CHAPTER 7 – INTERNATIONAL BUSINESS
Use the Business Management book and the Internet to answer the following.
SECTION 7.2 – The Global Economy
Over the past 50 years, companies from all over the world have begun operating globally.
Consumers everywhere own products made in other countries.
Global Economy:
Factors that have led to the rise of the Global Economy:
Improvements in __________________________ have had an enormous impact on
international trade.
Development of the Internet also has led to _______________________, which has enabled
even small companies to reach consumers in foreign countries by marketing their products on
web sites.
Political changes that have taken place since the late 1980s have dramatically increased
opportunities for businesses. As a result of the end of the _____________________ with
Russia and improved relations with China, American companies have earned billions of dollars
selling products and services in markets from which they were previously excluded.
Use the Internet to research a recent politically-related change in international
commerce. Write a 1-2 paragraph summary of the change and the potential effect it will
have on U.S. business trade. Include specifics from your research to support your
summary.
Free Trade Area:
Give an example of a free trade area:
What is NAFTA?
Benefits:
Detriments:
Companies can sell their products or services in foreign countries in various ways. Small
companies often work through local companies, which are familiar with local markets. Large
companies often establish sales, manufacturing, and distribution facilities in foreign countries.
Foreign Intermediary:
Advantages:
Disadvantages:
Licensing Agreement:
Advantages:
Disadvantages:
Strategic Alliance:
Advantages:
Give 2 examples from recent years:
Multinational Corporation
How many countries have a Wal- Mart? Why is this company so successful in
other countries?
How many countries have a McDonalds? Why is this company so successful in
other countries?
Challenges of International Environment:
1.
List 3 reasons a country might import goods.
2.
How do countries restrict international trade?
3.
Use the concept of comparative advantage to explain why managers hire assistants
even if they could do the work better themselves.
4.
Explain how changes in the exchange rate affect importers, exporters, and consumers.
5.
What are some of the challenges facing business managers who work in foreighn
countries?