ADMS1000 FINAL EXAM 1
13 February 2013
SESSION 7: Global Context I
Learning Goal: To address the significance of globalization for business in Canada, as well as in other parts of the world.
We will identify the forces driving globalization and consider major actors in this phenomenon such as multinational
corporations. The implications of foreign ownership and trade will also be addressed.
Reading: Chapter 6, pages 107-125.
Case: no case assigned.
NO CASE STUDY:
EU is going to trade freely with the united states.
North Korea is doing nuclear steps.
Business: apple has 137 billion dollars. Steve Jobs.
Dividends – payments to shareholders. Every share gets a dollar. 1000 share 1000 chq, end of the term.
Ryerson is having issues with food court.
1) Lecture 7 and 8
Confronting the global economy
How does global is….p 3 slide:
Defining globalization…..a process approach
Nafta: no American free trade agreement. United states if you buy something made in USA or Mexico and you bring to
Canada you don’t pay legal tariffs. Why buy Mexican – instead of japan or china. If you declare – México you just pay
HST, from other country, pay 10%.
Slide 4: THE IMPETUS TO “GO GLOBAL” AND CANADIAN BUSINESS:
Push factor, what’s happening in Canada? Not good, pushing out. Margin is too saturated, you cannot make much money,
you move to other markets. Pull markets. No labor. Reduce trade barriers. Something that prevents you trading –
importing you pay duties. Exporting – pay duty. NAFTA – companies can choose. GO GLOBAL OR come to our market.
IMPROVE MARKET. TECHNOLOGY has helped contact people across the world.
Resources are more available. Labor, material, technology. Reduced democracy: govt change, show stability. More rules
and regulations. More democracy. More entrepreneurs will invest into the country.
KNOW THE CHANNEL. CHANNELS OF GLOBAL BUSINESS ACTIVITY: slide 5.
Outsourcing…Microsoft apple visa bell – located. Save money.
Issues with outsourcing: design shirts manufactured. Apple designer Google foxcom – you lose control. End up cancelling
Obama and Romney – us dive china going up – Conon O’Brien – tech support story.
When you make something in Canada and send to other country, export, bring in, import - then globalization. When dollar
goes up, we are exporting stuff. It will cost people more now. When dollar goes down, we buy a lot. Our prices will go up
because we want more. MERGER – TWO COMPANIES UNITE and become one. TWO COMPANY DO PROJECT
TOGETHER, NOT MERGE IS: JOINT VENTURE. Most want to go to the USA, want to expand. The don’t have money to
invest. No marketing channels. How to get to Canadian markets. They merge then. MOLSON COORS. Less people
working. Help each other join market shares. Conflicts – who is the chairman.
ACQUISITION: BEST BUY – source is expanding – best buy wants to expand in Canadian markets. Invest lots money
and time to enter in the market. How to compete with other companies. They bought up future shop. It cost more. They
were in the market right away. Got info. Within two yrs. Rogers bought Fido but cannot force much on them. Target took
over the lease of Zelllers. HUDSON BAY owned ZELLERS.
FRANCHISING: I want to use his McDonald’s brand name. Intercontinental hotels. You need to follow the structure.
Everything is done for you. Niche markets – like maclobster. Licensing: right to use something. Own the RIGHT TO USE
– NOT OWN. DIFFERENCE IN FRANCHISE AND LICENSING: OWNERSHIP – licensing: you don’t own anything.
MULTINATIONAL CORPORTATION – slide 6.
Corporations with offices in different countries. Presences in two different foreign countries. Huge and big.
BOMBARDIERS – trains planes. SNC LABLENE. MAGNA. BLACKBERRY. LU LEMON – sell yoga clothes. Industrial
units – different floors. Companies you never heard of. Thousands in Canada.
Companies, ¼ owned by MULTINATIONAL COMPANIES worldwide. Rest is suppliers – no stats.
Slide 10: BENEFITS AND THREATS OF MNC”S. 2
We bring technology, management, we are good guys, we are giving you all these things. They have no loyalty. MOBILE
PROFITS: they can change the money to USA and take it out of Canada. Difficult to control – big and powerful.
POSSIBLITY OF MONOPOLIZING HOST ECONOMIES: Toyota –
INTERNATIONAL TRADE: A BRIEF HISTORY: slide 12.
LOGIC OF TRADE:
Encourages nations to specialize in goods/services in which they are is most capable and trade with other countries for
goods/services not produced domestically. Trade. We give wood, oil, avocado, ice and water – SWAP – TRADE – take
other things from them. TRADE SURPLUS – SELL MORE THAN BUY – WE make chairs, give them we buy tables. Sell
1000 buy 5000 – we are getting more, so we are getting richer. SELL MORE BUY LESS. EXPORT MORE BUY LESS.
One flaw: other producer doesn’t have money or job from other country but we cant do anything.
Slide: 14, INTERNATIONAL TRADE: A brief history
2) 27 February 2013
SESSION 8: Global Context II
Learning Goal: Our exploration of globalization continues with a consideration of the role and impact of trade on Canadian
business. We will also consider the topical issues that arise as a result of the power of globalization to impact societies.
Case: p. 138-140 Amazon in Canada.
INTERNATIONAL TRADE slide #14
Canadian dollars is costing money. Gone down 3 ½ cents. How does this cost us? Take items see where its made
– not in Canada, we imported it, dollar goes down, price goes up. Grocery going up. Renewable energy will cost
consumers 200 million dollars. Star’s front page. Senator with two cops –
HOW DEBT CAN AFFECT A NATION. TRADE:
In order to price match with foreign price of .25c and mine $1, government protects the cup industry. Its to protect
employees so the person at loss of $1 doesn’t fire its employees. Government will put codas and imports. NEGATIVE: it
limits consumers’ choices. Not everyone will be importing. Price is inflated. Money goes out of our pocket to protect. Why
do I kill myself? Because government will protect me. My incentive: FEW NEGATIVES, FEW POSITIVES. Government
wants to protect the industry.
Reduce trade barriers – multinational corporations are benefitting. Manufacturing in china, low prices.
JP Morgan chase: commercial investment bank in trading.
CANADA-US FTA – NAFTA (1989) MEXICO, US, CANADA.
Anything amongst within 3 countries is allowed in free trade.
EU you can work w/o visa. Lets become one. Objectives:
We are biggest producer of soft wood and lumber. NAFTA had rules: how to reduced dispute. We will do this and this….
Through steps – judgment was made that US is wrong and pay Canada $5mill in damages. US disagree, forget court, call
the army. So we decided don’t pay us, no stress from the army. BRIAN MULRONEY. He was a prime minister. He’s
diabetic. Associated with GST. If you vote for me, I will go ahead with FREE TRADE AGREEMENT. He signed the
agreement. PC party went down. Next election – Brian Mulroney’s party went down from majority to 2 seats. Kim
Campbell. JOKE of the week. CORBET AND PC GOVT. have in common? both have two seats. REFORM
NAFTA: pro’s cons’ for Canada:
IMPACT ON TRADE
Our economy will collapse. Biggest fear was unemployment.
Pros: increases levels of trade between Canada, us and Mexico. If dollar goes up or down, people freak out. $1 can to .
62c US. Business was coming into Canada, we started exporting, Canada’s economy went up. Discount of 38%. US
started to drop the dollar. When our dollar geos up, ppl don’t buy our goods. Canada does a lot of import to the US. Yen –
japan to come down. China ADMS1000 FINAL EXAM 3
IMPACE OF CANADIAN EMPLOYMENT AND BUSINESS.
Pros and cons
Did US company come and take over our economy? They are controlling our economy. Wal-mart, home depot controlling
retails. Competition is strong.
We are demanding. Cowboy attitude from the US. Hollywood is affecting us 24 hrs., American books, writers, everything
is taking over, then we will be one of them. We don’t want that. If we sell cheaper to the us we can have Canadian writers
to the us, give them royalties. It didn’t work. All magazines have now Canadian culture, or something Canadian in them
inside the magazines. Paul Bernardo: ban to protect the kids. Culture was big thing – NON NEGOTIABLE. Canadian
culture has to be protected and writers.
IMPACT ON CANADIAN COMPETITIVENESS.
Pros and cons: we will lose from both sides. IMMIGRANTS is making housing prices going up. Sell high buy high. Need
support from labor and employment on housing.
Italy’s elections – our stock market is affected. Why? Market saw, the party that’s winning is against cutting back the
budget of the people that owe. Who owns all the debts. World bank, International monetary fund. READ THE BOOK!
The new rulers of the world. – VIDEO:
Centralized around Indonesia.
IMS, WORLD BANK, GLOBALIZATION and anti-globalization ppl are saying. Slavery is not over, we move our production
somewhere else where labour is cheaper, we bring it over. Propaganda.
John pilger – 1960’s. create wealth and reduce poverty. Globalization.
200 giant corp run ¼ of world’s economy. GAP, NIKE, BABY CLOTHES, ADIDAS, TIGER WOODS, is paid more money
to promote nike than all ppl working in production of Nike. Impact in one country; INDONESIA.
Old meets the news. Its rich in copper gold oil timber, labour skills of ppl. Colonies by the Dutch in the 16 century.
Pramoedaya anante. Man announcing.
West controlling finance and commerce.
Wealthy: Chicago wedding. Two merchant families united. Dynamic economic success. Human prices. Made in
Indonesia. 1 dollar a day. There are open sewers. Children unnourished. Children carry mosquitoes. Kills children. Works
camp condition. Famous brands are made cheaply for western markets. Economic processing zone. Factories. Frenzie of
production. Owned buy Korean . Nike reebok Adidas. Gap: working conditions were worst. Young women working in tight
heat condition. Long working hours. 24 hrs shifts with couple of breaks, 2 hrs later start another shift. Cannot refuse to …
gap and old navy. Code of vendor conduct: wages and hours. Monitoring … DITA SARI.
Trade union leader. NO CODE OF CONDUCT.
Government wants cheap labor to attract foreign investors.
Rate of unemployment is high. So people will work what ever work they have. 60 hrs wk. no sitting down. 16 hrs standing.
No conduct or rules are displayed. Or shown to employees. 4 pense, for 8 pounds. CEO got millions last year.
Victimization if workers speak up. DITA SARI was tortured in prison.
For some manufactures our standards we don’t do business with them. Barry coates. World development. Secret filming.
Luxury hotels were build on 1 million ppl’s mass murders. General sahata murdered in mid 1960’s. astrocities. Teeth.
John pilger. 1965 – a communist was he a suspect.
President Nixon. A nationalist believed in independence.
Roland challis. Bbc se Asian – interview
British propaganda – british diplomat says its part of the deal. Thousands were around. CIA supplied list of 5000 to be
assassinated. Sir andere gilchard wanted shooting…
British bodies flooding. Holocaust. Ship sailed troops. British was involved in holocaust. Time magazine called them
vengeance. A gleam of light in Asian.
1967, blood bath. INDONESIA INVESTMEN CONFERENCE. DAVID ROCKERFELLER. Ici, birtish American tobacco.
American express, semens. Tops giants.
Globalization. The killing of million ppl. Professor Jeffery winters. – spoke
Conference divided into 5 sectors. Chase manhattan was there. They designed legal infrasturted for Indonesia.
Mass murder. Many ppl died in unfortunate tragic circumstances. Resulting from preivous regime. If foreign investment
would have prevented this? 4
1980’s Margaret thatcher – globalization begain in Britain then. New rulers of the world: WASHINGTON, WHITE HOUSE,
WORLD BANK AND IMF. AGENTS OF RICHEST COUNTRIES OF THE WORLD. ESPECIALLY USA. WW2, TO
REBUILD ECONOMY OF EUROPE. OFFERING LOANDS TO POOR COUNTRIES. ALLOWING WESTER COUNTRIES
BARRY COATES. – announcer in the video
Poorest countries are in vicious cycle. Cannot get out of it. Dr susan George. – author:
WORLD BANK: capitalism for poor. RICH GETTING RICHER, POOR GETTING POOER.
8 billion dollars went to cofrrupt officials.
Globalization means capital money. Where economy collapsed – sahata was forced to step down. Estimated
THE MIRACLE ECONOMY: world bank calls it.
Irony of west claiming giving democracy but rather not true.
10 billion dollars unaccounted for. Challenge world bank over world court. Citizens never got the money. Nicholas stern
chief economist of world bank.
20-30 percent went o govt. there is strong case that poverty dropped – illiteracy figure are more reliable. First time world
bank says regime was murdered by its dictatorship. Dita sari. Political prisoner. Ppl have to pay more for health and
access. Sahata family money stolen is being paid by the children.
He cannot bujy drugs to keep them alive. Family living on less than $2/day.
Stanley fischer – leader in charge interviewed.
Debts and paid is what financial system is based on. Globalization has caused globalization has caused discrimination.
Workers were exploitated. Unemployment was high. Human rights was taken away.
60’s onwards, income rose. Sahata regime. Did your regime speak up on it. It insisted to host corrupt practices in
monopoly areas, says Stanley fischer – angry.
IMF AND WORLD BANK. Suppliers to dinner tables of the rich.
Tony Blair. BRITAIN PM: RICH RICHER POOR POORER. London’s west end into vildence.
GUY TAYLOR globalization. GENOCIDE – putting third world in debt.
World trade organization.
BARRY COATES WORLD DEVELOPMENT MOVEMENT: announcer interviewed:
Ppl cant be spectators or standby’s. George potattici – interviewed:
29 most powerful countries in the world.
Vandana shiva environmentalist. INDIAN WOMAN.
Ppl are starting to say govt that only that pays isn’t our ppl…
Britain – rich country, newsagent financial – 1 in 5 british children grows up in poverty.
Why cant poor make decisions on things that bring hardship in their lives.
3) 06 March 2013
SESSION 9: Political Context – HOW MUCH IS INCOME TAX IN THE HIGHEST BRACKET.
Learning Goal: To analyze the nature of the relationship between government & business. We will discuss the impact of
government actions on business with special attention given to issues such as government subsidies and regulation. We
will also explore the trends toward deregulation & privatization.
Reading: Chapter 7
Case: p.171-172 TBA
Tide is $5 cheaper. DEFICIET – GOVT. we been having boom years for past 15 years.
SLIDE 1. Session 9:
Role of govt. to enforce policies and services. To provide services. WHAT IS FUNCTION OF GOVT.? Govt. acts as our
guardian, they are supposed to do what’s good for the society. Act in best interest of society.
We are in capitalist society. Communism.
Govt. needs money. Govt. takes money thru taxation, collect revenue then looks after us. 45%. NS 48%. Ontario 42%.
Tax. Incocome tax doesn’t include UI, cpp, etc. at 45%. We make $100,000. Net pay $55000. Spend it at 13%. Property
tax. $5000/yr tax on house. 5% from the salary. Smoke, gas, drinking, electronic nickel and dime tax. 3% - GAS is big
one. Hidden taxes. 10% duty on IMPORT. Hidden in the price we are buying. 8%. 10% employers pays - $45%
employees pays. Employers adds it on COST OF GOODS, we end up paying that. 70% goes to taxes.
DEBT OF THE NATION:
Pushing Greece, france, Portugal – all will fall in debt. What will happen to housing market in 15 yrs. – up. Land transfer
tax. House moving tax. Capital gains is also taxed. Extra money in booming economy. ADMS1000 FINAL EXAM 5
Land: $5mill ($50k property tax, I convert it into condominium, $500,000 each) land is not worth $150mill. Property tax is
on $150mill. Toronto is #1 right now. 2 is Mississauga $33mill . 3 New York $10mill. We have to pay attention to
Guardian – Govt. biuys companies and runs businesses. Natural monopoly – ie electricity. Services govt uses – addiction
to gambling or to drugs – agencies are run by the govt. CANADA POST. Govt pays them the money spends on agencies
and businesses, LCBO – one of the profitable organizations govt. has. GOVT. people are not businesses ppl.
Electricity bill: if bill is $400 – look for details. Delivery fees. Many other fees. $200 that we pay for other usage than the
actual use of the electricity. CROWN something…. Form the slide?
Govt. as a guardian of society and business owner – crown corporations.
The role of govt. in business – regulation/regulating.
Capitalist economy. They regulate to make sure of economy works in particular way. They modify economic behavior. We
have tied regulations with BANKING. Banks in us deregulated. Canada didn’t TD wanted to merge with bank of Montreal.
Canada trust merged with TD. Govt. stepped in and disallowed it. Govt. said no good. Not too many choices for the
citizens. Govt. comes in and put regulations. You cannot do this, do this. Govt. wants to cool off the market, to stabilize.
When we buy house, we get mortgage. If you put $30% down, we don’t have to show income. But govt. says you still
have to show income, to match payment, especially if you are self-employed. Ppl buy houses, rent it, flip it – govt says
you cannot do that. You have to show your income. Govt. regulates to cool down the economy to modify behavior.
Mortgage rates etc.
The role of govt. in business – regulating market practices.
How many times do we look at what we buy? Govt. pays agencies to ok it first. Inspector has to come in to check wiring
for fire. Cottage cheese – try to import it. Look at the back of desk lamp. CSA ETL UCL – Canadian stamp. We are risking
for few dollars. Bring shirt for kids. We shop still. Financially stores can be sued or fined. Canada is the pickiest countries
in the world. We have highest standards.
Govt. is a business. Biggest purchaser of g&s in Canada. They mostly buy from Canadian sellers.
Govt. is also a guardian of businesses and society. To make sure businesses trade properly so that the citizens can have
a job. Look at what’s best for the businesses. They do subsidies, trade missions, bail ups etc.
Deregulation – govt. go back and change the law. Deregulation can be good or bad. Telecom industry was heavily
regulated. No one could sell. WE paid a lot of money. Govt. didn’t allow any competition. They deregulated it. They
opened it up. Competition came in, prices went down, technology came in. Changed from few dollars to few dollars.
Credit card companies from banks are selling insurance now. Govt. is guardian of business: subsidies. They give us
money to help us run a business. Tax free or something…. They were supporting high tech industry. Subsidy to let it grow.
Give incentives to entrepreneurs to grow. Govt. also do bailups: I will give you plastic, you sign up. Week late plastic
comes in post, we use It to shop. If plastic doesn’t work, a paper comes in says you owe 10grand. $2000 interest comes
in post. Then they threaten you to pay them back. If parents help you in paying the DEBT, MEANS ITS BAILOUT. If
company has a debt., AIR CANADA, govt. BAILS YOU OUT.
Govt. as guardian of pvt. Business:
Bail out and subsidy can work but they have to go with an agenda. Why is AIR CANADA always full?
If govt. doesn’t want to run a company – they sell the firm to private company – to public. PEARSON INTL’AIRPORT.
Govt. charge taxes once they privatize it. To stop the flow of resources. They get cash after selling and they love it. 6
Negative: why are tickets expensive - Pearson is the most expensive airport in the world. Fuel feel, icing fee, overnight
fees, because it’s a pvt. Corporations. That’s why airlines charging us very high. We are the 4 largest city in north
Mexico new york then Toronto.
Negative of privatization: - 407 We pay for 407. Pvt highway paid for French company. .25c. 100km/hr speed limit. $25, $2
monthly fee. $30. $10.25/hr – we have to work 4hours to pay this. Foreign company takes over. If we don’t pay the fee,
govt. wont allow a sticker to us.
$650mill to build SKYDOME. Sold to group of pvt. Investors. $150mill. Rogers purchased it for $25mill.
Pvt. More competition, consumer wins, more efficient when there’s competition. What happens to shareholders?
Stakeholders? Govt. has to regulate to look after society.
To save some jobs, create some jobs. Define what subsidy is: When govt. steps in and provides assistance, loans, tax
breaks, grants. Why govt. should step in? They can help an industry grow. To protect an industry. It could generate tax
revenues, or future tax revenues. Pertaining employment level. Define theory, what is subsidy. How many jobs will be
created? They start off hiring 200 employees. 2000 over 15 years – hiring of employees. They are creating 2000 jobs.
Define theory, then dissecting the case. Businesses should manage their own taxes. Fair competition. If govt. helping one
company, why aren’t they helping other company? Have they paid any back? 20 mill times 15 = $300million.
Should the govt. continue to profit? OUR OPINION: it should have some substance with document. Businesses should
manage their own cash flow. Give opinion with supporting documents. Not just theory and facts, also opinions.
4) 13 March 2013
SESSION 10: Responding to the Environment: Developing Business Strategy
Learning Goal: To develop an understanding of strategic management and its relationship to the external environment.
We will consider the forces that shape industry structure and how they influence business and corporate level strategies.
Reading: Chapter 9
Case: p.220-222 Starbucks Targets Quebec’s Café Culture
- New pope from Argentina.
- 1.2 billion followers out of 7 billion in the world.
- One company ordered 1 million blackberry phones.
- Cell phone industry: mobilicity - $30/unlimited everything.
- Kudoo is owned by Telus.
- Govt is stepping in to protect new guys and give them some market share.
- Not as competitive. Big war with CRTC.
- COMPETITION – INDUSTRY
How do we evaluate industries and why are some better than others? How do we know if something is good or bad?
Ie product life cycle. To see whether or invest or not invest.
- industry as a whole.
- We ask for loan – bank asks for business plan. Industry report. Is it doing well? Profit margin? Have all these
stats. As analyst or stock broker.
- Zeller bankrupt walmart doing well. Distribution. Duty management. Competitive edge.
- Slide 2:
- Competitive advantage. Strategic
- Slide 3:
- INDUSTRY STRUCGTURE ANALYSIS.
- Airline industry. Beer brewing industry.
- FIVE-FORCE MODEL: threat of new entrants. Bargaining power….slide 4.
- Threat of new entrants: new company entering the market, telus new entrant for bell. Govt. not allowing more
companies to enter. High risk if I m doing well and someone opens next to my restaurant.
- Slide 5: Threat of new entrants: BARRIES TO ENTRY – Leons and Brick. Preventing us companies to come and
take Canadian market. Why is shoppers drug mart every corner. Trying to prevent entry. Coke and pepsi buys
shelf space in shops, great marketing. You go to loblaws and ask where is your soft drink. Shopkeeper hides it.
You get a barrier to entry. They buy you out. BARRIERS TO ENTRY. Other competitors can enter quickly. Prevent
others to come in. make it expensive. Switching cost. Do all you can to prevent them from entering. ADMS1000 FINAL EXAM