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MGTA01H3 (583)
Chapter 5

MGTA03 Chapter 5.docx

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Department
Management (MGT)
Course
MGTA01H3
Professor
Chris Bovaird
Semester
Winter

Description
MGTA03Summer2011 Chapter 5 Understanding International Business The Rise of International Business o Globalization the integration of market globallythe world is becoming a single independent system as firms engage more and more in international business o Imports products that are made or grown abroad and sold in Canada o Exports products made or grown in Canada that are sold abroad The Contemporary Global Economy o International businessbusiness activities that involve exchange across national boundariesexample Canadian business selling to US customer o International business raises living standards of a nationo Now a firm must simply enter foreign markets just to keep up with its competitors tho Canada is the 7 largest exporter and importer in the world o The USA is out biggest customer and supplier o International trade makes for 30 of our GDP The Major World Marketplaces o The contemporary world economy revolves around three major marketplaces North America Europe and AsiaPacific o These 3 geographic places are home to most of the worlds largest economies biggest multinational corporations most influential financial markets and the highest income customers o The World Bank an agency of the United Nations uses per capita income the averge income per person as a measure to divide countries into 4 groups o High income countriesper capita income greater than 10065 example Canada US Australia Japan etc o Upper middle income countriesper capita income of 325510065 example Greece Hungary Poland Mexico etc o Low middle income countriesper capita income of 8253255 example Colombia Guatemala Samoa and Thailand China India o Low income countries developing countriesper capita income lower than 825 This is due to low literacy rates weak infrastructures unstable governments and related problemsnot attractive to international business at all Example Somalia is plagued by drought and civil war and starvationplays virtually no role in the world economy North America o US dominates the North American business regionlargest marketplace and enjoys the most stable economy in the world o Canada is second largest o Mexico has also become a major manufacturing centre especially along the southern US border where cheap labour and low transportation costs encouraged many firms to build manufacturing plantsthe auto industry has been especially active Europe o Two regions Western and Eastern Europe o Major international firms have headquarters in Western Europe dominated by Italy Germany France and the UK o Ecommerce and technology has also become increasingly important in Western Europe 1
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