Business w03 Competing in a Global Market @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id

Competing in A Global Market

Jakarta, September 2007

Week 3

Content :

Barrier to international trade

The rise of international business

International business management

What is globalization ?

Process by which

the world economy is becoming

a single interdependent system

(Griffin, 2004)

Intro …

Which one do you like ?

Intro …

Which one you recognize more ?

Intro …

Is this your favorite spot ?

Intro …

What are exports and imports ?

Imports are products made or grown abroad but

sold domestically;

while exports are products made or grown domestically but shipped and sold abroad

Intro …

The Contemporary Global Economy

Several forces have combined to spark & sustainglobalization:

1. Government and businesses are aware of benefits of globalization to businesses and shareholders.

2. New technologies make international travel, communication and commerce much faster and cheaper.

3. Competitive pressure sometimes force a firm to expand into foreign markets to keep up with competitors.

Intro …

Trade Agreements

☯ General Agreements on Tariffs and Trade (GATT)

☯ North American Free Trade Agreement (NAFTA)

☯ European Union (EU)

☯ World Trade Organization (WTO)

Content :

The North American Marketplace and The Nations of NAFTA

Content :

The Major World Marketplace

Per capita income is the average income per person.

1. High-income countries: those with per capita income greater than $ 9,386.

2. Middle-income countries: those with per capita income of less than $ 9,386 but more than $ 765.

3. Low-income countries (developing countries): those with per capita income of less than $ 765.

Content :

The Major World Marketplace

NORTH AMERICA� World’s largest marketplace and most

stable economy.� U.S. dominates.

EUROPE� Western Europe is a mature but

fragmented marketplace.� Eastern Europe has gained

importance as a marketplace and a producer.

PASIFIC ASIA� Nations of the ASEAN are an

important force in the world economy and a major source of competition for north American firms.

Content :

Europe and The Nations of the European Union

Content :

The Nations of ASEAN

Content :

Forms of Competitive Advantage

• Absolute advantage is the ability to produce something more efficiently than any other country can.

• Comparative advantage is the ability to produce some product more efficiently or better than other products.

• National competitive advantage is an international competitive advantage stemming from a combination of factor conditions; demand conditions; related and supporting industries; and firm strategies, structures and rivalries.

Content :

Absolute Advantage: Saudi Oil

Content :

Absolute Advantage: Brazilian Coffee Beans

Content :

Absolute Advantage: Canadian Timber

Content :

Absolute Advantage: Mexico Tequila

Content :

Comparative Advantage: United States Movies

Content :

Bollywood… ???

Content :

Comparative Advantage: United States Computer

Content :

Comparative Advantage: United States Farming

Content :

Comparative Advantage: Guatemalan Textile

Content :

Comparative Advantage: South Korea Electronic

Content :

National Competitive Advantage: French Wine

Content :

National Competitive Advantage: United States Fast Food

Content :

National Competitive Advantage: German High-End Car

Content :

Attributes of National Competitive Advantage

Content :

Import - Export Balances

Balance of trade is the economic value of all products a country imports minus the economic value of all products it exports.

Trade deficit occurs when a country’s imports exceed its exports (a negative balance of trade), while a trade surplusoccurs when exports exceed imports (a positive balance of trade)

Balance of paymentsBalance of payments

is the flow of money into or out of a country.

Content :

Exchange Rates

Exchange rate is the rate at which the currency of one nation can be exchanged for that of another.

1. Fixed exchange rates: the value of any country’s currency relative to that of another remain constant.

2. Floating exchanger rates: the value of one country’s currency relative to that of another varies with market conditions.

3. Euro: a common currency shared among most of the members of the EU

Content :

Exchange Rates and Competition

When a country’s currency rises―becomes stronger―companies based there find it harder to export products to foreign markets and easier for foreign companies to enter local markets.

When the value of currency declines―becomes weaker―companies based there find it easier to export to foreign markets and harder for foreign companies to enter local markets.

Content :

Going International

Content :

Levels of Involvement

1. Exporters : make product in one country to distribute and sell in others.

Importers : buy products in foreign markets and import them for resale at home.

2. International firms : conduct a significant portion of their business abroad.

3. Multinational firms : design, produce and market products in many nations.

Content :

International Organization Structures

• Independent agents are foreign individuals or organizations that represent an exporter in foreign markets.

• Licensing arrangements are arrangements in which firms choose foreign individuals or organizations to manufacture or market their products in another country.

• Branch offices are foreign offices set up by an international or multinational firm

• Strategic alliance (also called Joint Venture) is an arrangement in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner’s country.

• Foreign Direct Investment (FDI) involves buying or establishing tangible assets in another country.

Content :

1. Social and Cultural Differences

Firms planning to conduct business abroad must understand the social and cultural differences between host country and home country.

Differences in:

* Language

* Tastes and preferences

* Sense of value

* Shopping habits

Content :

2. Economic Differences

Economic differences can be pronounced.

• A firm must know how much the government is involved in a given industry operating within a mixed economy.

• The impact of economic differences can be great in planned economies.

Content :

3. Legal and Political Differences

Government can affect international business in many ways. They can :

• Set condition for doing business within their borders and even prohibit doing business together.

• Control the flow of capital and use tax legislation to discourage or encourage activity in a given industry.

• Confiscate the property of foreign-owned companies.

Content :

Quotas, Tariffs, and Subsidies

• Quotas is a restriction on the number of products of a certain type than can be imported into a country.

• Tariff is a tax levied on imported products.

• Subsidy is a government payment to help a domestic business compete with foreign firms.

Content :

What is protectionism ?

Practice of protecting domestic business against foreign competition.Content :

4. Legal and Content Laws

Local content laws require that products sold in a particular country be at least partly made there.

Firms seeking to do business in a country must either investthere directly or take on a domestic partner.

Profits from doing business in a foreign country stay there rather than flowing to another nation.

Content :

5. Business Practice Laws

Business practice laws are laws or regulations governing business practices in given countries.

• Cartels are associations of producers that control supply and prices.

• Dumping is the practice of selling a product abroad for less than the cost of production.

Content :

thank you

Content :

Business w03 Competing in a Global Market @1

Business

Transcript of Business w03 Competing in a Global Market @1

Week 02 Competing In A Global Market

239 DMR O Ring Catalogue C0B W03

COMPETING FOR REFUGEES: A MARKET-BASED SOLUTION … 2/COMPETING FOR REFU… · COMPETING FOR REFUGEES: A MARKET-BASED SOLUTION TO A HUMANITARIAN CRISIS Joseph Blocher & Mitu Gulati*

Competing for LNG in the Global Gas Market

Does Size Matter? Universities competing in a global market › education › imhe › 41057984.pdf · Does Size Matter? Universities competing in a global market University of Iceland,

ADS Harmonic Balance w03

Online publisher; Competing in the digital market of the ...essay.utwente.nl/58328/1/scriptie_R_Vleerbos.pdf · Online publisher; Competing in the digital market of ... My special

Electrobombas Sumergibles Z6-50Hz en W03-07

Competing in a Mature Market: The Case of Super AM Food Markets

W03 evie

a strategic analysis for competing in the canadian consumer wireless telecommunications market

617 w03 lecture_2015

Strategy for Competing in Russia’s Banking Market

9702 w03 ms_all

W03 - Present Progressive (1).pdf

CASE STUDY Competing with the Grey Market: …irep.ntu.ac.uk/id/eprint/32162/1/PubSub9633_Simba.pdf1 CASE STUDY Competing with the Grey Market: Puzey and Payne in Zimbabwe Simba Amon,

February 2020 Safety Recall W03 / NHTSA 20V-043 ...

Relmada Therapeutics, Inc. - Stock Market Media Group · Competing in the Pain Market Relmada Therapeutics is competing in what is the largest prescription drug market in the world.

NT03-1 NT03-2 NT03-3 NT03-4 NT03-5 NT03-6 NT03-7 AC03-1 AC03-2 AC03-3 W03-1 W03-2 W03-3 This timeslice movie is designed as a quick look at the data and.

Competing in the Pakistan's financial market: Islamic Finance’s competitive · 2014-08-19 · Competing in the Pakistan's financial market: Islamic Finance’s competitive advantage.