Week 02 Competing In A Global Market
description
Transcript of Week 02 Competing In A Global Market
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Competing in a global market
Week 2
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
ompeting in a global market
Jakarta, September 2008
Barrier to international trade
international business
International business management
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
What is globalization ?
Process by which
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Process by which
the world economy is becoming
a single interdependent system
(Griffin, 2004)
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Which one do you like ?
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Which one you recognize more ?
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Is this your favorite spot ?
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Is this your favorite spot ?
Intro …
Source: www.irwanzulkefli.blogspot.com
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
What are exports and imports ?
Imports are products made or grown abroad but
sold domestically;
while exports are products made or grown domestically but shipped and sold abroad
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The Contemporary Global Economy
Several forces have combined to spark & sustain globalization:
1. Government and businesses are aware of benefits of
globalization to businesses and shareholders.
2. New technologies make international travel, communication
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
2. New technologies make international travel, communication
and commerce much faster and cheaper.
3. Competitive pressure sometimes force a firm to expand into
foreign markets to keep up with competitors.
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Trade Agreements
☯ General Agreements on Tariffs and Trade (GATT)
☯ North American Free Trade Agreement (NAFTA)
☯ European Union (EU)
☯ World Trade Organization (WTO)
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The North American Marketplace and The Nations of NAFTA
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The Major World Marketplace
Per capita income is the average income per person.
1. High-income countries: those with per capita income greater than $ 9,386.
2. Middle-income countries: those with per capita income of less than $ 9,386 but more than $ 765.
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
less than $ 9,386 but more than $ 765.
3. Low-income countries (developing countries): those with per capita income of less than $ 765.
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The Major World Marketplace
NORTH AMERICA� World’s largest marketplace and most stable economy.
� U.S. dominates.
EUROPE� Western Europe is a mature but fragmented marketplace.
� Eastern Europe has gained importance as a
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
� Eastern Europe has gained importance as a marketplace and a producer.
PASIFIC ASIA� Nations of the ASEAN are an important force in the world economy and a major source of competition for north American firms.
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Europe and The Nations of the European Union
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The Nations of ASEAN
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Forms of Competitive Advantage
• Absolute advantage is the ability to produce something more efficiently than any other country can.
• Comparative advantage is the ability to produce some product more efficiently or better than other products.
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
produce some product more efficiently or better than other products.
• National competitive advantage is an international competitive advantage stemming from a combination of factor conditions; demand conditions; related and supporting industries; and firm strategies, structures and rivalries.
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Absolute Advantage: Saudi Oil
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Absolute Advantage: Brazilian Coffee Beans
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Absolute Advantage: Canadian Timber
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Absolute Advantage: Mexico Tequila
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Comparative Advantage: United States Movies
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Bollywood… ???
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Comparative Advantage: United States Computer
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Comparative Advantage: United States Farming
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Comparative Advantage: Guatemalan Textile
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Comparative Advantage: South Korea Electronic
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
National Competitive Advantage: French Wine
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
National Competitive Advantage: United States Fast Food
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
National Competitive Advantage: German High-End Car
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Attributes of National Competitive Advantage
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Import - Export Balances
Balance of trade is the economic value of all products a country imports minus the economic value of all products it exports.
Trade deficit occurs when a country’s imports exceed its exports (a negative balance of trade), while a trade surplus occurs when exports exceed imports (a positive balance of trade)
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Balance of payments
is the flow of money into or out of a country.
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Exchange Rates
Exchange rate is the rate at which the currency of one nation can be exchanged for that of another.
1. Fixed exchange rates: the value of any country’s currency relative to that of another remain constant.
2. Floating exchanger rates: the value of one country’s currency relative to that of another varies with market
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
2. Floating exchanger rates: the value of one country’s currency relative to that of another varies with market conditions.
3. Euro: a common currency shared among most of the members of the EU
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Exchange Rates and Competition
When a country’s currency rises― becomes stronger―companies based there find it harder to export products to foreign markets and easier for foreign companies to enter local markets.
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
to enter local markets.
When the value of currency declines― becomes weaker―companies based there find it easier to export to foreign markets and harder for foreign companies to enter local markets.
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Going International
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
international business
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Levels of Involvement
1. Exporters : make product in one country to distribute and sell in others.
Importers : buy products in foreign markets and import them for resale at home.
2. International firms : conduct a significant portion of their business abroad.
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
business abroad.
3. Multinational firms : design, produce and market products in many nations.
International business management
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
International Organization Structures
• Independent agents are foreign individuals or organizations that represent an exporter in foreign markets.
• Licensing arrangements are arrangements in which firms choose foreign individuals or organizations to manufacture or market their products in another country.
• Branch offices are foreign offices set up by an international or
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
• Branch offices are foreign offices set up by an international or multinational firm
• Strategic alliance (also called Joint Venture) is an arrangement in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner’s country.
• Foreign Direct Investment (FDI) involves buying or establishing tangible assets in another country.
International business management
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
International business management
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
International business management
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
International business management
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
1. Social and Cultural Differences
Firms planning to conduct business abroad must understand the social and cultural differences between host country and home country.
Differences in:
* Language
* Tastes and preferences
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
* Tastes and preferences
* Sense of value
* Shopping habits
Barrier to international trade
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
2. Economic Differences
Economic differences can be pronounced.
• A firm must know how much the government is involved in a given industry operating within a mixed economy.
• The impact of economic differences can be great in planned economies.
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
great in planned economies.
Barrier to international trade
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
3. Legal and Political Differences
Government can affect international business in many ways. They can :
• Set condition for doing business within their borders and even prohibit doing business together.
• Control the flow of capital and use tax
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
• Control the flow of capital and use tax legislation to discourage or encourage activity in a given industry.
• Confiscate the property of foreign-owned companies.
Barrier to international trade
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Quotas, Tariffs, and Subsidies
• Quotas is a restriction on the number of products of a certain type than can be imported into a country.
• Tariff is a tax levied on imported products.
• Subsidy is a government payment to help
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
• Subsidy is a government payment to help a domestic business compete with foreign firms.
Barrier to international trade
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
What is protectionism ?
Practice of protecting domestic business
against foreign competition.Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
Barrier to international trade
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
4. Legal and Content Laws
Local content laws require that products sold in a particular country be at least partly made there.
Firms seeking to do business in a country must either investthere directly or take on a domestic partner.
Profits from doing business in a foreign country stay there rather than flowing to another nation.
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
than flowing to another nation.
Barrier to international trade
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
5. Business Practice Laws
Business practice laws are laws or regulations governing business practices in given countries.
• Cartels are associations of producers that control supply and prices.
• Dumping is the practice of selling a product abroad for less than the cost of production.
Content :
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
less than the cost of production.
Barrier to international trade
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
thank you
Content :
The rise of international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]
thank you
Barrier to international trade
international business
International business management