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MGCR 382 (143)
John Saba (33)

Lecture 2

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Management Core
MGCR 382
John Saba

Lecture2wwwebookssavecom Virtual bookwwwcoursesmartcom Why do some industries become global while others remain local or regional Broader market increased salesFactors Cost Market size Product life Resource availability Government regulation Example aircraft manufacturingno single country has a market big enough to justify the costs of developing and building new jets Example bakerymore likely to be localtastes and clients tend to be more local An Overview of International Business cont Explain the importance ie reasons for understanding of International Business ObjectiveConsidered from 5 distinct perspectives1 The global economy 2 The national economy 3 The firm 4 The society 5 The manager our book only address this one1 The global economyWe understand how IB is a facilitator of the global economy and interconnectednessDrivers of the changing business landscape since WWII are globalization and technologya Globalization since the General Agreement on Tariffs and Trade GATT 1947 the world has been transformed with worldwide economic interconnectedness and unprecedented growth in international businessAssociated trends include Firms increasingly use mass production efficiencies including outsourcing 19902000 Substantial market liberalization privatization and industrialization in Generally Emerging Markets about 25 countriesSpecifically Fast growth BRIC economies Brazil Russia India ChinaExample Management focusIntel brings changes to Vietnams economy and culture2000 US opened trade relations with communist Vietnam Vietnams rapid growth is partly because of globalization which attracts corporation such as Intel Intel seeks new markets and lower costs of production Intels success started with awareness of the tight control of the communist Vietnamese governmentb Technologys effects The Internet and ECommerceMake geographic barriers less relevant Make International Business viable and necessary for firms of all sizes Lower cultural barriers Encourage convergence of consumer tastes and preferences2 The national economyFrom the viewpoint of the national economy we understand how IBs contributor of national economic well beingInternational Business promotes economic prosperity and living standards by providing access to more markets Effect Countries worldwide are opening their borders to foreign trade and investment International trade is the engine for job creation US and Canada every 1 billionincrease in exports creates more than 20000 new jobs US 1out of every 7of US sales is made abroad Canada 2out of every 5of Canadian sales is made abroadInternational Business provides opportunities forFlexibility and efficiencySmall and medium size enterprises SMEsNoteInternational business is both a cause and an effect of increasing national prosperity The prosperity resulting from this global economic growth has both benefits and costsBenefits include Tendency towards freedom and democracy some exceptions include chinaVietnam
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