05+-+Chapter+5+-+International

05+-+Chapter+5+-+International - MGTA03 – Intro to...

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Unformatted text preview: MGTA03 – Intro to Management MGTA03 "Understanding International Business" Principal points International Trade - What It Is International International Trade - Why It Exists International Importance of Trade to Canada. Importance Canada is "Open” Economy Canada Competitive Advantage International Business - Defined International Business activities that involve exchanges Business across national boundaries across Canada is an "Open Economy" Canada: “open” to trade, imports, exports, flow of goods and services across border flow Because: it raises living standards Because: Canada is a Major Player Canada 7th largest exporter, 7th largest importer “G8” Countries: our biggest customers, suppliers Exports to Exports $ billion billion USA 252 Japan 8 UK 4 Germany 2 Imports from $ billion 203 14 6 6 International trade = approx. 30% of Cdn GDP Canada and NAFTA Canada North America Free Trade Agreement Treaty involving: Canada, USA and Mexico Includes c. 450 million people Must have no trade barriers or protection Must no Thus, promotes trade between the three Why do we Import and Export? Why Competitive Advantage No country can make everything everything quickly, cheaply and well quickly, Some countries better equipped than Some other countries to make particular goods or services or Why do we Import and Export? Why It's faster, cheaper, and easier to make It's make some things here here It's faster, cheaper, and easier buy other things from elsewhere elsewhere Some things you can make, and other Some things you can't. things Competitive Advantage Competitive TWO sources of competitive advantage: Absolute Advantage: things we make things and sell, because others CAN’T CAN’T Comparative Advantage: Things we Comparative make and sell, because we can and CHOOSE TO CHOOSE Absolute Advantage Absolute Nation's ability to produce goods and Nation's services more cheaply or better than in any other country. any Comparative Advantage Comparative a nation's ability to make or produce some nation's specific products more cheaply or better than other products . than So, we concentrate on the former, and So, ignore the latter. ignore ...
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