Scribd
Upload
17 views

Lecture 4

This chapter discusses competing in world markets. It explains why nations trade, how trade is measured between nations, and identifies barriers to international trade such as social/cultural differences, economic differences, and political/legal differences. It also discusses reducing trade barriers through organizations like the WTO and GATT, and decisions for going global through options like importing/exporting or developing a global business strategy.

Uploaded by

Tanveer Ahmad
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
17 views

Lecture 4

This chapter discusses competing in world markets. It explains why nations trade, how trade is measured between nations, and identifies barriers to international trade such as social/cultural differences, economic differences, and political/legal differences. It also discusses reducing trade barriers through organizations like the WTO and GATT, and decisions for going global through options like importing/exporting or developing a global business strategy.

Uploaded by

Tanveer Ahmad
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 9

Introduction to Business

CHAPTER 4

COMPETING IN WORLD MARKETS


Introduction to Business

CHAPTER OUTLINE:

1. EXPLAIN WHY NATIONS TRADE.

2. DESCRIBE HOW TRADE IS MEASURED BETWEEN NATIONS.

3. IDENTIFY THE BARRIERS TO INTERNATIONAL TRADE.

4. DISCUSS REDUCING BARRIERS TO INTERNATIONAL TRADE.

5. EXPLAIN THE DECISIONS TO GO GLOBAL.

6. DISCUSS DEVELOPING A STRATEGY FOR INTERNATIONAL BUSINESS.


Introduction to Business

WHY NATIONS TRADE

EXPORTS: DOMESTICALLY PRODUCED GOODS AND SERVICES SOLD IN OTHER


COUNTRIES.

IMPORTS : FOREIGN-MADE PRODUCTS PURCHASED BY DOMESTIC CONSUMERS


FACTORS:
INTERNATIONAL SOURCES OF FACTORS OF PRODUCTION

SIZE OF THE INTERNATIONAL MARKETPLACE

ABSOLUTE AND COMPARATIVE ADVANTAGE


 Introduction to Business

MEASURING TRADE BETWEEN NATIONS

Balance of trade difference between a nation’s exports and imports.

Balance of payments overall flow of money into or out of a country.

Major U.S. Exports and Imports

Major Pakistan Exports and Imports

Exchange rate : the rate at which a nation’s currency can be exchanged for the currencies of
other nations.

Devaluation : drop in a currency’s value relative to other currencies or to a fixed standard.


 Introduction to Business

Barriers to International Trade

Social and Cultural Differences


Language
Values and Religious Attitudes

Economic Differences
Infrastructure: Basic systems of communication, transportation, and energy
facilities in a country.
Currency Conversion and Shifts

Political and Legal Differences


Political Climate
Legal Environment
International Regulations
 Introduction to Business

Types of Trade Restrictions

Tariffs taxes, surcharges, or duties on foreign products.

Quota limit : set on the amounts of particular products that


countries can import during specified time periods.

Dumping selling : products abroad at prices below production


costs or below typical prices in the home market to capture
market share from domestic competitors.
 Introduction to Business

Reducing Barriers to International Trade


Organizations Promoting International Trade

General Agreement on Tariffs and Trade (GATT ) international trade accord that
substantially reduced worldwide tariffs and other trade barriers.

World Trade Organization (WTO) 164-member: International institution that monitors


GATT agreements and mediates international trade disputes.

World Bank organization established by industrialized nations to lend money to less


developed countries.

International Monetary Fund (IMF) organization created to: promote trade, eliminate
barriers, and make short-term loans to member nations that are unable to meet their budgets
 Introduction to Business

Going Global

 Importers and Exporters


 Countertrade
 Contractual Agreements
 Franchising
 Subcontracting
 Foreign Licensing
 Offshoring

Developing a Strategy for International Business


 Global Business Strategies
 Multidomestic Business Strategies
 Introduction to Business

Discussion
Leaving topics, CPI, PPI, Employment, Global Economics

You might also like