9/10/20151 INTERNATIONAL TRADE & COMPETITIVENESS.

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INTERNATIONAL TRADE INTERNATIONAL TRADE &&

COMPETITIVENESSCOMPETITIVENESS

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CompetitionCompetition

Try to win Success or Failure Success means Powerful, Efficient Powerful is a comparative word Depends on Time, Occasion, Product, Place Continuous Process

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International TradeInternational Trade

Globalization of Markets– Removing Trade Barriers

General Agreements on Tariffs and Trade – Established in 1947

– Membership grow from 19 to 120 Nations

– Tariff Reduction was spread in eight round

World Trade Organization – Establish in 1995 under the Uruguay Round

– Membership grow to 148 members by 2005

– General Agreement on Trade in Services

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Globalization of Markets– Convergence of Consumers taste & Preferences

Creating basic global market– Example Coca-Cola Soft drinks, Visa Cards, Sony Play

Station Video Games, McDonald’s hamburgers

– Removing Geographical Barriers Communication Systems Internet Development of Ports & Sea Routes

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Globalization of Production– Advantage in Labour Cost– Advantage in Capital Cost– Advantage in Materials Cost– Innovation– Technology & Research and Development– Human Resources– Government Policies & Incentives

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Globalization of Production (Examples)– IBM Think Pad X31laptop computer

Products Design in USA Case, keyboard and hard disk made in Thailand Display screen and memory in South Korea Built-in wireless card in Malaysia Micro processor and sales in USA Assembly in Mexico

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Benefits to Nation– Rapid Economic Development – Employment opportunities– Increase in National Wealth

Benefits to Firms– Cost Reduction– Economic Scale of Production– Improve Enterprise Value

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National DifferencesNational Differences

Political Systems– Democracy– Communism – Socialism

Economic Systems– Market Economy– Command Economy– Mixed Economy

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Legal Systems– Property Rights– The Protection of Intellectual Property– Product Safely and Product Liability

Economic Development– Developed Economy– Under Developed Economy– Developing Economy

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Culture Difference– Social Structure– Language– Religion– Education– Political Philosophy– Economic Philosophy

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Ethics in International TradeEthics in International Trade

Employments PracticesHuman RightsCorruptionsEnvironmental pollutions

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International Trade TheoryInternational Trade Theory

MercantilismThe Theory of Absolute AdvantageThe Theory of Comparative AdvantageThe Heckscher-Ohlin theory of factor

endowmentsThe Product Life Cycle TheoryNew Trade theory

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Porter’s Theory of National Competitive Advantage – Factor endowments– Domestic Demand Conditions– Relating & Supporting Industries– Firm Strategy, Structure, and Rivalry

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Implication for Manager– Location– First Mover Advantage– Government Policy

Case Study– IBM– LOGITECH– ArcelorMittal Steel

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Regional Economic IntegrationRegional Economic Integration

Political UnionEconomic UnionCommon MarketsCustom Union

Case Study European Union SAARC

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The Foreign Exchange MarketThe Foreign Exchange Market

Function of Foreign Exchange MarketCurrency ConversionForeign Exchange RiskExchange Rate Determination

– Interest Rate and Inflation– Foreign Exchange Reserve– Investor Psychology

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International Monetary SystemInternational Monetary System

Gold StandardFixed Exchange Rate SystemPegged Exchange Rate SystemFloating Exchange Rate SystemConvertibility

– Partial– Full

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Strategy of International TradeStrategy of International Trade

International Strategy

Localization Strategy

Transnational Strategy

Global Standardization Strategy

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Strategy Requirement– Value Creation– Cost Reduction Pressure– Local Responsiveness– Economic Scale of Production– Leveraging Product & Competencies– Creating a Value Chain

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Entry Strategy– Which Foreign Markets– Timing of Entry– Scale of Entry

Modes of Entry– Exporting– Turnkey Projects, & Greenfield Venture – Licensing, Franchising, & Joint Ventures

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Modes of Entry– Acquisition & Mergers– Strategic Alliances

Core Competencies & Entry Mode– Technical Know-how– Management Know-how– Human Resources Advantage

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Other IssuesOther Issues

Global Research & DevelopmentHuman Resources ManagementInternational Financial ManagementInternational Accounting StandardsInternational Logistics

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9/10/20151 INTERNATIONAL TRADE & COMPETITIVENESS.

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Transcript of 9/10/20151 INTERNATIONAL TRADE & COMPETITIVENESS.