The Global Marketplace :
I – Our Changing World :
• Although today’s growth continues to rely on significant U.S economic capacity, the
next few decades will see a significant shift in this regards as China, India, Brazil
and other economies mature and benefit from the significant foreign direct
investment (FDI) currently underway within these countries, and from the overall
development of their monetary banking systems, intermodal transportation facilities,
and competitive business models and operating platforms.
What is Initial Public Offering? (IPO)
• The sale of a company’s stock for the first time in the public marketplace with the
intent to raise equity (money) to fund company operations and growth.
The Global Marketplace:
• Whether it is through operational growth, strategic alliances, formal partnerships,
mergers or acquisitions, the global marketplace is becoming home to an increasing
number of businesses seeking to operate via an internationalbased business
II – Why Go Global?
Companies look to move beyond their domestic markets for a combination of reasons which
• New Market Opportunities.
• Cost Reduction Opportunity.
• Resource Base Control.
• Closeness to markets.
• Economies of scale. What is Offshoring? (Cost Reduction Opportunity)
• Transferring a component (operations, service, support) of a firm’s business system to
another country for the purpose of reducing costs, improving efficiency or
effectiveness, or developing a competitive advantage.
What is outsourcing? (Cost Reduction Opportunity):
• Contracting out a portion of, or a component of, a firm’s business system for the
purpose of reducing costs, improving efficiency or effectiveness, acquiring expertise,
or developing a competitive advantage.
What are economies of scale?
• Reductions in the cost base of an organization as a result of greater size, process
standardization, or enhanced operational efficiencies.
III – Global Market Stability: The Role of Government.
What is Liquidity?
• Refers to the cash position of a company and its ability to meet its immediate debt and
operational obligations. It also refers to the ability of the company to convert existing
assets to cash in order to meet such obligations.
What is solvency?
• Refers to the long term stability of the company and its ability to meet its ongoing debt
and operational obligations, and to fund future growth.
Despite the 2008/2009 economic downturn and the sluggishness of global trade, the longterm
economic forecast for the global marketplace remains one of ongoing growth and
development, with emerging economies leading the way.
What are the fundamentals of global growth?
• Ongoing commitment to international trade system. • Market openness.
• Absence of protectionism.
• Adherence to the fundamentals of fair trade.
• Balanced economic development.
• Responsible sovereign debt management.
What are the WTO’s Key services?
Administers trade agreements.
Acts as a forum for trade negotiations.
Settles trade disputes.
Reviews national trade policies.
Assists developing countries in trade policy issues via technical assistance and
Links with other international organizations to ensure the smooth flow of trade.
What are credit facilities?
• A general term that describes the variety of loans that could be offered to a business or
What is black market?
• The illegal market that arises within economies where goods are scarce, taxation on
such goods is high, or the prices of legitimate goods are beyond the capacity of
significant segments of the population to buy.
What is Balance of Trade?
The relationship between imports and exports over a defined period of time. A
positive balance (where export exceeds import) is known as a trade surplus. A
negative balance is known as a trade