Introduction to International Business and Globalization 2023 PDF

+-----------------+-----------------+-----------------+-----------------+ | | New Era |  | | | | | | | |...

+-----------------+-----------------+-----------------+-----------------+ | | New Era |  | | | | | | | | | No. 9 Central | | | | | Avenue Barangay | | | | | New Era, Quezon | | | | | City 1107 | | | | | | | | | | Email Address: | | | | | [[cba\@neu.edu. | | | | | ph] | | | | | ](mailto:cba@ne | | | | | u.edu.ph) | | | | | Phone Number: | | | | | 02-981-4221 | | | +-----------------+-----------------+-----------------+-----------------+ | | **COLLEGE OF | | | | | BUSINESS | | | | | ADMINISTRATION* | | | | | * | | | +-----------------+-----------------+-----------------+-----------------+ | **Department of | | | | | Human Resource | | | | | Development and | | | | | Management** | | | | +-----------------+-----------------+-----------------+-----------------+ | **Course | Module No. | **1** | Title | | Title** | | | | +-----------------+-----------------+-----------------+-----------------+ | **International | | | **Introduction | | Business and | | | to | | Trade** | | | International | | | | | Business and | | | | | Globalization** | +-----------------+-----------------+-----------------+-----------------+ | | **Module | **Dr. Bernie E. | | | | Writer** | Balmeo** | | +-----------------+-----------------+-----------------+-----------------+ | Timeframe | Two Weeks | | | +-----------------+-----------------+-----------------+-----------------+ | How to Complete | 1. Complete | | | | this Module? | the reading | | | | | assignment | | | | | | | | | | 2. View online | | | | | resources | | | | | | | | | | 3. Participate | | | | | in this | | | | | week's | | | | | discussion | | | | | | | | | | 4. Complete | | | | | the Module | | | | | Problem Set | | | | | | | | | | 5. Answer | | | | | review and | | | | | discussion | | | | | questions | | | | | | | | | | 6. Accomplish | | | | | Experientia | | | | | l | | | | | exercises | | | +-----------------+-----------------+-----------------+-----------------+ | **Teaching | | | | | Strategies** | | | | +-----------------+-----------------+-----------------+-----------------+ | | In today's | | | | | interconnected | | | | | world, | | | | | businesses are | | | | | no longer | | | | | confined to | | | | | national | | | | | borders. The | | | | | module | | | | | "Introduction | | | | | to | | | | | International | | | | | Business and | | | | | Globalization" | | | | | provides a | | | | | comprehensive | | | | | overview of the | | | | | dynamic | | | | | landscape of | | | | | international | | | | | business and | | | | | the forces | | | | | driving | | | | | globalization. | | | | | This module | | | | | delves into the | | | | | complexities | | | | | and | | | | | opportunities | | | | | that arise when | | | | | organization | | | | | expand their | | | | | operations | | | | | beyond their | | | | | domestic | | | | | markets. | | | | | | | | | | The module | | | | | begins by | | | | | defining the | | | | | fundamental | | | | | concepts of | | | | | international | | | | | business and | | | | | globalization, | | | | | highlighting | | | | | the crucial | | | | | role they play | | | | | in shaping the | | | | | global economy. | | | | | It explores how | | | | | technological | | | | | advancements, | | | | | communication | | | | | networks, and | | | | | transportation | | | | | systems have | | | | | facilitated the | | | | | movement of | | | | | goods, | | | | | services, | | | | | capital, and | | | | | information | | | | | across | | | | | countries and | | | | | continents. | | | +-----------------+-----------------+-----------------+-----------------+ | | ***Upon | | | | | completion of | | | | | this module, | | | | | students will | | | | | be able to:*** | | | | | | | | | | 1. 2. 3. 4. | | | | | 5. 6. | | | +-----------------+-----------------+-----------------+-----------------+ | | **Definition | | | | | and Scope of | | | | | International | | | | | Business** | | | | | | | | | | ***Definition:* | | | | | ** | | | | | | | | | | International | | | | | Business refers | | | | | to the | | | | | commercial | | | | | activities, | | | | | transactions, | | | | | and | | | | | interactions | | | | | that take place | | | | | between | | | | | individuals, | | | | | organizations, | | | | | and governments | | | | | from different | | | | | countries. It | | | | | involves the | | | | | exchange of | | | | | goods, | | | | | services, | | | | | information, | | | | | and capital | | | | | across | | | | | international | | | | | borders. | | | | | International | | | | | business | | | | | encompasses a | | | | | wide range of | | | | | activities, | | | | | including | | | | | trade, | | | | | investment, | | | | | finance, | | | | | marketing, and | | | | | management, all | | | | | conducted on a | | | | | global scale. | | | | | | | | | | ***Scope:*** | | | | | | | | | | The scope of | | | | | international | | | | | business is | | | | | broad and | | | | | multidimensiona | | | | | l, | | | | | reflecting the | | | | | complexity of | | | | | interactions | | | | | between various | | | | | economic, | | | | | social, | | | | | cultural, and | | | | | political | | | | | factors. It | | | | | encompasses | | | | | several key | | | | | components: | | | | | | | | | | 1. **Cross-Bor | | | | | der | | | | | Trade:** | | | | | This | | | | | involves | | | | | the import | | | | | and export | | | | | of goods | | | | | and | | | | | services | | | | | across | | | | | national | | | | | boundaries. | | | | | Companies | | | | | engage in | | | | | trade to | | | | | access | | | | | resources, | | | | | products, | | | | | and | | | | | services | | | | | not | | | | | available | | | | | domesticall | | | | | y, | | | | | taking | | | | | advantage | | | | | of cost | | | | | differences | | | | | , | | | | | specialized | | | | | skills, and | | | | | market | | | | | demand. | | | | | | | | | | 2. **Foreign | | | | | Direct | | | | | Investment | | | | | (FDI):** | | | | | FDI | | | | | involves a | | | | | company | | | | | establishin | | | | | g | | | | | or | | | | | acquiring | | | | | business | | | | | operations | | | | | in a | | | | | foreign | | | | | country. It | | | | | can include | | | | | investments | | | | | in | | | | | manufacturi | | | | | ng | | | | | facilities, | | | | | subsidiarie | | | | | s, | | | | | joint | | | | | ventures, | | | | | and | | | | | acquisition | | | | | s. | | | | | FDI allows | | | | | companies | | | | | to tap into | | | | | new | | | | | markets, | | | | | gain access | | | | | to | | | | | resources, | | | | | and | | | | | diversify | | | | | their | | | | | operations. | | | | | | | | | | 3. **Global | | | | | Supply | | | | | Chains:** | | | | | Many | | | | | products | | | | | are now | | | | | manufacture | | | | | d | | | | | using | | | | | components | | | | | and | | | | | materials | | | | | from | | | | | different | | | | | countries, | | | | | leading to | | | | | intricate | | | | | global | | | | | supply | | | | | chains. | | | | | Companies | | | | | source raw | | | | | materials, | | | | | components, | | | | | and | | | | | services | | | | | from | | | | | various | | | | | locations | | | | | to optimize | | | | | costs, | | | | | quality, | | | | | and | | | | | efficiency. | | | | | | | | | | 4. **Internati | | | | | onal | | | | | Marketing:* | | | | | * | | | | | Companies | | | | | tailor | | | | | their | | | | | marketing | | | | | strategies | | | | | to | | | | | accommodate | | | | | diverse | | | | | cultural, | | | | | economic, | | | | | and | | | | | regulatory | | | | | differences | | | | | in various | | | | | markets. | | | | | This | | | | | includes | | | | | product | | | | | adaptation, | | | | | pricing | | | | | strategies, | | | | | and | | | | | promotional | | | | | efforts | | | | | that | | | | | resonate | | | | | with local | | | | | customers. | | | | | | | | | | 5. **Internati | | | | | onal | | | | | Finance:** | | | | | Internation | | | | | al | | | | | business | | | | | involves | | | | | managing | | | | | financial | | | | | transaction | | | | | s | | | | | across | | | | | currencies | | | | | and | | | | | countries. | | | | | Companies | | | | | deal with | | | | | foreign | | | | | exchange | | | | | risk, | | | | | internation | | | | | al | | | | | payment | | | | | systems, | | | | | and capital | | | | | flows in a | | | | | global | | | | | financial | | | | | landscape. | | | | | | | | | | 6. **Cross-Cul | | | | | tural | | | | | Management: | | | | | ** | | | | | Operating | | | | | in | | | | | different | | | | | cultural | | | | | contexts | | | | | necessitate | | | | | s | | | | | understandi | | | | | ng | | | | | and | | | | | adapting to | | | | | cultural | | | | | nuances. | | | | | Effective | | | | | cross-cultu | | | | | ral | | | | | management | | | | | involves | | | | | communicati | | | | | on, | | | | | negotiation | | | | | , | | | | | and | | | | | collaborati | | | | | on | | | | | that | | | | | respect and | | | | | leverage | | | | | cultural | | | | | diversity. | | | | | | | | | | 7. **Global | | | | | Business | | | | | Strategies: | | | | | ** | | | | | Companies | | | | | develop | | | | | strategies | | | | | to expand | | | | | their | | | | | operations | | | | | and compete | | | | | effectively | | | | | on a global | | | | | scale. | | | | | These | | | | | strategies | | | | | might | | | | | involve | | | | | selecting | | | | | suitable | | | | | markets, | | | | | entering | | | | | through | | | | | appropriate | | | | | modes, and | | | | | adapting to | | | | | local | | | | | conditions. | | | | | | | | | | 8. **Internati | | | | | onal | | | | | Trade | | | | | Regulations | | | | | :** | | | | | Internation | | | | | al | | | | | business | | | | | operates | | | | | within a | | | | | framework | | | | | of trade | | | | | agreements, | | | | | tariffs, | | | | | trade | | | | | barriers, | | | | | and | | | | | regulatory | | | | | standards. | | | | | Organizatio | | | | | ns | | | | | need to | | | | | navigate | | | | | these legal | | | | | and | | | | | regulatory | | | | | environment | | | | | s. | | | | | | | | | | 9. **Global | | | | | Economic | | | | | and | | | | | Political | | | | | Influences: | | | | | ** | | | | | Economic | | | | | and | | | | | political | | | | | events in | | | | | one country | | | | | can have | | | | | ripple | | | | | effects | | | | | across the | | | | | globe. | | | | | Internation | | | | | al | | | | | businesses | | | | | must | | | | | anticipate | | | | | and respond | | | | | to | | | | | geopolitica | | | | | l | | | | | shifts, | | | | | economic | | | | | trends, and | | | | | regulatory | | | | | changes. | | | | | | | | | | 10. **Sustainab | | | | | ility | | | | | and | | | | | Corporate | | | | | Social | | | | | Responsibil | | | | | ity:** | | | | | Internation | | | | | al | | | | | businesses | | | | | face | | | | | increasing | | | | | pressure to | | | | | operate | | | | | sustainably | | | | | and | | | | | responsibly | | | | |. | | | | | This | | | | | includes | | | | | addressing | | | | | environment | | | | | al | | | | | concerns, | | | | | ethical | | | | | considerati | | | | | ons, | | | | | and social | | | | | impact in | | | | | diverse | | | | | global | | | | | contexts. | | | | | | | | | | In essence, the | | | | | scope of | | | | | international | | | | | business | | | | | extends beyond | | | | | mere | | | | | transactions | | | | | and encompasses | | | | | a complex web | | | | | of interrelated | | | | | activities that | | | | | shape the | | | | | global economic | | | | | landscape. As | | | | | the world | | | | | becomes more | | | | | interconnected, | | | | | the | | | | | understanding | | | | | of | | | | | international | | | | | business | | | | | becomes | | | | | essential for | | | | | companies, | | | | | policymakers, | | | | | and individuals | | | | | looking to | | | | | thrive in the | | | | | global | | | | | marketplace. | | | | | | | | | | **Drivers and | | | | | Benefits of | | | | | Globalization** | | | | | | | | | | Globalization | | | | | is propelled by | | | | | a combination | | | | | of economic, | | | | | technological, | | | | | political, and | | | | | cultural forces | | | | | that transcend | | | | | national | | | | | borders. Some | | | | | key drivers | | | | | include: | | | | | | | | | | 1. **Technolog | | | | | ical | | | | | Advancement | | | | | s:** | | | | | The rapid | | | | | advancement | | | | | of | | | | | technology, | | | | | particularl | | | | | y | | | | | in | | | | | communicati | | | | | on | | | | | and | | | | | transportat | | | | | ion, | | | | | has | | | | | significant | | | | | ly | | | | | reduced the | | | | | barriers of | | | | | distance | | | | | and time. | | | | | The | | | | | internet, | | | | | mobile | | | | | communicati | | | | | on, | | | | | and | | | | | efficient | | | | | transportat | | | | | ion | | | | | networks | | | | | have | | | | | enabled | | | | | instant | | | | | global | | | | | connectivit | | | | | y. | | | | | | | | | | 2. **Trade | | | | | Liberalizat | | | | | ion:** | | | | | Trade | | | | | agreements, | | | | | reduced | | | | | tariffs, | | | | | and removal | | | | | of trade | | | | | barriers | | | | | foster | | | | | greater | | | | | movement of | | | | | goods and | | | | | services | | | | | across | | | | | borders. | | | | | Organizatio | | | | | ns | | | | | can access | | | | | larger | | | | | markets and | | | | | diverse | | | | | resources, | | | | | leading to | | | | | increased | | | | | trade | | | | | flows. | | | | | | | | | | 3. **Foreign | | | | | Direct | | | | | Investment | | | | | (FDI):** | | | | | The ease of | | | | | investing | | | | | and | | | | | establishin | | | | | g | | | | | operations | | | | | in foreign | | | | | countries | | | | | encourages | | | | | companies | | | | | to seek | | | | | growth | | | | | opportuniti | | | | | es | | | | | beyond | | | | | their | | | | | domestic | | | | | markets. | | | | | FDI helps | | | | | transfer | | | | | capital, | | | | | expertise, | | | | | and | | | | | technology | | | | | across | | | | | borders. | | | | | | | | | | 4. **Global | | | | | Supply | | | | | Chains:** | | | | | Companies | | | | | source | | | | | components, | | | | | materials, | | | | | and | | | | | services | | | | | from | | | | | different | | | | | countries | | | | | to optimize | | | | | costs and | | | | | quality. | | | | | This has | | | | | led to the | | | | | development | | | | | of complex | | | | | global | | | | | supply | | | | | chains | | | | | where | | | | | production | | | | | processes | | | | | span | | | | | multiple | | | | | nations. | | | | | | | | | | 5. **Market | | | | | Liberalizat | | | | | ion:** | | | | | Openness to | | | | | foreign | | | | | investment | | | | | and | | | | | competition | | | | | has spurred | | | | | economic | | | | | growth in | | | | | many | | | | | countries. | | | | | Market | | | | | liberalizat | | | | | ion | | | | | encourages | | | | | innovation, | | | | | efficiency, | | | | | and | | | | | consumer | | | | | choice. | | | | | | | | | | 6. **Cultural | | | | | Exchange | | | | | and | | | | | Information | | | | | Flow:** | | | | | Improved | | | | | communicati | | | | | on | | | | | and media | | | | | channels | | | | | enable the | | | | | rapid | | | | | disseminati | | | | | on | | | | | of cultural | | | | | influences, | | | | | ideas, and | | | | | information | | | | |. | | | | | This | | | | | promotes | | | | | cross-cultu | | | | | ral | | | | | understandi | | | | | ng | | | | | and | | | | | encourages | | | | | global | | | | | trends. | | | | | | | | | | **Benefits of | | | | | Globalization:* | | | | | * | | | | | | | | | | Globalization | | | | | has brought | | | | | about a range | | | | | of benefits | | | | | that impact | | | | | economies, | | | | | businesses, | | | | | individuals, | | | | | and societies: | | | | | | | | | | **Economic | | | | | Growth:** | | | | | Increased | | | | | international | | | | | trade and | | | | | investment | | | | | stimulate | | | | | economic growth | | | | | by opening new | | | | | markets, | | | | | boosting | | | | | production, and | | | | | creating jobs. | | | | | Developing | | | | | countries often | | | | | experience | | | | | increased | | | | | income and | | | | | improved | | | | | standards of | | | | | living through | | | | | increased | | | | | access to | | | | | global markets. | | | | | | | | | | Efficiency and | | | | | Innovation: | | | | | Globalization | | | | | encourages | | | | | companies to | | | | | specialize in | | | | | what they do | | | | | best and access | | | | | resources more | | | | | efficiently. It | | | | | promotes | | | | | competition, | | | | | leading to | | | | | innovation, | | | | | better | | | | | products, and | | | | | lower costs. | | | | | | | | | | **Access to | | | | | Resources:** | | | | | Globalization | | | | | allows | | | | | companies to | | | | | access | | | | | resources (raw | | | | | materials, | | | | | labor, | | | | | technology) | | | | | that may not be | | | | | available or | | | | | affordable | | | | | domestically. | | | | | This leads to | | | | | resource | | | | | optimization | | | | | and higher | | | | | productivity. | | | | | | | | | | **Cultural | | | | | Exchange:** | | | | | Greater | | | | | interaction | | | | | between | | | | | cultures | | | | | promotes | | | | | understanding, | | | | | tolerance, and | | | | | appreciation of | | | | | diverse | | | | | perspectives. | | | | | People gain | | | | | exposure to | | | | | different | | | | | languages, | | | | | traditions, and | | | | | lifestyles. | | | | | | | | | | **Global | | | | | Collaboration:* | | | | | * | | | | | Collaborative | | | | | projects and | | | | | research across | | | | | borders have | | | | | led to | | | | | advancements in | | | | | science, | | | | | technology, | | | | | medicine, and | | | | | other fields. | | | | | Global networks | | | | | facilitate the | | | | | sharing of | | | | | knowledge and | | | | | expertise. | | | | | | | | | | **Reduced | | | | | Poverty:** | | | | | Globalization | | | | | can contribute | | | | | to poverty | | | | | reduction by | | | | | creating jobs, | | | | | increasing | | | | | incomes, and | | | | | providing | | | | | opportunities | | | | | for education | | | | | and skill | | | | | development in | | | | | developing | | | | | countries. | | | | | | | | | | **Consumer | | | | | Choices:** | | | | | Consumers | | | | | benefit from a | | | | | wider variety | | | | | of goods and | | | | | services at | | | | | competitive | | | | | prices due to | | | | | global | | | | | competition and | | | | | access to | | | | | products from | | | | | around the | | | | | world. | | | | | | | | | | **Environmental | | | | | Awareness:** | | | | | Global | | | | | environmental | | | | | challenges | | | | | require global | | | | | solutions. | | | | | International | | | | | cooperation | | | | | facilitated by | | | | | globalization | | | | | is crucial for | | | | | addressing | | | | | issues such as | | | | | climate change | | | | | and resource | | | | | depletion. | | | | | | | | | | **Political | | | | | Cooperation:** | | | | | Economic | | | | | interdependence | | | | | encourages | | | | | political | | | | | stability and | | | | | cooperation | | | | | between | | | | | nations, as | | | | | conflicts can | | | | | disrupt | | | | | economic ties. | | | | | | | | | | **Human Rights | | | | | Awareness:** | | | | | Globalization | | | | | has heightened | | | | | awareness of | | | | | human rights | | | | | issues, leading | | | | | to | | | | | international | | | | | pressure for | | | | | improved | | | | | working | | | | | conditions, | | | | | labor rights, | | | | | and social | | | | | justice. | | | | | | | | | | In summary, | | | | | globalization | | | | | has transformed | | | | | the world into | | | | | a more | | | | | interconnected | | | | | and | | | | | interdependent | | | | | place, driven | | | | | by | | | | | technological | | | | | advancements | | | | | and economic | | | | | imperatives. | | | | | While it brings | | | | | about | | | | | challenges and | | | | | controversies, | | | | | its benefits in | | | | | terms of | | | | | economic | | | | | growth, | | | | | innovation, | | | | | cultural | | | | | exchange, and | | | | | improved | | | | | quality of life | | | | | are | | | | | substantial. | | | | | The balance | | | | | between these | | | | | benefits and | | | | | potential | | | | | downsides | | | | | remains a topic | | | | | of ongoing | | | | | discussion and | | | | | policymaking. | | | | | | | | | | **Cultural, | | | | | Political, and | | | | | Economic | | | | | Factors | | | | | Influencing | | | | | Global Trade** | | | | | | | | | | Global trade is | | | | | significantly | | | | | influenced by a | | | | | complex | | | | | interplay of | | | | | cultural, | | | | | political, and | | | | | economic | | | | | factors. These | | | | | factors shape | | | | | trade patterns, | | | | | policies, and | | | | | relationships | | | | | between | | | | | countries. | | | | | Understanding | | | | | their impact is | | | | | essential for | | | | | businesses, | | | | | policymakers, | | | | | and individuals | | | | | engaging in | | | | | international | | | | | trade. Here\'s | | | | | an overview of | | | | | each factor: | | | | | | | | | | **Cultural | | | | | Factors:** | | | | | | | | | | 1. **Cultural | | | | | Norms and | | | | | Preferences | | | | | :** | | | | | Consumer | | | | | preferences | | | | | , | | | | | cultural | | | | | norms, and | | | | | tastes | | | | | differ | | | | | across | | | | | countries. | | | | | Companies | | | | | must adapt | | | | | products, | | | | | marketing | | | | | strategies, | | | | | and | | | | | communicati | | | | | on | | | | | to resonate | | | | | with local | | | | | cultures. | | | | | | | | | | 2. **Language | | | | | and | | | | | Communicati | | | | | on:** | | | | | Effective | | | | | communicati | | | | | on | | | | | is crucial | | | | | in | | | | | internation | | | | | al | | | | | trade. | | | | | Language | | | | | barriers | | | | | and | | | | | differences | | | | | in | | | | | communicati | | | | | on | | | | | styles can | | | | | impact | | | | | negotiation | | | | | , | | | | | advertising | | | | | , | | | | | and | | | | | customer | | | | | interaction | | | | |. | | | | | | | | | | 3. **Social | | | | | Values:** | | | | | Trade can | | | | | be | | | | | influenced | | | | | by societal | | | | | values such | | | | | as ethical | | | | | considerati | | | | | ons, | | | | | social | | | | | responsibil | | | | | ity, | | | | | and | | | | | attitudes | | | | | toward | | | | | certain | | | | | products. | | | | | Companies | | | | | need to | | | | | align their | | | | | offerings | | | | | with local | | | | | values. | | | | | | | | | | 4. **Religion | | | | | and | | | | | Customs:** | | | | | Religious | | | | | beliefs and | | | | | customs can | | | | | affect | | | | | consumption | | | | | patterns | | | | | and trade | | | | | regulations | | | | |. | | | | | Some | | | | | products | | | | | might be | | | | | restricted | | | | | or favored | | | | | based on | | | | | religious | | | | | practices. | | | | | | | | | | 5. **Cultural | | | | | Etiquette:* | | | | | * | | | | | Understandi | | | | | ng | | | | | and | | | | | respecting | | | | | cultural | | | | | etiquette | | | | | is vital | | | | | for | | | | | successful | | | | | cross-borde | | | | | r | | | | | negotiation | | | | | s | | | | | and | | | | | business | | | | | relationshi | | | | | ps. | | | | | Etiquette | | | | | mishaps can | | | | | lead to | | | | | misundersta | | | | | ndings. | | | | | | | | | | **Political | | | | | Factors:** | | | | | | | | | | 1. **Trade | | | | | Agreements: | | | | | ** | | | | | Bilateral | | | | | and | | | | | multilatera | | | | | l | | | | | trade | | | | | agreements | | | | | impact | | | | | tariffs, | | | | | quotas, and | | | | | trade | | | | | regulations | | | | |. | | | | | Agreements | | | | | like free | | | | | trade areas | | | | | and customs | | | | | unions | | | | | influence | | | | | trade | | | | | flows. | | | | | | | | | | 2. **Trade | | | | | Barriers:** | | | | | Governments | | | | | can impose | | | | | trade | | | | | barriers | | | | | like | | | | | tariffs, | | | | | import | | | | | quotas, and | | | | | embargoes | | | | | to protect | | | | | domestic | | | | | industries, | | | | | influence | | | | | trade | | | | | balance, or | | | | | address | | | | | political | | | | | concerns. | | | | | | | | | | 3. **Political | | | | | Stability:* | | | | | * | | | | | Political | | | | | instability | | | | | and | | | | | conflicts | | | | | can disrupt | | | | | trade | | | | | relationshi | | | | | ps, | | | | | supply | | | | | chains, and | | | | | investment. | | | | | Stable | | | | | political | | | | | environment | | | | | s | | | | | are | | | | | conducive | | | | | to | | | | | sustained | | | | | trade | | | | | growth. | | | | | | | | | | 4. **Trade | | | | | Policies:** | | | | | Governments | | | | | formulate | | | | | trade | | | | | policies to | | | | | promote | | | | | exports, | | | | | attract | | | | | foreign | | | | | investment, | | | | | and ensure | | | | | national | | | | | security. | | | | | These | | | | | policies | | | | | influence | | | | | trade | | | | | strategies | | | | | and | | | | | outcomes. | | | | | | | | | | 5. **Diplomacy | | | | | and | | | | | Geopolitics | | | | | :** | | | | | Trade can | | | | | be used as | | | | | a | | | | | diplomatic | | | | | tool, | | | | | impacting | | | | | relationshi | | | | | ps | | | | | between | | | | | countries. | | | | | Geopolitica | | | | | l | | | | | tensions | | | | | and | | | | | alliances | | | | | can affect | | | | | trade | | | | | partnership | | | | | s. | | | | | | | | | | **Economic | | | | | Factors:** | | | | | | | | | | 1. **Economic | | | | | Development | | | | | :** | | | | | The level | | | | | of economic | | | | | development | | | | | affects a | | | | | country\'s | | | | | trade | | | | | capacity. | | | | | Developed | | | | | nations | | | | | often have | | | | | higher | | | | | purchasing | | | | | power and | | | | | export | | | | | technology- | | | | | intensive | | | | | goods. | | | | | | | | | | 2. **Currency | | | | | Exchange | | | | | Rates:** | | | | | Exchange | | | | | rates | | | | | impact the | | | | | competitive | | | | | ness | | | | | of exports | | | | | and | | | | | imports. | | | | | Fluctuation | | | | | s | | | | | can affect | | | | | profitabili | | | | | ty | | | | | and pricing | | | | | strategies. | | | | | | | | | | 3. **Market | | | | | Size and | | | | | Demand:** | | | | | Larger | | | | | markets | | | | | offer | | | | | greater | | | | | potential | | | | | for sales | | | | | and growth. | | | | | Demand for | | | | | goods and | | | | | services is | | | | | a key |