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ch04PPP - Chapter 4 Competing in World Markets Learning...

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Competing in World Markets Chapter 4
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Explain the importance of international  business and the primary reasons nations  trade and discuss the concepts of  absolute and comparative advantage in  international trade. Describe how nations measure  international trade and the significance of  exchange rates. Identify the major barriers that confront  global businesses. 1 Learning Goals 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. 2 3 4 5 6
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oosts economic growth xpands markets ore efficient production systems ess reliance on the economies of home nations xports : Domestically produced goods and services sold in  markets in other countries. Why Nations Trade
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Decisions to operate abroad depend upon  availability, price, and quality of: Labor Natural resources Capital Entrepreneurship Companies doing business overseas must make  strategic decisions. International Sources of Factors of  Production
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New social and cultural factors Economic and political environments Legal restrictions Companies can expand their markets, seek growth  opportunities in other nations, make their production  and distribution systems more efficient, and reduce  their dependence on the economies of their home  nations. Additional Environmental Factors to  which Companies are Exposed
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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% Current GDP data Size of the International Marketplace
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Population Size and Prosperity Though developing nations generally have lower per capita   income, many  have strong GDP growth rates and their huge populations can be  lucrative markets.
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Top 10 Trading Partners with U.S.
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Absolute advantage : Country can maintain a  monopoly or produce at a lower cost than any  competitor.
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