Chapter 1 We Live in a Global Economy

International Business

All business activities needed to create, ship, and sell goods and services across national borders | Global Business | Foreign Trade

Domestic Business

Making, buying, and selling goods and services within a country

Global Dependency

When items that consumers need and want are created in other countries

Why is International Business important?

Increases product choices for consumers & Increases opportunities for workers & Expand Business Opportunities & Create new investment opportunities

Global Opportunities

Companies sell to customers in other countries to expand business opportunities

Improved Political Relations | “countries that trade with one another are less likely to have wars with each other”

When did International Business start?

15,000 years ago, China, India and Japan were trading

The Phoenicians traded in the Mediterranean

Alexander the Great opened up trade with India and China

Eleventh Century | England, France, Spain and Portugal were shipping products by water

Colonization from 1500 to 1900

Inventions between 1769-1915 expanded trade

Imports

Buyer | products bought from businesses in other countries

Exports

Seller | products sold in other countries

Tariffs

Taxes increasing the cost of foreign products to protect domestic business

Embargoes

Laws banning import of products

Quotas

Restrict the number of imports

International Business Environment Factors

Geographic Conditions

Cultural and Social Factors

Political and Legal Factors 

Economic Conditions

Geographic Conditions

Climate| Crops

Terrain | Shipping

Seaports | Shipping

Natural Resources | Production

Cultural and Social Factors

Language

Education

Religion

Values

Customs

Social Relationships | Family Relations & Labor Unions

Culture

Accepted behaviors, customs, and values of a society

Political and Legal Factors

Government regulation on advertising, enforcement, safety, etc.

Economic Conditions

Limited Resources to satisfy needs and wants

Decisions regarding use of:

Time

Money

Energy

Economic Conditions

Type of Economic System

Availability of Natural Resources

Education Level of Countries Population

Types of Industries & Jobs in the Country

Money Supply

Technology | to produce and distribute goods and services

International Business Skills

History | past

Geography | Climate/Terrain

Foreign Language | Communication

Cultural Awareness | Customs/Traditions/Religion

Study Skills | Research and Changes