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NOTES .docx - CHAPTER 1: GLOBALIZATION Global Business...

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CHAPTER 1: GLOBALIZATIONGlobal BusinessGlobal Business is what a company does when they do business all around the world.International BusinessInternational Business is what a company does when they engage in internationaleconomic activities that crosses a border.Multinational Corporation (MNC)Multinational Corporation (MNC) is a company that engages in foreign direct investmentand operates in multiple countries.Foreign Direct Investment (FDI)Foreign Direct Investment (FDI) is an investment in, controlling, and managing valueadded activities in other countries.Emerging EconomiesEmerging Economies are developing countries or emerging markets.Gross Domestic Product (GDP)Gross Domestic Product (GDP) is the sum of value added by resident firms,households, and governments operating in an economy.Purchasing Power Parity (PPP)Purchasing Power Parity (PPP) is the conversion that determines the equivalent amountof goods and services different currencies can purchase.BRIC Countries
BRIC Countries is an acronym for the emerging economies of Brazil, Russia, India, andChina. Sometimes BRICS is used and includes South Africa.TriadTriad are the developed economies of North America, Western Europe, and Japan.Base of the Pyramid (BoP)Base of the Pyramid (BoP) is the vast majority of humanity who make less than $10 aday.Globalizationis the close integration of countries and people of the world. Itis a trend toward greater economic, cultural, political, and technologicalinterdependence among national institutions and economies.Globalization has brought higher economic growth and standards of living, ithas increased technology sharing, and resulted in extensive culturalintegration.Globalization has disadvantages due to undermining of wages in richcountries and the exploitation of workers in poor countries. It gives MNCs toomuch power and creates inequality between nations open to world trade, andthose that are not. We will look at the different views of globalization and theimpacts it has.Globalization is characterized bydenationalization(national boundariesbecoming less relevant) and is different frominternationalization(entitiescooperating across national boundaries).Benefits of GlobalizationGlobalizationof marketsrefers to the convergence in buyer preferences inmarkets around the world.Benefits include:Open AllClose All
Reduced Marketing CostsNew Market OpportunitiesLevelling of Uneven Income StreamsMeeting Local Buyers’ NeedsGlobal SustainabilityGlobalization of productionrefers to the dispersal of production activities tolocations that help a company achieve its cost-minimization or quality-maximization objectives for a good or service. This includes the sourcing ofkey production inputs (such as raw materials or products for assembly) as wellas the international outsourcing of services.

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Term
Winter
Professor
DeepakTuteja

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