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Chapter 5

Chapter 5

Management (MGT)
Course Code
Chris Bovaird

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Globalization - the integration of markets globally
Imports products that are made or grown abroad and sold in Canada
Exports products made or grown in Canada that are sold abroad
The Contemporary Global Economy
Capital mobility the movement of money from country to country
Business today are aggressively encouraging international trade
Freely opening their borders to foreign businesses by offering incentives for their
own domestic business
New technologies make international travel, communication, and commerce
increasingly easier, faster, and cheaper
The Major world Marketplaces
Three major places: North America, Europe, and Asia-Pacific
Per capita income average income per person as a measure to divide countries
into one of four groups
1.High income countries capita greater than $10 065 US. Include: Canada,
YS, Europe, Australia, New Zealand, Japan, South Korea, Kuwait, the United
Arab emirates, Israel, Singapore, and Taiwan
2.Upper middle income countries capita between $3225 and $10 065 US.
Include: Czech Republic, Greece, Hungary, Poland and most of Soviet Bloc,
Turkey, Mexico, Argentina, and South Africa
3.Low middle income countries less than $825 US. Include: Colombia,
Guatemala, Samoa, and Thailand

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North America
Largest marketplace
Most stable economy
Western Europe Germany, UK, France, and Italy
European Union (EU) 1992
Surge in technology in southeast England, Netherlands and Scandinavian countries
Eastern Europe used to be communist
Japan, China, Thailand, Malaysia, Singapore, Indonesia, South Korea, Taiwan,
Philippines, Australia, and New Zealand
Fuelled by strong entries in automobile, electronics, and banking industries
Competitive Advantage
Absolute advantage - a nations ability to produce something more cheaply of
better than any other country
Comparative advantage a nations ability to produce some products more
cheaply or better than it can others
National Competitive Advantage a country will be inclined to engage in
international trade when factor conditions, demand conditions, related and
supporting industries, and strategies/structures/rivalries are favourable
1.Labour, capital, information resources, national resources, entrepreneurship
2.Demand conditions reflect a large domestic consumer base that promotes
strong demand for innovative products
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