business

• Globalization:

  • integration of markets globally
  • interdependent system
  • expands trade + opening of global supply chains
  • technology makes it easier
• Why do nations trade?

  • Greater total output 
  • Lower prices
  • Wider variety of goods
  • Increased local competition
  • Expanded markets 
  • Economies of scale
• What are three major marketplaces that represent the world’s largest economies?

  • North America
  • Canada with US
  • Europe (Union)
  • Pacific Asia
  • Japan
  • China
  • India
• Markets-fastest growing economies 

  • BRICS
  • Brazil
  • agriculture
  • Russia
  • energy
  • India
  • call centers
  • engineering
  • China
  • manufacturing
  • South Africa
  • minerals
• What are the forms of competitive advantage?

  • Absolute advantage:
  • when a country produce something more efficiently than any other country
  • Ex. Canada with agriculture
  • Ex. US can create 45 airplanes when France produces 14 with the same quality
  • Comparative advantage:
  • when a country can produce certain items more efficiently than it can produce others 
  • chooses a product that can be produced more efficiently than the others so absolute advantage can be achieved
• Going international:

  1. Is there international demand for this firm’s product?
  2. Can the product be modified to fit a foreign market?
  3. Is the foreign business climate suited to imports?
  4. Does the firm have or can it get the necessary skills and knowledge to do business?
• What do you need to consider when going international?

  • the business climate of other nations
  • cultural, legal, and economic roadblocks
  • the demand for products abroad
  • the need to adapt products
• What are the global business opportunities:

  • Growth potential
  • Increased sales
  • Operating efficiencies
  • New technologies
  • More consumer choice
• What are the global business challenges:

  • Laws and customs
  • Consumer preferences
  • Ethical standards
  • Labor skills
  • Politics and economics
• What is international business management composed of?

  • Exporter
  • producing in one country and selling to others
• What is international business management composed of?

  • Importer
  • buy products in foreign markets for resale at home
• What is international business management composed of?

  • International firm
  • domestic firm with international operations
  • conducts most of the business abroad
  • Exporters and importers
  • focused on domestic business
• What is international business management composed of?

  • Multinational firm
  • planning and decision making are geared towards global markets
  • investments in other countries
  • more focused on adapting their products based in each individual market
  • control assets, factories, mines, sales offices, affiliates
• Forms of competitive advantage:

  • Balance of trade
  • exports-imports
  • Trade surplus
  • exports>imports
  • positive number
  • Trade deficit
  • exports<imports
  • negative number
• How do companies enter markets?

  • exporting and importing
  •  with independent agents 
  •  are based in the host country to work in concert with Canadian Exporting firm
  • local individual or company who represents firms interests
  • sells products
  • collects payments
  • ensure customer satisfaction
  • understands local culture and language
• • a licensing agreement
  • allows the exporter to let foreign-based firms produce, sell or distribute the product in exchange for royalties or fees
  • company can use image, trademark and brand name
  • the exporting receives royalties fee based on sales volume
  • the exporter saves time and money (foreign base)
• • a subsidiary/branch office
  • firm based in foreign country
  • may increase sales
  • possible foreign legal requirement
  • owned by firm who is exporting to that country
• • strategic alliances (joint ventures) between two independently owned firms
  • partnerships between domestic exporters and foreign-based firm
  • work together to make/produce product
• • Foreign Direct Investment
  • buying/establishing tangible assets in another country
  • ex. building manufacturing plant in brazil 
  • provides local employment
• What are some barriers to trade?

  • social differences
  • habits (shopping)
  • lifestyle
  • demographics/physical characteristics 
  • companies adapt their products
• What are some barriers to trade?

  • cultural differences
  • values
  • religion
  • ethnic groups
• What are some barriers to trade?

  • economic differences (gov involvement)
  • depends on how much the government is involved
• What are some barriers to trade?

  • legal and political differences
  • quotas 
  • limits on importing a specific product class 
  • protects domestic industries
  • embargo
  • forbidding trade from a nation or of a particular good
  • ex. US vs North Korea
  • tariffs
  • tax on imported goods
  • protects domestic producers
  • raises gov revenues
  • subsidies
  • gov pays to help a domestic business to compete with foreign firms
  • ex. agriculture 
  • low interest loans/other things
  • local content laws
  • insists for at least part of the product be made in foreign country
  • result: joint ventures/FDI
• • business practice laws
  • dumping
  • selling products in a foreign country for much cheaper than its fair market value 
  • cartels
  • association of manufacturers or suppliers with the purpose of maintaining prices at a high level 
  • restricting 
  • attempt to lower competition 
  • cartel needs to be gov run to be accepted 
  • ex. opec 
• What is a trade agreement?

  • any contractual arrangement between states/countries concerning their trade relationships
• What is the GATT?

  • general agreement on tariffs and trade
  • framework for international trade
  • reduces/eliminates trade barriers
• What is the European Union?

  • free movement of capital, people and goods
  • euro (common currency)
  • eliminated most quotas
  • uniform tariffs within union
• What is the North American Free Trade Agreement? (NAFTA/USMCA)

  • remove tariffs and trade barriers among three countries 
• What are the main four functions of management?

  • planning
  • setting goals/tactics
  • leading
  • motivating
  • guiding
  • organizing
  • budgeting
  • which days do people work
  • controlling
  • assessing
  • taking corrective action
• What are the roles of management?

  • decisional
  • informational
  • interpersonal
• • decisional
  • encourage innovation
  • resolve problems that threaten organizational goals
  • negotiate
  • decide use of organizational resources
  • come up with strategies
• • informational
  • gather info by questioning people in and out of company
  • distribute/disseminate info to employees
  • spokespeople for company
• • interpersonal
  • figurehead has ceremonial obligations
  • provide leadership to employees
  • build network of relationships with bosses/peers/employees
  • act as liaison to people inside and out of company
• What is planning?

  • what a business needs to do/best way to achieve it
  • establish goals
  • seeing if there’s a gap between a company’s desires and actual position
  • developing plans/strategies to achieve objectives 
  • implementing plans/tactics 
  • assessing the effectiveness of the plans (control)
• • additional consideration:
  • effectiveness means achieving organizational goals that have been set 
  • efficiency means achieving the greatest level of output with a given amount of input 
• Steps of planning?

  1. set goals/objectives
  2. develop strategies for success
  3. a strategy is a blueprint/layout/design/idea
  4. flexible and open for adaptation 
  5. develop action plans (tactics)
  6. the means used to gain an objective (specific/detailed)
• Strategic planning outline what?

  • market standing 
  • innovation
  • human resources
  • financial resources
  • physical resources
  • productivity
  • social responsibility
  • financial performance
• What is the SWOT analysis?

  • strength
  • internal
  • weakness
  • internal
  • opportunity
  • external 
  • threats
  • external
• How can a company have a competitive advantage?

  • differentiation strategy
  • product image
  • unique product features
  • new technologies that distinguish product from competitors 
  • cost leadership strategy
  • low cost leader in an industry by producing/selling more efficiently/economically than competitors
  • focus strategy 
  • companies concentrate on a specific regional market or consumer group 
• Two alternative plans in case of emergency?

  • contingency planning
  • attempts to identify any changes in market and company’s reactions to change 
  • crisis management 
  • organization’s plans for responding with emergencies
  • minimize damage
  • maintain operations
  • open communication