Essential Standard 1 00 Understand the role of

Essential Standard 1. 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? 7

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. 9

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. 10

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. 11

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? 12

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? 13

International Business Environment Factors continued Four main factors: – Geography – Cultural Influences – Economic Development – Political and Legal Concerns 14

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? 20

Main entry modes for companies to enter the global marketplace 21

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? 22

Main international trade organizations 23

Main International Trade Organizations • International Monetary Fund (IMF) • World Bank • World Trade Organization (WTO) 24