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Intro To Business, Ch. 3

Published on Nov 18, 2015

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PRESENTATION OUTLINE

1.

BUSINESS

IN THE GLOBAL ECONOMY
Photo by Lightmash
2.

DOMESTIC BUSINESS

MAKING, BUYING, SELLING G+S WITHIN A COUNTRY
Photo by OZinOH
3.

INT'NL BUSINESS

CREATING, SHIPPING, SELLING G+S ACROSS NATIONAL BORDERS
Photo by potomo
4.

ABSOLUTE & COMPARATIVE

OFTEN EXIST IN GLOBAL BUSINESS
Photo by exfordy
5.

ABSOLUTE ADVANTAGE

  • Country can produce G+S at lowest unit cost
  • Abundance of resources, raw materials
  • BEST AT PRODUCING SOMETHING
  • Coffee > South American countries
  • Oil > Saudi Arabi
Photo by kevin dooley
6.

COMPARATIVE ADVANTAGE

  • Country specializes in production
  • Makes it more efficiently than others
  • CHEAPEST OPPORTUNITY COST
  • GIVING UP THE LEAST
Photo by raneko
7.

IMPORT VS EXPORT

BUYING VS SELLING
Photo by sodaro,k
8.

BALANCE OF TRADE

  • Difference btwn exports & imports
  • Exports > Imports = trade surplus (sold more)
  • Imports > Exports = trade deficit (bought more)
  • Surplus said to be favorable, Deficit is unfavorable
Photo by Donnay
9.

BALANCE OF PAYMENTS

  • Difference btwn $$$ coming in vs leaving a country
  • Positive/Favorable when receive more than you pay out
  • Negative/Unfavorable when pay out more than received
Photo by Shardayyy
10.

INT'NL CURRENCY

PRESENTS A CHALLENGE WHEN TRADING BTWN COUNTRIES
Photo by stardex
11.

INT'NL CURRENCY ISSUES

  • Exchange rates
  • Affected by Balance of Payments
  • Economic Conditions
  • Political Stability
Photo by Great Beyond
12.

BSNS ENVIRONMENT

INT'NL BUSINESS REQUIRES KNOWLEDGE OF DIFFERENCES
Photo by thelearningcurvedotca
13.

INT'NL BSNS ENVIRONMENT

14.

GEOGRAPHIC FACTORS

  • Location
  • Climate
  • Terrain
  • Waterways
  • Natural Resources
Photo by sridharan01
15.

ECONOMIC FACTORS

  • Technology
  • Education
  • Inflation
  • Exchange Rate
  • Infrastructure
Photo by kevin dooley
16.

CULTURAL FACTORS

  • Language
  • Family
  • Religion
  • Customs & Traditions
  • Food
Photo by Ame Otoko
17.

POLITICAL/LEGAL FACTORS

  • Government System
  • Political Stability
  • Trade Barriers
  • Business Regulations
Photo by wbeem
18.

TRADE BARRIERS

POLITICAL ACTIONS THAT INTERFERE WITH INT'NL BUSINESS
Photo by Domiriel
19.

TRADE BARRIERS

  • Quota: limit the amount
  • Tariffs: tax on imported goods
  • Embargo: ban on imports/exports
Photo by 401(K) 2013
20.

PROMOTING TRADE

SPECIFIC ACTIONS OF GOV'TS THAT WANT TO TRADE
Photo by trilanes
21.

ENCOURAGING TRADE

  • Free Trade Zones: tax free, around seaport/airports
  • Free Trade Agreements: remove tax, btwn countries
  • Common Markets: do away with barriers, btwn countries
Photo by terrypresley
22.

FREE TRADE EXAMPLES

  • NAFTA (US, Canada, Mexico)
  • EU (European Union)
Photo by yellow book
23.

INT'NL ORGANIZATIONS

TYPES OF INT'NL BUSINESSES
Photo by Teo
24.

MULTINATIONAL COMPANY

  • "Parent" company in home country
  • Divisions or separate companies located elsewhere
  • Use both GLOBAL & MULTINATIONAL strategies
  • + more goods, jobs, expansion
  • - become dependent on MNC, influence politics
Photo by jim.greenhill
25.

GLOBAL ENTRY

WAYS TO ENTER INTO THE GLOBAL MARKET
Photo by @Doug88888
26.

LICENSING

SELL THE RIGHTS TO USE IP fOR A FEE OR ROYALTY
27.

FRANCHISING

RIGHT TO USE CO. NAME/PROCESS
Photo by Keoni Cabral
28.

JOINT VENTURE

AGREEMENT BTWN 2+ COMPANIES TO SHARE A PROJECT

Corey Brinkmeyer