Textbook Notes (368,875)
Canada (162,227)
MGTA01H3 (583)
Chapter 5

Chapter 5 Notes

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Management (MGT)
Chris Bovaird

Chapter 5 Understanding International Business Notes The Rise of International Business N globalization : the integration of markets globally N imports : products that are made or grows abroad and sold in Canada N exports : products made or grown in Canada that are sold abroad The Contemporary Global Economy N whereas in the past many nations followed strict policies to protect domestic business, today more and more countries are aggressively encouraging international trade N they are more freely opening their borders to foreign businesses, offering incentives for their own domestic businesses to expand internationally, and making it easier for foreign firms to partner with local firms through various alliances N similarly, as more and more industries and markets become global, firms that compete in them are also becoming global N several forces have combined to spark and sustain globalization: for one thing, governments and businesses have simply become more aware of the benefits of globalization to their countries and shareholders; for another, new technologies make international travel, communication, and commerce increasingly easier, faster, and cheaper than ever before; finally, there are competitive pressures: sometimes, a firm simply must enter foreign markets just to keep up with its competitors The Major World Marketplaces N the contemporary world economy revolves around three major marketplaces: North America, Europe, and Asia Pacific N these three geographic regions are home to most of the worlds largest economies, biggest multinational corporations, most influential financial markets, and highest income consumers N per capita income : the average income per person of a country o High income countries are those with per capita income greater than US $10 065. These include Canada, the US, most countries in Europe, Australia, New Zealand, Japan, South Korea, Kuwait, the UAE, Israel, Singapore, and Taiwan. Hong Kong, while technically no longer an independent nation, also falls into this category. o Upper middle income countries are those with per capita income between US $3255 and US $10 065. This group includes, among others the Czech Republic, Greece, Hungary, Poland, most countries comprising the former Soviet Bloc, Turkey, Mexico, Argentina, and South Africa. o Low middle income countries are those with per capita income between US $825 and US $3255. Among the countries in this group are Colombia, Guatemala, Samoa, and Thailand. Some of these, including China and India, have huge populations and are seen as potentially attractive markets for international business. o Low income countries (often called developing countries) are those with annual per capita income of less than US $825. Due to low literacy
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