Embed Size (px)
Citation preview
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-1
1-2
Session #5
Understanding The Global Context Of
Business
Business Introduction - Teaching TeamBusiness and Management DepartmentFaculty of Economics UNPAD
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-3
Contemporary Global Economy
• Globalization– Import– Export
• Trade Agreements– General Agreement On Tariffs and
Trade– North American Free Trade
Agreement
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-4
Cost Of Global Communication
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-5
European Union Members
• Proposed (1950)– Belgium– Germany– France– Italy– Luxembourg– Netherlands
• 1973– Denmark– Ireland– United Kingdom
• 1981
– Greece• 1986
– Spain– Portugal
• 1995
– Austria– Finland– Sweden
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-6
European Union (2004)• Entered (May 1st)
– Cyprus– Czech Republic– Estonia– Hungary– Latvia– Lithuania– Malta– Poland– Slovak Republic– Slovenia
• Candidates For Membership
– Bulgaria– Croatia– Romania– Turkey
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-7
Evolution of the World Trade Organization
• 1944- Establishment of:– International Monetary Fund– World Bank
• 1947- General Agreements on Tariffs & Trade (GATT)
• 1994- World Trade Organization Established
Source: “The World Trade Organization: History, Structure, and Analysis”, Alan D. Minyard, http://www2.netdoor.com/~aminyard/
Bu
sin
ess
5-8
ASEAN-China Free Trade Area
• The agreement signed at the 10th ASEAN Summit in Vientiane, LAO PDR in November 2004, which is set to be established by 2010 for ASEAN 6 and China, and by 2015 for the newer ASEAN member
• Benefits to the ASEAN region (source: Integration,ASEAN Secretariat ) :– Enlarged Market Size and enhanced trade– Removal of trade barriers, specialisation and
enhanced economic efficiency– Improved invesment prospects
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-9
High Income Marketplaces
• U.S. & Canada• Europe• Australia & New Zealand• Japan, South Korea, Singapore,
Taiwan, & Hong Kong• Kuwait, United Arab Emirates,
Israel
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-10
• Czech Republic, Greece, &
Hungary, Poland
• Turkey
• Mexico, Argentina,
& Uruguay
Middle Income-Marketplaces-
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-11
• China
• India
• Somalia
Low Income Marketplaces
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-12
Major Market Regions• North America
– U.S.– Mexico– Canada
• Europe– Western– Eastern
• Pacific Asia- Association of Southeast Asian Nations
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-13
U.S. MajorTrading Partners
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-14
AdvantageP
rod
uce E
fficie
ntl
y
Low
High Absolute- Diamonds
Comparative
South Africa
Rest of World US
South Korea
Export
Export
Grain DVDs
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-15
National Competitive Advantage
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-16
Import-Export Balances
• Balance Of Trade
• Trade Deficits/Surpluses
• Balance Of Payments
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-17
Exchange Rates• Rates & Competition
• U.S. Economy & Foreign Trade
• Dollar U.S Exports
• Dollar U.S. Exports
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-18
International Business Management
• Going International
• Gauging Demand
• Adapting To Customer Needs
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-19
Going International
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-20
McDonald’s International Menu
• India- Maharaja Mac (Mutton)• Thailand- Samurai Pork Burger With Teriyaki
Sauce• Japan- Chicken Sandwich Flavored With Soy
Sauce & Ginger• Holland- McKroket (Semi-Crispy Shelled Beef
Patty With Creamy Mayo-Based Sauce• Philippines- Spaghetti & Fried Chicken• Hawaii- Saimin (Noodle Soup)• For More Countries Go To
McDonald's Home Page & Select A Country
Sources: E-Opinions.com, http://www.epinions.com/content_55707274884, & McDonald’s
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-21
Levels Of International Involvement• Exporters/Importers
• International Firms
• Multinational Firms
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-22
International Business Structures
Independent Agents
Licensing Arrangements
Branch Offices
Strategic Alliances
Foreign Direct Investment
Com
mitm
en
t/Ris
k
Low
High
Bu
sin
ess
Copyright 2005 Prentice- Hall, Inc. 5-23
Barriers To International Trade
• Social/Cultural Differences• Economic Differences• Legal/Political Differences
– Embargo– Tariffs– Subsidy– Protectionism– Local Content Laws– Business Practice Laws– Cartels & Dumping
