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Ch 1 InternationalBusiness

International Transactions - export-import trade, directforeign investment - wholly owned subsidiaries, jointventures; licensing, franchising, outsourcing, andmanagement contracts.

More than one set of environmental variables.

Interactions between countries - Trade and foreignpolicies, Tariffs and other barriers, and Exchange rates.

Variables which are Especially Important- Infrastructure,Market structure, and Socio/cultural variables.

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The Global BusinessEnvironment

Collapse of communist economies.

Economic power of western nations.

Rise of newly industrialized nations.

Free market economies.

Belief in open markets, trade and foreign

investments as the road to economicdevelopment.

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The Global BusinessEnvironment

Trade Agreements and stabilization of tradepolicies.

Regional trade blocks. Free Market Economies.

Measures to facilitate trade.

Globalization of Markets

Big Emerging Markets

The internet

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The Global Bus. Env. - FreeMarket Economies

Privatization and deregulation.

Especially in financial services, transportation

and communications. Lower barriers to trade.

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The Global Bus. Env. -Trade Agreements

World Trade Organization (W.T.O)

North American free Trade Area (N.A.F.T.A)

European Union (E.U)

A.S.E.A.N. Free Trade Area (A.F.T.A.)

Southern Common Market (Mercosur)

Asia-Pacific Economic Cooperation(A.P.E.C)

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World Trade Organization

Created at the conclusion of the last G.A.T.T.agreement.

149 countries (as of December 2005)

Functions: Administering WTO trade agreements (e.g.,GATT, GATS, TRIPS)

Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries

Cooperation with other international organizations WTO | About the organization

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North American Free TradeAgreement NAFTA

GNP: $10.8 trillion; 406 million people

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European Union

GNP $9 trillion; 386 million people

Belgium

Denmark

France

Germany

Greece

Ireland Italy

Luxembourg

Netherlands 2004 Czech Republic

Portugal Cyprus, Estonia, Spain Hungary, Poland,

U.K. Slovenia, Bulgaria,

Austria Latvia, Lithuania,

Finland Malta, Romania, Sweden Slovakia.

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ASEAN/ A.F.T.A.

ASEAN Brunei

Indonesia

Laos

Malaysia

Myanmar

Philippines

Singapore

Thailand

Vietnam

ASEAN Free Trade

AreaGNP: 546 Billion: 512 million People

Brunei Laos

Myanmar

Malaysia

Indonesia The Philippines

Singapore

Thailand

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A.F.T.A.

CHINA

MYANMAR

BHU.

INDIA

THAILAND

TAIWAN

PHILIPPINES

MALAYSIABRUNEI

Manila

Hong KongLAOS

VIETNAM

Hamol

Halphong

BangkokCAMBODIA

Phnom Peih Ho Chi

Minh city

Kuala Lumpur

Medan

PalembangSINGAPORE

Jakarta

Bandung

Sematany

Surabaya

INDONESIA

PAPU NEWGUINEA

AUSTRALIA

M-6

BNGL.

RangoonVietlane

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Southern Cone Common Market

(Mercosur)

GNP: $1.3 trillion; 220 million people

Argentina Bolivia

Brazil Chile

Paraguay Uruguay

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Mercosur

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APEC - Asia PacificEconomic Cooperation

Australia, Brunei, Canada, Chile, China, HongKong, Indonesia, Japan, Korea, Malaysia,

Mexico, New Zealand, The Philippines, PapuaNew Guinea, Singapore, Taiwan, Thailand andthe U.S.

Forum for promoting trade liberalization and

economic cooperation

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The Global Bus. Env. -Globalization of Markets

Global linkages - trade, financial markets, tech.,comm. & transportation, etc.

Global Competition. Global market segments.

Mass Marketing and Global Strategies.

Restructuring of Organizations

Mergers, consolidations, centralization, globalproduction strategies, global supply & R&Darrangements, etc.

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The Global Bus. Env. - BigEmerging Markets.

Asia - ASEAN, CEA, India, SouthKorea.

Latin America - Mexico, Argentina,Brazil.

Africa - South Africa. Europe - Poland, Turkey

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The Global Bus. Env. -Internet

Emerging as a major internationalbusiness tool for - Sales (bothbusiness-to-business and consumer),research, advertising, andcommunications.

Problems with govt. regulations,tariffs, and taxation.

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Reasons for Expandinginto International Markets

Domestic Market Saturated

Increase market size and extend product life cycle

Enhance your return on invested capital

Enhance location advantages for suppliers or customers

Higher Sales, Economies of Scale, Risk Diversification,transfer of knowhow, global brands etc.

Growth Opportunities

Globalization of Market