International Business & Trade
Page 1: Introduction to International Business & Trade
Understanding the importance of finding a niche in the global business environment.
Overview of the dynamics and behavior influencing 21st century business challenges.
Richell C. Ganancial, Instructor.
Page 2: Definition of International Business & Trade
Cross-border Transactions: Movement of goods and services across national borders.
Encompasses imports and exports, termed Global Business or International Marketing.
Involves sales and commercial transactions like selling products internationally (e.g., in the US, Japan, Europe).
Page 3: Nature of International Transactions
Types of transactions include investments, foreign currency exchange, fund transfers, logistics, etc.
Activities conducted globally to meet objectives of individuals or organizations.
Facilitates market expansion and access to goods/services otherwise unavailable.
Drives competitiveness, resulting in better pricing and cheaper products for consumers.
Page 4: Benefits of International Business
Global trade fosters economic growth.
Nations focus on producing goods where they have comparative advantages.
Key benefits include:
New Markets: Access to diverse customer bases.
Diversification: Spreading business risks.
Access to Talent: Leveraging global skills.
Page 5: Additional Benefits of International Trade
Provides consumers with various options while boosting competition, encouraging efficiency and quality.
Aspects include:
Competitive Advantage: Improved market position.
Integration of Economies: Fostering economic interdependence.
Foreign Investment Opportunities: Attracting global capital.
Page 6: Reasons for Internationalizing Business
Objective: Expanding market share beyond domestic borders.
Concept: Enhancing customer base, revenue, competitiveness, cost efficiency, and technological access.
Page 7: Understanding Globalization
Definition: Deepening relationships and interdependence among countries.
Links countries, institutions, and individuals through trade, finance, and socio-cultural aspects.
Facilitates access to products and services across diverse economic backgrounds.
Page 8: Factors Driving Globalization
Equity: Investments and fair trade practices.
Bonds: Financial relationships enhancing trade.
Reduction of Trade Barriers: Easing restrictions aids free trade.
Development of trading blocs promotes cooperative commerce.
Page 9: Additional Factors Causing Globalization
Growth of the Internet & Technology: Facilitating faster communication and transactions.
Transport Costs: Advancements in logistics reduce barriers to trade.
Growth of Multinational Corporations: These entities drive cross-border trade.
Page 10: Objectives for Globalizing Business
Striving for an interconnected global community.
Focus on achieving socio-economic, political, and cultural transformations.
Involves active trade across borders to integrate economic interests globally.
Page 11: Salient Features of Globalization
Trade Liberalization: Reducing tariffs and trade barriers.
Economic Integration: Promoting shared economic activities across nations.
Free Trade: Engaging in import/export without restrictions.
Page 12: Second Perspective on Globalization
Social Relations: Achieving distance-less and borderless interactions per Baylis and Smith.
Features include:
Privatization: Enhancing corporate efficiencies.
Increased Collaboration: Countries working together for mutual benefits.
Economic Reforms: Transition towards market economies and democratic governance.
Page 13: Stages of Globalization
Broad Economic Level: Increased economic interdependence via cross-border flows of goods and services.
Specific Company Level: Transition from domestic-focused strategies to international market engagement.
Domestic Companies: Focus on home markets, enhancing core capabilities.
International Companies: Gradually recognizing overseas markets while largely domestic.
Multinational Companies: Fully committed to adapting strategies for diverse markets.
Global Transnational Corporation: Strategically balancing standardization with local customization.
Page 14: Essential Conditions for Successful Globalization
Business Freedom: Minimal government restrictions.
Facilities and Resources: Infrastructure and human resources available for businesses.
Government Support: Legal frameworks enhancing global competitiveness.
Competitiveness and Strategies: Focusing on low costs and quality products to gain advantages.
Page 15: Scope of Global Business
Global Marketing: Adapting strategies to fit cultural contexts across regions.
Global Technology: Accessing innovations to boost efficiency.
Global Finance & Investment: Understanding economic regulations and managing cross-border workforce issues.
Page 16: Flows in Global Business
Capital Flow: Accessing capital markets for expansions.
Labor Flow: Recruiting a diverse and skilled workforce.
Product Flow: Accessing quality suppliers and raw materials.
Page 17: Service and Information Flow in Global Business
Service Flow: Exchanging services like legal, accounting, and professional expertise.
Information Flow: Utilizing information for success in the global market.
Technology Flow: Transferring advanced technologies to enhance competitiveness.
Page 18: Challenges in Global Business
Operational complexities from emerging markets and economic nationalism.
Factors affecting global operations include:
Political risks, tariffs, and regulations.
Cybersecurity and data privacy concerns.
Competitive pressures.
Page 19: Factors Affecting Country's Business Environment
Political Factors: Policies and regulations impacting global operations.
Economic Factors: Currency stability and economic performance.
Cultural Factors: Understanding local cultures and traditions is crucial.
Page 20: Business Environment Attractiveness Indicators
Political factors such as laws and relations affecting taxes, labor, and infrastructure.
Political stability and changes in regulations impact international business success.
Page 21: Economic Factors in Business Environment
Currency values and exchange rates impact trade.
Monetary Systems: Stability and predictability are essential.
Inflation Rates: Affect costs and pricing strategies.
Purchasing Power Parity: Indicators of economic strength between countries.
Page 22: Cultural Factors in Business
Engaging with local customs, language, and societal norms.
Recognizing the importance of cultural intelligence in business relations.
Page 23: Environmental Factors in Business
Importance of sustainability and adherence to environmental regulations in global expansion.
Addressing climate change and implementing policies for environmental protection.
Page 24: Forms of International Business
Joint Ventures: Collaboration between local and international firms.
Exporting: Producing locally and selling abroad.
Licensing: Rights granted for using intangible assets.
Franchising: Allowing a local entity to use a brand under strict compliance.
Page 25: More Forms of International Business
Management Contracts: Providing operational support for fees.
Turnkey Projects: Complete project management until operational handover.
Foreign Direct Investment (FDI): Investing beyond capital, sharing management and technology.
Page 26: Liberalization vs. Deregulation
Trade Liberalization: Easing government controls on trade.
Trade Deregulation: Complete removal of restrictions on businesses.
Page 27: World Trade Organization (WTO) Overview
Established on January 1, 1995, to reform global trade post-WWII.
Covers trade in goods, services, and intellectual property.
Provides dispute settlement procedures and promotes global trade.
Page 28: WTO Roles and Achievements
Promotes liberalization and globalization of trade.
Implements significant tariff reductions (40% decline).
Addresses significant issues in agriculture, textile, and investment.
Page 29: Major Challenges in Global Trade
Economic warfare, geopolitical tensions, and state capitalism.
Leadership challenges and various international instabilities.
Page 30: Additional Challenges in Global Trade
Power Distribution Issues: Economic disparities among nations.
Crisis in Energy & Food Supplies: Impacting global markets.
Supply Chain Disruptions: Affecting operational logistics.
Climate Change: Posing long-term risks to global trade.
Page 31: Types of Trade Integration
Preferential Trade Area: Reduced tariffs among member nations.
Free Trade Area: Elimination of trade barriers.
Customs Union: Common tariffs against non-member countries.
Common Market: Free trade plus free movement of labor and capital.
Page 32: Major Trading Bloc: ASEAN
Members: Including Brunei, Cambodia, Indonesia, and others.
Goals: Accelerate economic growth, promote regional stability and development.
Page 33: Major Trading Bloc: EU
Members: A list of European countries including Germany, France, Italy, etc.
Goals: Create a regional free-trade association and pursue sustainable development and social justice.
Page 34: Major Trading Bloc: MERCOSUR
Members: Argentina, Brazil, and several South American nations.
Goals: Enhance business competition and economic integration with social focus.
Page 35: Major Trading Bloc: USMCA
Members: Canada, Mexico, USA.
Goals: Eliminate trade barriers, promote investment, protect intellectual property.
Page 36: Influence of Technology on Business
Growth of e-commerce due to internet advancements.
Companies face operational risks, pushing towards diversification.
Increased focus on social and environmental responsibility by corporations.
Page 37: Standardization vs. Differentiation
Standardization: Global representation of business.
Differentiation: Adapting to local market conditions for competitiveness.
Page 38: Conclusion
Emphasizes the importance of balancing business relationships.
Quote on the value of friendship in business relations.
Contact information for Richell C. Ganancial.