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Nickels McHugh McHugh

Nickels Cover. Nickels McHugh McHugh. 3. Chapter. Competing in Global Markets. 3- 2. Growing World Population. In Billions. Source: Population Reference Bureau. Company % of Earnings From Outside U.S. Source: Investment Advisor , August 2000.

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Nickels McHugh McHugh

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  1. Nickels Cover Nickels McHugh McHugh

  2. 3 Chapter Competing in Global Markets 3-2

  3. Growing World Population In Billions Source: Population Reference Bureau

  4. Company % ofEarnings From Outside U.S. Source: Investment Advisor, August 2000

  5. Leading Goods Exporters/Importers (2001) CountryExportsImports United States 731 1,180 Germany 571 493 Japan 404 350 France 322 326 United Kingdom 273 332 World Total 6,155 6,441 In Billion $ Source: World Trade Organization

  6. Leading Services Exporters/Importers (2001) In Billion $ CountryExportsImports United States 263 188 Germany 80 133 Japan 64 107 France 80 62 United Kingdom 108 92 World Total 1,460 1,445 Source: World Trade Organization

  7. Why Trade With Other Nations? • No nation can produce all its needs • Mutually beneficial exchange • Natural Resources or Technology- Produce or Buy?

  8. U.S. Trading Partners RegionExportsImports Asia 26.5% 36.3% West. Europe 24.0 20.8 North America 22.5 18.7 Latin America 21.8 17.3 Middle East 2.7 3.3 Africa 1.7 2.3 C./E. Europe/ Baltic States/CIS 0.9 1.3 Total 100% 100% Source: World Trade Organization, 2001

  9. Theories of Advantage Comparative U. S. China China U. S. Output per Unit of Input Software Clothing

  10. Global Competitiveness

  11. Theories of Advantage Absolute = Virtual Monopoly South Africa Output per Unit of Input The Rest of the World Diamond Production

  12. Global Trade • Goods & Services • Importing • Exporting • Measuring Trade • Balance of Trade/Payments • Trade Deficit

  13. McDonald’s International Menu • Philippines McSpaghetti • Germany McBeer • Switzerland Vegi Mac • Malaysia Sugar Cane Juice • Netherlands Cappuccino Donuts • Greece Shrimp, Veggie Burgers, & Spring Rolls (sold during Lent)

  14. Daily Coffee Consumption per Capita Source: Business 2.0. July 2002.

  15. Starbucks Around the World World Locations International Locations Source: Business 2.0, July 2002.

  16. U. S. Trade inGoods & Services ($ Billions) Balance of Trade Source: St. Louis Business Monthly, Oct. 1999 & World Trade Organization

  17. Sources of U.S. Oil Imports In Millions of Barrels Source: USA Today

  18. U.S. Trade Experience • Balance of Payments • Debtor Nation • Foreign Direct Investment • Dumping

  19. Sources of Foreign Direct Investments In the U.S. Source: U.S. Commerce Dept.

  20. Licensing Exporting Franchising Contract Manufacturing Joint Ventures Strategic Alliances Subsidiaries-MNCs Foreign Direct Investment Strategies forReaching Global Markets

  21. World’s LargestMNCs- 2002 Revenue ($Billions) • Wal-Mart Stores  217 • Exxon Mobil  213 • General Motors  175 • BP  174 • Ford Motor  162 • Daimler Chrysler  136 • Royal Dutch/Shell Group  135 • General Electric  125 • Toyota Motor  121 • Mitsubishi 112

  22. Forces Affecting Tradingin Global Markets • Socio-cultural • Economic & Financial • Legal & Regulatory • Physical & Environmental • Trade Protectionism • Global E-Commerce-Future

  23. Days of Annual Vacation Source: AAA World

  24. Language Religion Values & Attitudes Cultural Differencesin Global Markets • Aesthetics • Materialism

  25. Did You Know? • In Turkey it’s rude to cross your arms while you are facing someone. • In the Arab world the left hand is considered unclean; don’t eat with it! • In India never pat someone’s head, it’s the seat of the soul. • The Chinese associate gifts such as straw sandals, clocks and handkerchiefs with funerals.

  26. What’s the 2nd Most ValuableGlobal Business Language? Source: Accountemps Poll

  27. Britain - Tomato Japan - Corn South America - Cream of Asparagus Australia- Cream of Pumpkin Favorite CampbellSoups Around the World • Hong Kong - Watercress & Duck Gizzard • United States - Chicken Noodle, Cream of Mushroom

  28. Nations That Have NotConverted to the Metric System United States Brunei Yemen Liberia Myanmar (Burma)

  29. Economic & Financial Forces • No Worldwide Currency • Currency Fluctuations • Floating Exchange Rates • Bartering/Countertrading

  30. Developing CountriesNeed Infrastructure • 1.2 billion people lack clean drinking water • 3 billion people lack adequate sanitation • 2 billion people lack electricity

  31. Legal &Regulatory Forces • Inconsistent Laws & Regulations • Foreign Corrupt Practices Act of 1978 • Local Business Contact Required

  32. Protectionism • Mercantilism • Tariffs • Protective • Revenue • Import Quota • Embargo • Nontariff Barriers-Keiretsu

  33. Trade Agreements • General Agreement on Tariffs & Trade (1948) • Uruguay Round of GATT (1986) • Lower Tariffs • Extend Rules • World Trade Organization (1995) • Common Markets • European Union (EU) • Mercosur • North American Free Trade Agreement (1994)

  34. Future Global Trade • People’s Republic of China- Permanent Normal Trade Relations/Rights • Russia & Others • Internet • Technology- Obstacles/Problems

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