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International Trade and The Global Marketplace

This article provides an overview of key concepts in international trade, including imports, exports, licensing, tariffs, embargoes, protectionism, and the role of organizations like the World Trade Organization. It also discusses the importance of comparative advantage, infrastructure, and global marketing strategies for businesses operating in the global marketplace.

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International Trade and The Global Marketplace

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  1. International TradeandThe Global Marketplace

  2. International Trade • Exchange of Good and Services between nations

  3. IMPORTS… • Goods & Services PURCHASED from other countries EXPORTS… • Goods & Services SOLD to other countries

  4. Licensing • Letting another company use a trademark, patent, special formula, or company name for a fee. • Disney Toys at Walmart • Spiderman Happy Meal Toys

  5. Multinationals • Large Corporations that operate in several countries • GE • Microsoft • Intel • McDonalds • More and more are adding subsidiaries

  6. Tariff – TAX that is imposed on imports. • Quota – QUANTITY limits on imported goods

  7. EMBARGO • Total BAN of specific goods coming into and leaving a country • Health: Poisoned fruit, pesticide problems • Political: End war through economic means • Cuba (over 50 year US embargo) • Vietnam (lifted in the ’80’s) • Persian Gulf / Iraq

  8. Protectionism • Government restricts import to protect domestic industries • The opposite of free trade American raised Blank Angus Beef Hand massaged Kobe Beef from Japan

  9. World Trade Organization • Global coalition of 135 governments that make rules about trade. • GATT (General Agreement on Tariffs & Trade • Before WTO……..No real enforcement of agreements, so WTO was formed to settle disagreements

  10. Comparative Advantage • The value a nation gains by selling goods that it produces most efficiently. • Countries specializing • USA – High Tech (computers, machinery), Steel • Japan/Korea/China – Toys, Clothing, Shoes (cheaper labor)

  11. Infrastructure • The basic physical and organizational structures and facilities (e.g., buildings, roads, and power supplies) needed for the operation of business and industry.

  12. Absolute Advantage • When a country has special natural resources or talents that allow them to produce an item at the LOWEST possible cost (No one else can compare). • CHINA……..Silk • MALAYSIA……..Rubber • BRAZIL………Coffee

  13. Global Marketing Strategies • Customization • Creating entirely new products and promotions for a specific country or region • Globalization • Same package and promotions used all around the world

  14. Global Marketing Strategies • Product Adaptation • Keeps company name but changes products to meet local tastes • Promotion Adaptation • Changing some or part of message and images used in other countries

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