Essential Standard1.00

Understand the role of business in the global economy.

1

Objective 1.03

Understand business in the global marketplace.

2

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

3

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

global market place

4

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?

5

Business Advantage Factors

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

• What are some examples of absolute and comparative advantages?

6

International Trade

• From where do imports come?

• From where do exports come?

• What are some examples of imports?

• What are some examples of exports?

7

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?

8

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.

9

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

10

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

11

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?

12

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?

13

International Business Environment Factors continuedFour main factors:

– Geography

– Cultural Influences

– Economic Development

– Political and Legal Concerns

14

International Business Environment Factors continued

• What is included in a country’s geography?

• How can this affect a country’s trade?

15

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?

16

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?

17

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?

18

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?

19

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?

20

Main entry modes for companies to enter the global marketplace

21

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?

22

Main international trade organizations

23

Main International Trade Organizations

• International Monetary Fund (IMF)

• World Bank

• World Trade Organization (WTO)

24