a
country or city. It is calculated by taking a measure of all
sources of income in the aggregate (such as GDP or Gross National
Income) and dividing it by the total population. It does not
attempt to reflect the distribution of income or wealth 9
- 10. 1. The key drivers to globalization Global market Drivers:
Convergence Similar customer needs, Global customers, Transferable
marketing Trade policies, Technical Scale economies,
GovernmentStandards, host government, Global Sourcing efficiencies
Cost Influence policies Strategies Countries costs, Advantages High
product development costs Interdependence, Competitors global High
exports/imports, Global Competition
- 11. a. Globalization Is Gaining SpeedThe world economy
isbecoming a single,interdependent systemExport:Domestic product
soldabroadImport:Foreign product solddomestically
- 12. b. Globalization Is GainingSpeed Example: Asian financial
markets in the late 90s directly affects stock markets worldwide.
Discussion: what product from other countries do you useconsume?
Why have you chosen it?
- 13. c. Categorizing Economies High Income Countries: Per capita
income greater than $9,386 Middle Income Countries: Per capita
income between $765 and $9,386 Low Income Countries: Per capita
income of less than $765 Discussion: what countries fall into each
category?
- 14. d. Major World Marketplaces North America NAFTA Europe EU
Pacific Asia Do we have any economic agreement with other
countries. What are they?
- 15. The North American Marketplace (NAFTA) Canada United States
MexicoCopyright 2003 Prentice Hall, Inc. 2 - 15
- 16. Europe and the Nations of the European Union Austria
Luxembourg Portugal Sweden Belgium Netherlands Spain United Kingdom
Denmark Finland France Germany Greece Ireland Italy Ireland
ItalyCopyright 2003 Prentice Hall, Inc. 2 - 16
- 17. The Nations of ASEAN Brunei Indonesia Malaysia Philippines
Singapore Thailand VietnamCopyright 2003 Prentice Hall, Inc. 2 -
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- 18. Pacific Asia RepresentsEnormous Business Potential
Projections for 2010 (in millions) 500 In less than a 450 decade,
Asian 400 415 432 language 350 speakers on 300 the web will 250 far
exceed 200 English 150 speakers 100 96 50 34 0 English Japanese
Chinese KoreanSource: Time Global Business, Nov. 2001 2 - 18
- 19. 2. Competitive Advantage Absolute Advantage: when one
country can produce a product cheaper andor higher quality than any
other country. Ex. OPEC Comparative Advantage: when one country can
produce certain goods or services more efficiently and effectively
than others. Ex. US software
- 20. Competitive advantages When competitive advantage is
materialized?When a firm earns persistently higher rate of profit
over its rivals. Determinants of profit level 1- Value of company
products in customers eyes. 2- Company production cost.
- 21. Competitive advantage It can be created in certain
industrial field, through the adoption of low-cost- differentiation
strategy. M. Porter
- 22. National Competitive Advantage Factor conditions Demand
conditions Related and supporting industries Strategies,
structures, and rivalries
- 23. 3. Import/Export Balances Balance of Trade Trade Deficits
Trade Surpluses Balance of PaymentsThe total flow of money into or
out of an economy
- 24. 3a. Exchange RatesHeavily Impact Global Trade When an
economys currency is strong: Domestic companies find it harder to
export products Foreign companies find it easier to import products
Domestic companies may move production to cheaper sites in foreign
countries Implications for balance of trade?
- 25. Exchange RatesHeavily Impact Global Trade When an economys
currency is weak: Domestic companies find it easier to export
products Foreign companies find it harder to import products
Foreign companies may invest in production facilities Implications
for balance of trade?
- 26. The U.S. Economy Has a Growing Trade Deficit U.S. Imports
& Exports U.S. Trade Deficit (in billions) (in billions) 1600
$400,000 1400 350,000 344,716 1200 300,000 1000 250,000 255,971 800
200,000 600 150,000 166,898 400 100,000 35,666 105,932 102,113 200
28,266 95,947 97,039 78,857 50,000 68,949 0 0 1990 1991 1992 1993
1994 1995 1996 1997 1999 2000 1998 1990 1991 1992 1993 1994 1995
1996 1997 1998 1999 2000 Imports ExportsCopyright 2003 Prentice
Hall, Inc. 2 - 26
- 27. Is there Can the Is the foreign Does the international
product be business firm have or demand for YES modified to fit YES
YES climate suited can it get the the firms a foreign to imports?
necessary product? market? skills and NO NO NO knowledge to do
business NO abroad? YES Stay Domestic Go InternationalCopyright
2003 Prentice Hall, Inc. 2 - 27
- 28. 4. Levels of International Involvement Importer &
Exporter International Firms Multinational Firms
- 29. International OrganizationalStructures HIGH INVOLVEMENT
Foreign Investment Private capital investment by firms of one
country into those of another. Strategic Alliances a relationship
between two or more parties to pursue a set of agreed upon goals or
to meet a critical business need while remaining independent
organizations Branch Offices Licensing Arrangements Independent
Agents LOW
- 30. 5.Barriers to International Trade Legal & Political
Social & Cultural Differences Differences Economic
Differences
- 31. Take Time to Learn the Culture Thoroughly! Este es nuestro
nuevo auto: Ha, ha, ha, ha, el NOVA! ha, ha!!!
- 32. The Customers LanguageA Critical Business Success Factor In
the U.S. alone, 18% of the population does not speak English at
home. Only 48% of the worlds Web users are native English speakers.
Consumers are four times more likely to buy a product on the
Internet if the website is in their preferred language.Source: Time
Global Business, Nov. 2001
- 33. Economic DifferencesTo operate effectively in
anothercountry, businesses must know when,and to what extent, the
government isinvolved in a given industry.
- 34. Legal & Political Differences Quotas, Tariffs, &
Subsidies Protectionism Local Content Laws Business Practice Laws
Day to day operations Cartels Dumping
- 35. Relate to Pakistan 35
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- 40. Potentials Population 170 million Growing consumption Cheap
labor According to approximations, labor in Pakistan is $ 0.36 an
hour; in India, it is $ 0.58 an hour and in China, it is $ 0.70 an
hour Feasible regulatory conditions As compared to india Minerals
Coal, Copper, Gold, Silver, Dolomite, Gypsum, Lime stone, Natural
Gas, Iron core, Rock salt, Bauxite, Marble, Gems, China Clay, Zinc,
Lead and Chromite are some of Pakistans potential 40
- 41. MacroPotentials economic indicators Large More jobs scale
job creation Coal reserves, iron and gems Agriculture Pakistan is
the 4th largest producer of milk Increased manufactu Improving
purchasin ring g power Fruit and agriculture processing Greater
demand of Lower good and poverty services Greater consumpti on
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- 42. Snapshot of Sessional marks Introduction CHAPTER NO 3 NAME
COMPANY NO. 4-2-12 11-2-12 Aruba 1 1 Lunba 1 1 Ayesha 1 1 Faria 2 1
Safia Tabassum 2 1 Mashal 3 1 Namreen 3 1 Asma 3 1 Umair Iqbal 4 1
Shiraz Qureshi 4 1 Ismail 4 1 Anus 4 1 Mir 5 1 Saad 5 1 Najeeb
Aslam 5 1 M. Ejaz 5 1 42