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International Business

International Business. Business Management Administration Mrs. Fanning. Geographic, economic, cultural, and political aspects of international business, along with trade relations, are the focus of this lesson. 3-2 The global marketplace. International Business Environment.

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International Business

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  1. International Business Business Management Administration Mrs. Fanning

  2. Geographic, economic, cultural, and political aspects of international business, along with trade relations, are the focus of this lesson. 3-2 The global marketplace

  3. International Business Environment • Doing business in other countries requires knowledge of the differences that exist among people and places • Businesses must consider 4 main factors: • Geography • Location, climate, terrain, waterways, natural resources • Economics • Technology, education, inflation, exchange rate, infrastructure

  4. International Business Environment • Infrastructure – a nation’s transportation, communication, and utility system • Businesses must consider 4 main factors: • Culture • Language, family, religion, customs, traditions, food • Political-legal factors • Government system, political stability, trade barriers, business regulations

  5. International Business Environment • Examples: • In India, time is fairly fluid so bee prepared for meetings to start and finish late and for interruptions to occur on a regular basis. • In Germany, in formal German business meetings, it is customary for the highest-ranking person to enter the room first. • In China, gift giving is an everyday part of Chinese business culture, giving and receiving gifts helps to cement relationships. Take gifts with you when visiting and put some thought into it.

  6. International Trade Barriers • Government actions can create trade barriers – restrictions to free trade • 3 common trade barriers: • Quota – a limit on the quantity of a product that may be imported or exported within a given period • Tariff – a tax that government place on certain imported products • Embargo – stopping the importing or exporting of a certain product or service

  7. Encouraging International Trade • Specific actions by governments can promote international business activities • Common efforts to encourage international trade include: • free-trade zones- a selected area where products can be imported duty free and then stored, ambled, and used in manufacturing. • Usually around seaports or airport • free-trade agreements -member countries agree to remove duties which are also call import taxes and trade barriers on products traded among them • United States, Canada, and Mexico (NAFTA)- 1994 • common markets- members do away with duties and other trade barriers

  8. International Business Business Management Administration Mrs. Fanning

  9. Methods of organizing international business activities, such as joint ventures and multinational corporations, are the basis for this lesson. 3-3 International business organizations

  10. International Business Organizations • Multinational company (MNC) – an organization that does business in several countries • MNCs usually consist of a parent company in a home country and divisions or separate companies in one or more hose countries

  11. Global Market Entry Modes • As companies expand into other countries, several methods are available for their use (p66-67) • Licensing • Franchising • Joint venture – an agreement between 2 or more companies to share a business project

  12. International Trade Organizations • International business organizations can be very complex • As a result, several organizations have been created to help companies with global trade activities (67-68) • World Trade Organization (WTO) • International Monetary Fund (IMF) • World Bank

  13. After Activity • Internet Search • Find the exchange rate for the U.S. dollar for 3 countries.

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