Global Opportunities 1 Describe the role of small business and entrepreneurship in today’s...

Global OpportunitiesGlobal Opportunities

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Describe the role of small business and entrepreneurship in today’s multicultural, global economy.

Explain why the global market is important.

Discuss how to recognize and examine current trends that provide both domestic and global opportunities for entrepreneurs.

Section 4.1 Global Entrepreneurship

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The countries of the world are linked in a global economy made possible by free trade agreements and advances in communications technology.

International markets present opportunities in all regions of the world.


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The Global Economy

Entrepreneurship plays an important role in today’s multicultural global society.

Technological advances and changes in trade barriers have created a global economy.

global economy the interconnected economies of the nations of the world



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The Global Economy

International markets provide opportunities for entrepreneurs to engage in importing and exporting goods and services.

importing the buying or bringing in goods from other countries to sell


exporting the selling and shipping of goods to other countries


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Trade Barriers Have Fallen

The World Trade Organization works to eliminate or lessen

trade barriers and tariffs.

trade barriers a restriction on goods entering or leaving a country


tariffs a type of trade barrier imposed by a government as a tax on imported or exported goods

The World Trade Organization is a global coalition of governments that makes the rules that govern international trade.


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Global Opportunities

A nation’s economy is measured by its gross domestic product (GDP).

gross domestic product (GDP) the total value of all goods produced in a country during the year



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To conduct international business successfully, you must understand foreign customs and cultures.

Whether you choose to import or export products, the international market presents many profitable business opportunities.

Section 4.2 Ways to Enter the Global Market

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Tips for Showing Respect

It is important to show respect and understanding for the cultures of the people with whom you do business. An interpreter will help ensure that your communications to others are accurate.

interpreter a person who translates one language into or from another


Tips for Showing Respect

Section 4.2 Ways to Enter the Global Market 9

Dress conservatively and in dark colors.

Do not correct other people’s language.

Be prepared to remove your shoes in some situations.

Do not comment negatively on food.

Do your homework before a meeting.

Build a relationship before you do business.

Bring your own interpreter.

Understanding how other countries conduct business is important to your success as an entrepreneur.


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Strategies for Entering International Markets

One good resource in finding an international market for your product or service is using Standard Industrial Trade Classification (SITC) codes.

Standard Industrial Trade Classification (SITC) codes a system that details the kinds of products that are traded in specific countries and how well certain products sell in different markets



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Other Sources of Help

There are many sources to help entrepreneurs locate the best market for their products or services. Entrepreneurs who want to sell online should contact the U.S. Chamber of Commerce regarding its International Business Exchange (IBEX).

International Business Exchange (IBEX) the electronic commerce system that allows businesses to find trading partners and sell products and services anywhere in the world



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Other Sources of Help

A small business with products on the government’s “best prospect” list will gain the chance to go on a trade mission.

“best prospect” list a list compiled by the government of products that other countries want to purchase


trade mission an opportunity offered by the U.S. government and private agencies to small businesses to travel to other countries to meet with foreign agents, distributors, or potential business partners


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Deciding on a Product to Export

To be successful as an exporter of consumer products, it helps to market to countries to sell where people have enough disposable income.

disposable income money people have to spend after paying for necessary expenses


Research the market.

Talk to potential customers.

Where to Find Import Opportunities


Attend trade shows.

Read trade publications and catalogs.

Use a trade intermediary

License foreign businesses to sell your products

Where to Find Export Opportunities


Establish an e-commerce web site

Establish a foreign joint venture

Hire a freight forwarder

Use an export management company


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Deciding on a Product to Export

An entrepreneur can expand a business into a foreign market by using a trade intermediary.

trade intermediary an agency that serves as a distributor in a foreign country



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Some entrepreneurs find it helpful to establish a foreign joint venture in order to gain entry into a new global market.

foreign joint venture an alliance between an American small business and a company in another nation



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An entrepreneur wishing to export goods or services to another country may employ the services of an export management company and/or a freight forwarder.

export management an organization that handles all the tasks related to exporting for a manufacturer


freight forwarder a company that arranges shipments and prepares necessary exporting paperwork


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Things to Consider Before Going Global

When entrepreneurs think about going global they should make sure they have:


solutions

a new idea

a market for the product or service

the ability to handle risk and frustration

good contacts in other countries


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Overseas markets represent an enormous economic opportunity for e-commerce enterprises, but doing business in another country can be complex.

Entrepreneurs must be concerned with language, currency, culture, and country regulations.

International E-Commerce


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Tech Termsexchange rate

the rate at which one currency is converted into another

graphic user interface

the design, content, and navigation of a Web site

import regulations the rules that govern the types and amounts of products that can be sold, packing that can be used, and taxationreal time the actual time that something takes place translation the process of changing one written communication into a second language with the same meaning

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