Lesson 1 reeview intbus.pdf

Lesson 1 2. Promotes free trade. GLOBALIZATION 3. Spurs economic development. is the process by which businesses, ideas, 4. Encourages positive trends in human and cultures Spr...

Lesson 1 2. Promotes free trade. GLOBALIZATION 3. Spurs economic development. is the process by which businesses, ideas, 4. Encourages positive trends in human and cultures Spread across the world. rights and the environment TYPES OF GLOBALIZATION 5. Promotes shared cultural understanding. Political globalization refers to Negative consequences of globalization the diplomatic negotiations between nation-states. It includes the standardization 1. Destabilizes markets of global rules around trade, criminality, and 2. Damages the environment the rule of law. 3. Lowers living standards Social globalization refers to the integration of our societies. 4. Facilitates global recessions Economic globalization refers to the ways 5. Damages cultural identities. corporations do business as multinational 6. Increases the likelihood of pandemics. organizations nowadays. Lesson 2 Technological globalization refers to the spread of technology around the world. Main Drivers of Globalization in International Business Financial globalization refers to the ease at which money can be spread around the 1. Technological Drivers world Technological changes: Advances in Cultural globalization refers to the spread Technology and mixing of cultures around the world. Changes in technology in 1980’s played Ecological globalization refers to the idea major roles in transformation of that the world needs to be considered one globalization interconnected ecosystem Fast spread of the latest technology Geographical globalization refers to the idea globally that the world is no longer seen as group of 2. POLITICAL DRIVERS distinct nations as much as it once was. Regional integration is a process in which Benefits of globalization neighboring countries agree Globalization enables countries to access to improve cooperation trough shared less expensive natural resources and lower- institutions or rules. cost labor. 3. ECONOMIC DRIVER 1. Solves economic problems. Economic liberalization Many countries have adopted policies that domestically produced goods promote free markets and or services to purchasers in 4. MARKET DRIVERS other countries. Changing consumer’s preferences -consumers are becoming more global in Entrepot is a combination of their tastes and the other two types of preferences & and businesses are responding by developing products international trade: import and services that can be sold in multiple and export markets. 5. COMPETITIVE DRIVERS ADVANTAGES OF INTERNATIONAL TRADE Increased competitors- Globalization has Increased Revenues led to increased competition Decreased Competition Lesson 3 Longer Product Lifespan International Trade Easier Cash-Flow Managemen International trade is the purchase and sale of goods and services by companies in Better Risk Management different countries. Benefiting from Currency Exchange TYPES OF INTERNATIONAL TRADE Access to Export Financing IMPORT TRADE Disposal of Surplus Goods EXPORT TRADE Enhanced Reputation ENTREPOT TRADE Opportunity to Specialize Import trade involves DISADVANTAGES OF INTERNATIONAL TRADE bringing foreign-produced Impediment in the Development of Home goods or services into the Industries country Economic Dependence Political Dependence Export trade is about selling Mis-utilization of Natural Resources Import of Harmful Goods wholesalers and sells them in small quantities to ultimate consumers. Storage of Goods Foreign exchange reserves Danger to International Peace are a nation’s holdings of other countries’ Hardships in times of War currencies that can be converted into its Lesson 4 own currency through Internal Trade vs International Trade the foreign exchange market, as well as holdings of foreign assets in The buying and selling of goods and services for profit is called Trade. government securities, such as bonds, and gold, that can be easily Internal trade is the trade of buying and selling goods and services within a turned into cash. country's borders. Domestic business involves those economic transactions that take place within the geographical boundaries of a country. International business involves those economic transactions that take place outside the geographical boundaries of a country. Types of internal trade Wholesale trade and Retail trade 1. Wholesale trade is the buying and selling of large quantities of goods and services for resale or intermediate use. They buy in bulk and sell to retailers or industrial users in small lots. 2. Retail Trade A retailer is a business that sells goods and services directly to the final consumers. The retailer typically purchases goods in large quantities from