Essential Standard1.00
Understand the role of business in
the global economy.
1
Objective 1.03
Understand business in the global
marketplace.
2
Topics
• Factors and regulations companies have
to consider when doing business in the
global market place
• Main entry modes for companies to enter
the global marketplace
• Main international trade organizations
3
Factors and regulations companies have
to consider when doing business in the
global market place
4
Domestic vs. International
Businesses
• What activities are included in domestic
business transactions? Where do they
take place?
• What activities are included international
business transactions? Where do they
take place?
5
Business Advantage Factors
• How can a country have a business
advantage over another country?
• What are some examples of absolute and
comparative advantages?
6
International Trade
• From where do imports come?
• From where do exports come?
• What are some examples of imports?
• What are some examples of exports?
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Importing and Exporting
Advantages and Disadvantages
• What are some advantages of importing?
• What are some disadvantages of
importing?
• What are some advantages of exporting?
• What are some disadvantages of
exporting?
8
Measuring of Trade Relations
• What is a way to measure trade relations?
• Why are measures of trade relations
completed?
• Foreign debt is the amount of money a
country owes to other countries.
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Measuring of Trade Relations
continued
What is a balance of trade?
– If a country exports more than it imports, it
has a trade surplus. This is favorable.
– If a country imports more than it exports, it
has a trade deficit. This is unfavorable.
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Measuring of Trade Relations
continued
What is a balance of payments?
– If a country receives more money in a year than it
pays out, it has favorable balance.
– If a country sends more money out than it brings in, it
has an unfavorable balance.
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International Currency Exchange
Rate Main Factors
• Where do banks buy and sell different
currencies?
• What is an exchange rate?
• What are the main factors affecting
currency exchange rates?
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International Business Environment
Factors
• What are the main
environmental issues that
could make a difference
when conducting
business in the global
marketplace?
• How could these issues
impact businesses?
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International Business Environment
Factors continued
Four main factors:
– Geography
– Cultural Influences
– Economic
Development
– Political and Legal
Concerns
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International Business
Environment Factors continued
• What is included in a
country’s geography?
• How can this affect a
country’s trade?
15
International Business
Environment Factors continued
• What main cultural
factors may influence
how business is
conducted in the global
marketplace?
• How can this affect a
country’s trade?
16
International Business
Environment Factors Continued
• What key effects of a
country’s economics that
may influence conducting
business in a global
marketplace?
• How can this affect a
country’s trade?
17
International Business
Environment Factors continued
• What political and legal
concerns may influence
business activities in a
global marketplace?
• How can this affect a
country’s trade?
18
Main International Trade
Barrier Factors
Trade barriers are restrictions to free trade.
• Embargo
Why would a government place an embargo?
•
Quota
Why would a company or country set a quota?
•
Tariffs
Why would a government use a tariff?
19
Encouragement of International
Trade Factors
Main factors are:
– Common Markets
– Free-Trade Agreements
– Free-Trade Zone
• How do each of these encourage
international trade?
• What are some examples of each?
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Main entry modes for companies to enter
the global marketplace
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Main Entry Modes to the Global
Marketplace
• Franchising
– How can this be used by a business as an entry mode?
– What are some examples?
• Licensing
– How can this be used by a business as an entry mode?
– What are some examples?
• Joint venture
– How can this be used by a business as an entry mode?
– What are some examples?
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Main international trade organizations
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Main International Trade Organizations
• International
Monetary Fund (IMF)
• World Bank
• World Trade
Organization (WTO)
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