Essential Standard1.00

Essential Standard1.00

Understand the role of business in the global economy.

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Objective 1.03

Understand business in the global marketplace.

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Topics

• Factors and regulations companies have to consider when doing business in the global market place

• Main entry modes for companies to enter the global marketplace

• Main international trade organizations

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Factors and regulations companies have to consider when doing business in the

global market place

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Domestic vs. InternationalBusinesses

• What activities are included in domestic business transactions? Where do they take place?

• What activities are included international business transactions? Where do they take place?

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Business Advantage Factors

• How can a country have a business advantage over another country?

• What are some examples of absolute and comparative advantages?

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International Trade

• From where do imports come?

• From where do exports come?

• What are some examples of imports?

• What are some examples of exports?

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Importing and ExportingAdvantages and Disadvantages

• What are some advantages of importing?

• What are some disadvantages of importing?

• What are some advantages of exporting?

• What are some disadvantages of exporting?

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Measuring of Trade Relations

• What is a way to measure trade relations?

• Why are measures of trade relations completed?

• Foreign debt is the amount of money a country owes to other countries.

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What is a balance of trade?

– If a country exports more than it imports, it has a trade surplus. This is favorable.

– If a country imports more than it exports, it has a trade deficit. This is unfavorable.

Measuring of Trade Relations continued

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What is a balance of payments?

– If a country receives more money in a year than it pays out, it has favorable balance.

– If a country sends more money out than it brings in, it has an unfavorable balance.

Measuring of Trade Relationscontinued

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International Currency Exchange Rate Main Factors

• Where do banks buy and sell different currencies?

• What is an exchange rate?

• What are the main factors affecting currency exchange rates?

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International Business Environment Factors

• What are the main environmental issues that could make a difference when conducting business in the global marketplace?

• How could these issues impact businesses?

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International Business Environment Factors continuedFour main factors:

– Geography

– Cultural Influences

– Economic Development

– Political and Legal Concerns

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International Business Environment Factors continued

• What is included in a country’s geography?

• How can this affect a country’s trade?

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International Business Environment Factors continued

• What main cultural factors may influence how business is conducted in the global marketplace?

• How can this affect a country’s trade?

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International Business Environment Factors Continued• What key effects of a

country’s economics that may influence conducting business in a global marketplace?

• How can this affect a country’s trade?

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International Business Environment Factors continued

• What political and legal concerns may influence business activities in a global marketplace?

• How can this affect a country’s trade?

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Main International Trade Barrier FactorsTrade barriers are restrictions to free trade.• Embargo

Why would a government place an embargo?

• QuotaWhy would a company or country set a quota?

• TariffsWhy would a government use a tariff?

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Encouragement of InternationalTrade Factors

Main factors are:– Common Markets– Free-Trade Agreements– Free-Trade Zone

• How do each of these encourage international trade?

• What are some examples of each?

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Main entry modes for companies to enter the global marketplace

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Main Entry Modes to the Global Marketplace• Franchising– How can this be used by a business as an entry mode?– What are some examples?

• Licensing– How can this be used by a business as an entry mode?– What are some examples?

• Joint venture– How can this be used by a business as an entry mode?– What are some examples?

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Main international trade organizations

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Main International Trade Organizations

• International Monetary Fund (IMF)

• World Bank

• World Trade Organization (WTO)

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