ch04PPP - Competing in World Markets Chapter 4 Explain the...

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Unformatted text preview: Competing in World Markets Chapter 4 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 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 ■ 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 ■ 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 ■ 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 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. Top 10 Trading Partners with U.S. ■ Absolute advantage : Country can maintain a monopoly or produce at a lower cost than any competitor....
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This note was uploaded on 02/13/2012 for the course ART HISTOR 105 taught by Professor Kenfield during the Spring '11 term at Rutgers.

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ch04PPP - Competing in World Markets Chapter 4 Explain the...

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