1 Can YOU define it? INTERNATIONAL BUSINESS UNIT 1 Past to Present: Global Business.

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1 Can YOU define it? INTERNATIONAL BUSINESS UNIT 1 Past to Present: Global Business

Transcript of 1 Can YOU define it? INTERNATIONAL BUSINESS UNIT 1 Past to Present: Global Business.

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Can YOU define it?

INTERNATIONAL BUSINESS

UNIT 1Past to Present:Global Business

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For centuries, people of the world have traded. From the ancient silk routes and spice trade to modern shipping containers and satellite data transfers, nations have tied their economies to the rest of the world by complex flows of products and services. Free trade, which allows traders to interact without barriers imposed by government, can improve the living standards of people because it reduces prices and increases the variety of goods and services for consumers. It can also create new jobs and opportunities, and it encourages innovative uses of resources. However, even though free trade can benefit an economy as a whole, specific groups may be hurt. While certain sectors will experience job gains, others will face job losses. Still, societies throughout history have found that the benefits of international trade outweigh the costs. WELCOME, LADIES AND GENTLEMEN, TO INTERNATIONAL BUSINESS.

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ANY business transactions between two or more countries; activity involving

business operations across national borders to satisfy objectives of individuals,

companies, and organizations

International Business DOMESTIC BUSINESS

Any business that conducts business in only one country (aka home country)

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INTERCHANGEABLE TERMS??Multinational corporation (MNC) Transnational corporation (TNC) Multinational enterprises (MNE)

International companyGlobal companiesGlobal enterprises

Worldwide companies. Different title, same concept?

If in doubt, use the terms international business, but each is a little different from the other. Click on this website to find out just what we mean?

http://leeiwan.wordpress.com/2007/06/18/difference-between-a-global-transnational-international-and-multinational-company/

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Does this business qualify as a global enterprise?

• Angel Sanchez was born into a family that ran a made-to-order dress business. He was an immediate success in Caracas, Venezuela when he launched his own label in 1991. Four years later, he opened a showroom in New York. He now does business around the world. Wedding dresses between $3,000 - $7,000

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Why study International Business?

• We live in a world that is affected by what happens in many different parts of the world. International Business introduces you to SOME of the factors that business today needs to be aware of in order to compete in our interconnected and interrelated world. What Is Globalism? - YouTube

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LET’S TAKE A TRIP BACK TO THE BEGINNING. . .

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•150,000 years ago

BarteringDirect exchange of goods or services for other goods or services without use of money.

DID IT ALL START HERE?

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9Introduction to Globalization - YouTube

AFRICA

ASIAEUROPE

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At the peak of the Roman Empire around 180 AD, how many of today’s countries do you think were included within this vast Empire?

41 countires: Portugal- Spain- Andorra- United Kingdom- France- Monaco- Luxembourg- Belgium- Netherlands- Germany- Switzerland- Liechtenstein- Italy- San Marino- Vatican City- Malta- Austria- Slovenia- Croatia- Bosnia-Herzegovina- Hungary- Yugoslavia- Albania- Greece- FYR Macedonia- Romania- Bulgaria- Turkey-.. Syria- Iraq-. Cyprus- Lebanon- Jordania- Israel- Egypt- Lybia- Tunisia- Algeria- Morocco- Palestine

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TRADING ROUTES OF THE

ANCIENT WORLD

Yesterday and Today

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•Built around 200 BC

•important supply route for caravans of mules carrying exotic goods to and from southwestern China

•Now largely abandoned and unkempt, its paving stones are long overgrown with grass or are missing completely.

•It has long been known as the Ambassador Road since early dignitaries used the route to cross back and forth between British-ruled Burma (now Myanmar) and China.

•About 1,600 miles from Mainland China to Burma

THE LONELIEST ROAD IN CHINA THE AMBASSADOR’S ROAD

myanmar

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Silk road

THE SILK ROAD

Yesterday and Today

Extent of Silk Route/Silk Road. Red is land route and the blue is the sea/water route (4,000 miles) 206 BCEVideo: The Silk Road Video: Silk Production

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MYTH OR FACT?Some believe that the nursery rhyme "Ring around the Rosie" refers to the

Black Plague

"Ring around the Rosie" - red sores on the body - first signs of infection

"Pocket full of Posies" - some used herbs, flowers etc. to show others they were infected, so people could stay away

"Ashes Ashes" - the bodies of the infected were burned after death

"We all Fall down" - it was believed that the Black Death was the end of the world.

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AMBER TRADE ROUTEAMBER ROAD

•Trade of Amber started in New Stone Age 40-60M years ago

•Amber is a preserved resin that embalms dust, rock sand, insects, flowers, etc

•Prized jewelry today

•The Amber Room - YouTube

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APPIAN WAY, EGNATION WAYAPPIAN WAY AND EGNATION WAY

Formed GREAT EAST ROAD

Sea and land routes that connected the Roman Empire and the Middle East. It is said to have been constructed to more efficiently move people and armies throughout the Roman Empire (2ND CENTURY B.C.)

Appian way (built 312 BC)

350 miles long

Main sea route

Egnation Way (built 145 BC)

696 miles long

Major land route

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“Spice and Incense Road”

Incense – perfume or powerful aroma

Camel-driven caravans traced a 1,500 mile route between India and Egypt to trade in exotic frankincense, myrrh, sandalwood and rare spices. This fabled passage would become forever known as the Spice & Incense Road

Egypt

Saudi Arabia

Iraq

Iran (Persia)

Sudan

Turkey

Syria

Lebanon

Israel

Jordan(IRAQ)

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MAJOR OIL CHOKE POINTS, OIL FLOWS, & PIPELINES

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SUEZ CANAL•1869 Located in Egypt (120 mi.)•Links Mediterranean Sea to Red Sea•14% of world shipping•2010—can accommodate Suezmax tankers

SUMED•Pipeline alternative to for cargos too large for Canal.

Closure of the Suez Canal and SUMED Pipeline--add 6,000 miles of transit around tip of Africa, Cape of Good Hope

Mediterranean Sea

Red Sea

Strait of Gilbraltar

Cape of Good Hope

Persian GulfSuez Canal

SUMED Pipeline

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• Only sea passage from the Persian Gulf to the open ocean.

• One of world's most strategically-important chokepoints.

• 20% (16-17M barrels) of the world's petroleum passes through the strait.

• Majority of oil exported through the Strait of Hormuz travels to Asia, the United States and Western Europe.

STRAIT OF HORMUZ

Strait of Hormuz

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THE STRAIT OF MALACCA• Links Indian and Pacific Oceans.• Shortest sea route between Middle

East and growing Asian markets. • Carries about one-quarter of

world's traded goods (oil, Chinese manufactures, Indonesian coffee.)

• ¼ of all oil carried by sea passes through the strait to Asian markets (China, Japan, and South Korea.)

• 1.7 miles at narrowest point, creating a natural bottleneck.

• Piracy, including attempted theft and hijackings, is a constant threat to tankers in the Strait of Malacca.

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With the Panama Canal increasing in size to accommodate Suezmax” ships – it could be a great thing for American agriculture, especially

since 60% of our exports currently travel through the Panama Canal. 

• Located in Panama• Connects the Pacific Ocean with the

Caribbean Sea and Atlantic Ocean. • 14,000 vessels transit the Canal (60%

headed to and from United States.• Closure would greatly increase

transit times and costs adding over 8,000 miles of travel.

• Vessels would have to reroute around Cape Horn located at the tip of South America.

• Canal widened to accommodate Panamax ships.

Cape Horn

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LOOP Louisiana Offshore Oil Port

• 1972 owned by Shell and Marathon

• Handles 13% (1.2M/d of nation's foreign oil import and domestic crude.

• Operates the only offshore oil port in the nation where supertankers can directly offload their cargoes of crude oil.

• Located in Gulf of Mexico, 20 mi. south of Grand Isle, Louisiana.

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KEYSTONE PIPELINE2005—Pipeline for oil proposed from Canada to U.S.

Plus: 20,000 high paying jobs along pipeline

Plus: Injects $20B into U.S. economy

Oops—one of largest freshwater reserves in world at

Sand Hills, Nebraska close to pipeline.

Obama—in nation’s best interest to wait til 2013

2012 update: rerouting pipeline in Nebraska if approved in early 2013

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Final Frontier: The Northern Sea Route

A graphical comparison between the North East Passage (blue) and an alternative route through Suez Canal (red)

New shipping route only open a few months a year?

Could it save time and money?

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COLD WAR IMPACT ON GLOBALIZATION

1946-1991

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The United States wanted to encourage free trade throughout the world. The Soviet Union

wanted to shield off her own sphere from international commerce. Russia feared that trade

with the West would involve the risk of Russia being opened to western influences which would

have eroded the strength of the totalitarian regime. These differences led to much ill feeling between the United States and the Soviet Union.

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Cargo Network -- Nearly 90 percent of worldwide trade is made possible because products and goods are transported over the ocean on ships source: http://news.discovery.com/tech/shipping-network-map.html

Panama Canal

Suez Canal

Shanghai

Singapore

Port of Long Beach: Life of Ocean Container - Learn international shipping & Export Documentation – YouTube

Stopping Terrorism - Container Port Security - VOA Story - YouTube