The Global Economic Environment

1. The Global Economic Environment PRIBANUS WANTARA

2. Introduction to Chapter • Market definition – People or organizations with needs and wants; both have the willingness and ability to buy or sell • The global economic environment plays a large role in the development of new markets for organizations

3. What is the most fundamental change in the world economy since WW-II? • The world economy has changed dramatically since World War II. Perhaps the most fundamental change is the emergence of global markets; responding to new opportunities, global competitors have displaced or absorbed local ones.

4. In what areas of the world is global integration most striking? • Integration is particularly striking in the two regions of the European Union (EU) and the North American Free Trade Area (NAFTA).

5. The World Economy – An Overview • The new realities: • Capital movements have replaced trade as the driving force of the world economy • Production has become uncoupled from employment • The world economy, not individual countries, is the dominating factor

6. The World Economy – An Overview The new realities continued: • Perjuangan 75 tahun antara kapitalisme dan sosialisme telah hampir berakhir • E-Commerce mengurangi hambatan negara dan kekuatan perusahaan untuk mengevaluasi kembali model bisnis

7. STAGES OF ECONOMIC DEVELOPMENT At any point in time, individual country markets are at different stages of economic development. • The World Bank has developed a four-category classification system that uses per capita gross national income (GNI) as a base. Although the income definition for each of the stages is arbitrary, countries within a given category generally have a number of characteristics in common.

8. What are the BRIC countries? Today, global attention is focused on opportunities in Brazil, Russia, India and China (collectively known as BRIC). For each of the stages of economic development, special attention is given to the BRIC countries.

9. Economic Systems • 4 main types of economic systems • Market Capitalism • Centrally planned socialism • Centrally planned capitalism • Market socialism

10. Economic SystemsKlasifikasi ini didasarkan pada metode dominanasi alokasi sumber daya (pasar vs perintah) dan bentuk dominanasi kepemilikan sumberdaya (swasta vs Negara) Resource Allocation Market Command Centrally Planned Capitalism Private Resource Ownership State Market Capitalism Centrally Planned Socialism Market Socialism

11. Economic Systems - 1 Market Capitalism Kapitalismepasaradalahsistemekonomidimanaindividudanperusahaanmengalokasikansumberdaya, dimanasumberdayaproduksiadalahmilikswasta. Konsumenmemutuskanbarangapa yang merekainginkan, danperusahaanmemutuskanberapabanyakuntukmemproduksi, perannegaraadalahuntukmempromosikankompetisi

12. Economic Systems - 2 Centrally planned socialism, sistem ekonomi ini memberikankekuasaannegara yang luasuntukmelayanimasyarakat.

13. Economic Systems - 3 • Centrally planned capitalism, adalahsistemekonomidimanaalokasisumberdayaperintahdigunakansecaraluasdalamlingkungankepemilikansumberdayaswasta (misalnya, Swedia).

14. Economic Systems – 3a Centrally planned capitalism adalahsistemekonomidimanaalokasisumberdayaperintahdigunakansecaraluasdalamlingkungankepemilikansumberdayaswasta (misalnya, Swedia). PemerintahSwedia melakukanrencanaprivatisasidenganmenjualsaham daribeberapaperusahaanpemerintah. Examples of Government Resource Ownership in Sweeden * Sold in 2008

15. Market socialism-4 perekonomian yang memberikankebebasan yang cukupbesarkepadasetiaporanguntukmelaksanakankegiatanekonomi, tetapidengancampurtanganpemerintah. Pemerintahmasukkedalamperekonomianuntukmengaturtatakehidupanperekonomiannegara serta jenis – jenisperekonomian yang menguasaihajathiduporangbanyakdikuasaiolehnegara.

16. Reformasi pasar dan kapitalisme baru lahir di berbagai belahan dunia dengan menciptakan peluang untuk investasi dalam skala besar oleh perusahaan-perusahaan global. Sebagai contoh, Coca - Cola kembali ke India pada tahun 1994, setelah dua dekade dipaksa keluar oleh pemerintah. Sebuah undang-undang baru yang memungkinkan kepemilikan saham asing 100 persen perusahaan membantu dalam membuka jalan.

17. Economic Freedom The Heritage Foundation, sebuah think tank konservatif, mengklasifikasikanekonomisesuaidenganderajatkebebasanekonomi. • Rankings of economic freedom among countries • Ranges from “free” to “repressed” • Variables considered include such things as: • Trade policy • Taxation policy • Banking policy • Wage and price controls • Property rights

18. Free Hong Kong Singapore Ireland New Zealand United States United Kingdom Netherlands Australia Switzerland Repressed Bosnia Vietnam Laos Iran Cuba Iraq Libya North Korea Congo Economic Freedom

19. Stages of Market Development • World Bank has defined four categories of development • High-income countries • Upper-middle income countries • Lower-middle income countries • Low-income countries • Based upon Gross National Income (GNI)

20. a. Upper income countries-1 Ciri-2: negara maju, industri, pasca-industri • Negara dengan pendapatan tinggi berasal dari hasil proses pertumbuhan ekonomi berkesinambungan • Kesempatan pasar sangat tergantung pada produk baru dan inovasi • Sumber inovasi berasal dari kodifikasi pengetahuan teoritis dan bukan dari penemuan secara “random” • Semakin dominannya peranan sektor jasa (lebih dari 50% dari GNP)

21. Semakin pentingnya pemrosesan dan pertukaran informasi • Pengaruh pengetahuan lebih besar daripada modal sebagai sumberdaya strategik • Berorientasi ke masa depan

22. b. Upper-middle income countries Ciri-2: • Prosentase penduduk yg bekerja di sektor pertanian menurun tajam pindah ke sektor industri • Meskipun upah meningkat tapi masih lebih rendah dibanding di negara maju • Tingkat melek huruf dan tingkat pendidikan relatif tinggi • Tingkat pertumbuhan ekonomi mengalami peningkatan seiring meningkatnya ekspor

23. c. Lower-middle income countries Ciri-2: • Awal industrialisasi • Mulai banyak didirikan pabrik untuk memenuhi kebutuhan pasar DN • Lokasi strategis bagi produk-2 yang telah distandarisasi

24. d. Low income countries Ciri-2: • Industrialisasi terbatas shg penduduk bekerja pada sektor pertanian • Tingkat kelahiran tinggi • Tingkat melek huruf rendah • Tingkat ketergantungan pd bantuan LN tinggi • Masih banyak gejolak • Terkonsentrasi di kawasan Afrika

25. Stages of Market DevelopmentBank Dunia telah mengembangkan sistem klasifikasi empat kategori yang menggunakan pendapatan nasional bruto (GNI) per kapita sebagai basis.

26. Big Emerging Markets • China • India • Indonesia • South Korea • Brazil • Mexico • Argentina • South Africa • Poland • Turkey

27. Influencing the World Economy • Group of Seven (G-7) • Organization for Economic Cooperation and Development (OECD) • The Triad

28. Group of Seven (G-7) • Leaders from these high income countries work to establish prosperity and ensure monetary stability • United States • Japan • Germany • France • Britain • Canada • Italy Return

29. Group of Eight (G-8) • Starting in the mid-1990s, Russia began attending the G-7 summit meetings. In 1998, Russia became a full participant, giving rise to the new Group of Eight (G-8). Return

30. Organization for Economic Cooperation and Development (OECD) • 30 nations each with market-allocation economic systems • Mission: to enable its members to achieve the highest sustainable economic growth and improve the economic and social well-being of their populations (untuk memungkinkan anggotanya untuk mencapai pertumbuhan ekonomi yang berkelanjutan dan meningkatkan ekonomi serta kesejahteraan sosial) Return

31. The Triad • Dominant economic centers of the world • Japan • Western Europe • United States • Expanded Triad • Pacific Region • North America • European Union Return

32. Marketing Implications of the Stages of Development • The stages of economic development can serve as a guide to marketers in evaluating product saturation levels, the percentage of potential buyers or households who own a product. •  In countries with low per capita income, product saturation levels are low (e.g., ownership of telephones in India is only about 20 percent of the population). •  In China, saturation levels of private motor vehicles and personal computers are very low – only about one car or light truck for every 43,000 people, and one PC for every 6,000. Compare this to the EU, with a ratio of 34 PCs per 100 people. Return