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ANTA01H3 (187)

mgta01 ch5.pdf

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Genevieve Dewar

Ch 5 Understanding International BusinessGlobalization is the global integration of marketsImports are products made abroad and sold in CanadaExports are products made in Canada and sold abroadInternational trade is increasing in popularity The old trend was to protect domestic businessThe Global EconomyThe world banko The World Band divides countries into 4 groups based on per capita income average income per person in a countryo Highincome Canadap Uppermiddleincome Mexicoq Low middleincome China potentially attractive markets andr Lowincome countries less attractive markets Regions and marketsThe global economy revolves around three major markets divided into regions o North America Canada and US are each others largest trading partners o Europe Eastern Europe becoming increasingly important 1992 European Union to remove fragmentation and trade barriers o AsiaPacific Major source of competition for North American firms Forms of Competitive AdvantageCompetitive advantage among nations takes on 3 forms and explain why countries partake in international trade 1 Absolute advantage is a nations ability to product something more cheaply or better than any other country2 Comparative advantage is a nations ability to product some goods more effectively than others3 National Competitive Advantage is a newer more widely accepted model Four factors encourage international trade They may be referred to as a national diamond 4 pointsFactor conditions factors of production of a countryDemand conditions large domestic consumer base forming strong demandRelated and supporting industries strong local industrial suppliers or industrial customers Strategies structures and rivalries industries that stress cost reduction higher quality and innovationo International competitiveness ability of a country to generate more wealth than its competitors in world markets
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