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International Business. Wendy Jeffus Harvard Summer School. Introduction. Introductions Dr. Wendy Jeffus Brian Levin “Beyond the Textbook: What is this class about?” Class: World Perspective Course Websites: Textbook: www.mhhe.com/hill Harvard:http://courses.fas.harvard.edu/sum/32268
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International Business Wendy Jeffus Harvard Summer School
Introduction • Introductions • Dr. Wendy Jeffus • Brian Levin • “Beyond the Textbook: What is this class about?” • Class: World Perspective • Course Websites: • Textbook: www.mhhe.com/hill • Harvard:http://courses.fas.harvard.edu/sum/32268 • Beyond the Course: www.wendyjeffus.com • Syllabus • Textbook: International Business by Charles Hill - 7th *http://isites.harvard.edu/k62285
Info Sheet & Syllabus • Handout: Student Info Sheet • Handout: Syllabus • Friday Optional Sessions (exam review, presentation prep, & report feedback) • Group Projects • Exams • Expectations • Mid-term & Final Exams (Mandatory Attendance) • Group Projects • Beyond the Classroom
No Excuses http://www.youtube.com/watch?v=obdd31Q9PqA
Group Projects • Group Assignments • Case Studies • Prepare a 10 min PowerPoint presentation • 1) Summarize the case • 2) Relate the case to the chapter • 3) Update the case with current events • Final Report • 10 min. 10 pages. • First Assignment (up to 5 points towards final case grade) • 1 slide – 2 minutes (timed) – 3 copies
Course Webpage • http://courses.fas.harvard.edu/sum/32268 • Syllabus • Info Sheet • Group Assignments • Class Slides • All slides will be posted after the lecture • Read the assigned chapters before class and you’ll be able to keep up. • (We don’t want you to know the “punch line”)
Dan Levin • International Entrepreneurship
Wendy Jeffus Harvard Summer School Chapter 1: Globalization
The World Is Changing… My first cell phone… My first video game… My first internet connection… Email – Online Shopping – Social Networking 1984 1983 1994 Atari (discontinued in ’92) Source: http://motoinfo.motorola.com/motoinfo/20th_anniversary/docs/timeline.pdf Wikipedia.org
The Globe is Shrinking… 1500-1840 1850-1930 1950s 1960s Steam locomotives ~ 65mph Steamships ~ 36mph Propeller aircraft ~300-400mph Jet aircraft ~500-700mph Best average speed of horse-drawn coaches & sailing ships - 10mph Photo source: http://www.masternewmedia.org/images/wealth_network.jpg
Telepresence version 1.0 Telepresence Magic http://youtube.com/watch?v=rcfNC_x0VvE
Small Businesses Reach Global Customers Parker’s Maple Barn Note: the population of Mason, NH was 1,147 at the 2000 census. Source: www.parkersmaplebarn.com
“Yesterday” “Tomorrow” Consumers are Changing… Companies are Reacting to Change http://www.fritolay.com/ Sources: www.fueleconomy.gov, http://coolproductexpo.stanford.edu/NewCarver_Gen3.jpg, http://www.cepro.com/images/uploads/enviro_friendly.jpg
Global Rivalries • Automobiles, airplanes, earthmoving equipment, & video games. Toyota (Japan) Airbus (France) Boeing (U.S.) Ford (U.S.) Caterpillar (U.S.) Komatsu (Japan) Sony (Japan) Microsoft (U.S.) Nintendo (Japan) Photo sources: company websites and wikipedia
What is “Globalization”? • Globalization is the shift toward a more integrated and interdependent economy • Two components: • The globalization of markets • “National markets” become “global markets” • The globalization of production • Global sourcing McDonalds: >100 countries Starbucks: 49 countries Citigroup: 98 countries Source: Company websites and annual reports
Globalization of Production Designed in Germany… Assembled in Mexico… …with parts made in the U.S. and Japan …delivered via a Danish ship. …which come from Korean steel and Malaysian rubber. …owned by a French company …which came from a well off of the coast of Benin... The gas was bought at a BP service station…
Globalization of Production Japan: Fuselage, Wings, etc. Italy: Wing Flaps Boeing: 777 Singapore: Doors & Landing Gear
Macroeconomic Trends • Reduction of barriers to trade • WTO (Chapters 6-9) IMF/World Bank (Chapter 11) • Changes in communication, information, & transportation technologies. • What was the average cost of a 3 minute phone call from NY to London in 1930? • $244.65 • Approximately how many people used the Internet in 1990? • Less than 1 million See also: http://www.corp.att.com/history/milestones.html, http://www.internetworldstats.com/stats.htm
Telecommunications is creating a global audience. Transportation is creating a global village… from Buenos Aires to Boston, from Birmingham to Beijing, people watch MTV, wear blue jeans, and listen to iPods... Paraphrased from International Business 7th edition by Hill, p. 14
Global Managerial Issues • Countries are different • Culture • Economic Development • Politics • Economic Systems • Legal Systems • Differences creates wider range of problems that are more complex • Government limits and intervention on trade and investment • Currency conversion issues
Who is Stanley Ho? “The King of Gambling” A Hong Kong tycoon who continues to dominate the Macau market with 17 casinos. Forbes 701st richest person in 2009. Sources: The World's Billionaires", Forbes, 8 March 2007. “Macau” Wikipedia, “Betting on growth,” Economist, Jan 25th 2007.
Who is Sheldon Adelson? Forbes 178th richest person in 2009 (used to be world’s 6th richest). The Chairman and CEO of Las Vegas Sands (NYSE: LVS) The Venetian in Macau has 870 tables and 3,400 slot machines in the world's largest gambling hall. Political Risk: The Chinese authorities slowed down visas issued from southern China. Sources: www.venetianmacao.com, “Macau wow,” Economist, Aug 30th 2007.
Global Billionaires 3. Carlos Slim (Mexico) 4. Ingvar Kamprad (Sweden) 5. Karl/Theo Albrecht (Germany) 6. Mukesh Ambani (India) 7. Lakshmi Mittal (India) 8. Amancio Ortega (Spain) 9. Bernard Arnault (France) 10. Li Ka-shing (Hong Kong, China) Carlos Slim Helú IngvarKamprad LakshmiMittal BernardArnault AmancioOrtegaGaona Karl/Theo Albrecht Mukesh Ambani Li Ka-shing
Billion$ Business Ideas… Italy ($10 billion)Idea: Make chocolate a part of the morning meal by selling a chocolate hazelnut spread that is delicious with breakfast toast. U.S. ($5.3 billion)Idea: Put up a bunch of lockers off a highway somewhere. Sell to the masses. U.S. ($5 billion)Idea: Take a polo shirt. Add a little horse decal. Price at $50. Watch it sell like crazy. U.S. ($4.4 billion)Idea: Sell books over the Internet--saving customers the enormous hassle of going to a bookstore. Germany ($1.5 billion x 2)Idea: Sweet, chewy candies in all sorts of shapes. Source: Forbes, “Why didn’t I think of that?” March 08, 2007.
Billion$ Business Ideas… • U.S. ($4.5 billion)Idea: Create stuffed bean bags shaped like cute animals with precious names. Put out a limited amount, so collectible value skyrockets. • Thailand and Austria ($3.1 billion, $3 billion)Idea: Concoct a super-caffeinated carbonated beverage heavy on the B vitamins. Market to athletes and the party crowd. • Italy ($3 billion)Idea: Make shoes with tiny holes in the sole that release sweat--thereby eliminating stinky feet. • U.K. ($1.6 billion)Idea: Invent upright device that sucks dirt off the floor. • U.S. ($1.1 billion)Idea: Put a coffee shop on every corner of America. Source: Forbes, “Why didn’t I think of that?” March 08, 2007.
Is Globalization A Good Thing? • The Great Globalization Debate (July 20th) • Bring Your Cameras!
Who Thought of THAT? • Beer for Dogs? http://www.youtube.com/watch?v=gKdWfhJityQ Source: http://www.beerfordogs.com/
Other Interesting Ideas… • “20 Most Important Inventions for the Next 10 Years” • http://images.businessweek.com/ss/09/02/0225_inventions/1.htm • Sustainable Dance Floor • www.sustainabledanceclub.com/index.php?t=project • Innovative Companies
Final Projects • What interests you? • Where would you like to work? • Where would you like to travel? • Where would you like to invest? www.medical-tourism-colombia.com, wikipedia.org http://www.cbc.ca/news/background/healthcare/medicaltourism.html
First Group Assignment • Due next class. • What country do you plan to enter? • What product do you plan to offer? • This should be brief – imagine it is an “Elevator Speech” • 1 slide – 2 minutes (timed) – 3 copies • Suggestions • Have backup projects and countries in mind. • Be willing to change!