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Chapter Three

Chapter Three. Exploring Global Business. 3 | 1. Learning Objectives. Explain the economic basis for international business Discuss the restrictions nations place on international trade, the objectives of these restrictions, and their results

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Chapter Three

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  1. Chapter Three Exploring Global Business 3 | 1

  2. Learning Objectives • Explain the economic basis for international business • Discuss the restrictions nations place on international trade, the objectives of these restrictions, and their results • Outline the extent of international trade and identify the organizations working to foster it • Define the methods by which a firm can organize for and enter into international markets • Describe the various sources of export assistance • Identify the institutions that help firms and nations finance international business 3 | 2

  3. The Basis for International Business • Define • International Business • Absolute Advantage • Comparative Advantage • Why are some countries better equipped than others to produce particular goods or services? • How does specialization help improve efficiency? What does this have to do with comparative advantage? 3 | 3

  4. The Basis for International Business (cont’d) • Why do countries trade? • Define • Exporting • Importing • Balance of Trade • Trade Deficit • Balance of Payments 3 | 4

  5. International Business • What are the reasons for restricting international trade? • Why are more restrictions placed on imports than on exports? • What are the common arguments for and against international trade? • What is a Favorable Balance of Trade? 3 | 5

  6. Types of Trade Restrictions • Define • Import Duty (Tariff) • Dumping • Nontariff Barriers • Import Quota • Embargo • Foreign Exchange Control • Currency Devaluation • Bureaucratic Red Tape • Cultural Attitudes 3 | 6

  7. The Extent of International Business • How do recessions affect international business? • Why is globalization the new reality for business? • How does globalization create new job opportunities and greater choice for consumers? • How has the Internet increased the spread of globalization? 3 | 7

  8. The World Economic Outlook for Trade • Be able to discuss the global economic outlook for international trade • Canada and Western Europe • Mexico and Latin America • Japan • Other Asian Countries • Emerging Europe • Commonwealth of Independent States • The United States • What are the differences in economic performance between developed and developing nations? 3 | 8

  9. International Trade Agreements • Be able to define and discuss the major international trade agreements • General Agreement of Tariffs and Trade (GATT) • World Trade Organization (WTO) • European Union (EU) • North American Free Trade Agreement (NAFTA) • Central American Free Trade Agreement – Dominican Republic(CAFTA-DR) • Association of Southeast Asian Nations (ASEAN) • What is an Economic Community? 3 | 9

  10. International Economic Organizations Working to Foster Trade • Be able to list and discuss the major economic organizations • European Economic Area (EEA) • Commonwealth of Independent States (CIS) • Caribbean Basin Initiative (CBI) • Common Market of the Southern Cone (MERCOSUR) • Organization of Petroleum Exporting Countries (OPEC) • Organization for Economic Cooperation and Development (OECD) 3 | 10

  11. Methods of Entering International Business • Define and discuss the advantages and disadvantages of • Licensing • Exporting • What are a Letterof Credit, aBillofLading, and a Draft? • Joint Venture • Totally Owned Facility • What are the two forms? • Strategic Alliances • Trading Companies • Countertrade • Multinational Enterprise 3 | 11

  12. Largest Foreign and U.S. Multinational Corporations • Be able to list some of the largest multinational corporations • In the United States • Globally • How large are these organizations? • How do they compare to national GDPs? 3 | 12

  13. Steps in Entering International Markets • What are the steps required to enter international markets? • Hint: There are nine steps • What are the marketing tasks associated with each step? 3 | 13

  14. Sources of Export Assistance • What are some sources of export assistance? • National Export Strategy (NES) • Trade Promotion Coordinating Committee (TPCC) • How do these organizations provide assistance? 3 | 14

  15. Financing International Business • How do organizations find financing for international operations? • What are some of the principal organizations that exist to assist businesses in obtaining necessary financing? • The Export-Import Bank of the United States (Eximbank) • Multilateral Development Banks (MDB) • The International Monetary Fund (IMF) 3 | 15

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