CHAPTER 4 - Power Point Slides

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Unformatted text preview: > > > > > > > > Competing in Global Markets Chapter 4 Explain international business and why nations trade. Discuss types of advantage in international trade. Describe measurements of international trade and exchange rates. Identify the major barriers that confront global businesses. Explain how international trade organizations and economic communities reduce barriers to international trade. Compare the different levels of involvement used by businesses when entering global markets. Distinguish between a global business strategy and a multidomestic business strategy. 1 2 3 4 5 6 7 L e a r n i n g G o a l s W h y N a t i o n s T r a d e Boosts economic growth Expands markets More efficient production systems Less reliance on economies of home nations Exports : Domestically produced goods and services sold in markets in other countries. Imports : Foreign-made products and services purchased by domestic consumers. Decisions to operate abroad depend upon availability, price, and quality of: Labor Natural resources Capital Entrepreneurship Companies can spread risk throughout nations In te r n a tio n a l S o u r c e s o f F a c to r s o f P r o d u c tio n S iz e o f th e In te r n a tio n a l M a r k e tp la c e As developing nations expand into the global marketplace, opportunities grow Many developing countries have posted high growth rates of annual GDP United States 4.4% China 11.1% India 9.4% Though developing nations generally have lower per capita income, many have strong GDP growth rates and their huge populations can be lucrative markets. P o p u la tio n S iz e a n d P r o s p e r ity T o p T e n T r a d in g P a r tn e r s W ith th e U n ite d S ta te s Absolute advantage : Country can maintain a monopoly or produce at a lower cost than any competitor. Example: Chinas domination of silk production for centuries. Comparative advantage : Country can supply a product more efficiently and at lower cost than it can supply other goods, compared with other countries. Example: Indias combination of a highly educated workforce and low wage scale....
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