ADM2320X summer 2008-ch.7

ADM2320X summer 2008-ch.7 - Reaching Global Markets Chapter...

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1 Reaching Global Markets Chapter Seven
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2 World Trade Flows In 2005, world trade was $11.5 trillion (3/4 in goods) and 1/4 in services; Trade between US, EU, China, Japan & Canada accounts for 3/4 of all trade; Countertrade (barter) accounts for 15% to 20% of all trade (payment is settled by receiving payment in goods and/or services, because domestic currency is not convertible to foreign exchange)
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3 Definitions Trade feedback effect As a country exports more, its output and income rise, thereby enabling it to import more Gross domestic product (GDP) Monetary value of all goods and services produced in a country during a year Exports account for 45% of Canada’s GDP Balance of trade Monetary value between a country’s exports and imports
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4 Competitive Advantage of Nations 4 elements of Porter’s diamond: Factor conditions natural resources, education and skill levels; wage rates Demand conditions Size of market; sophistication of consumers; media exposure of products (drive quality) Existence of supplier clusters (accelerate innovation) Number of companies in an industry; intensity of competition; public or private ownership (competition)
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5 Conclusions of Porter’s model Intense domestic competition drives continuous improvement, innovation, and change that supports a firm’s competitive advantage in global marketplace International success doesn’t depend on size (e.g.) Niche market Innovative products Proprietary intellectual property Unique market positioning
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6 Trends in global marketing Gradual decline of economic protectionism Formal economic integration and free trade among nations Global competition among global companies for global customers Development of networked global marketspace
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7 Protectionism Use of tariffs and non-tariff barriers (i.e. quotas) to protect domestic producers from imports Protects local jobs Promotes economic independence & national security Promotes development of domestic industries
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This note was uploaded on 12/08/2009 for the course TEFLER ADM1300 taught by Professor Koppel during the Fall '09 term at University of Ottawa.

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ADM2320X summer 2008-ch.7 - Reaching Global Markets Chapter...

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