BUSN 361International Business.pptVIP

BUSN 361International Business Dr. Kokila Doshi Professor of Economics Chapter 1Learning Objectives What is meant by globalization? Globalization of markets Globalization of production Are the tastes preferences converging? Factors affecting globalization Transportation costs Technology- Innovations information technology Tariffs Learning Objectives Is globalization good? Pros cons Relate the topics to companies, current trends or countries International Business, Charles W.L. Hill Chapter 1 What are the differences between international business and domestic business? Countries are different 2. Problems faced by a manager are more complex and wider in range 3. More countries, more rules, more competition 4. Fluctuations in currency values 5. International business operates within the limits of government regulations of international trade and investment What is globalization? Globalization refers to the shift toward a more integrated and interdependent economy. It has two components: 1. Globalization of Market 2. Globalization of Production Globalization of Markets Globalization of markets refers to the merging of distinct and separate national markets into a huge global marketplace. 1. Markets for Consumer Goods Levi’s, McDonald’s, Nike Converging tastes and preferences? 2. Market for Industrial Goods Aluminum, Computer Memory Chips, Oil 3. Market for Financial Assets Eurobonds, U.S. Treasury Bills Globalization of Production Globalization of production refers to the tendency among firms to source goods and services from locations around the globe to take advantage of national differences in costs and quality of factors of production. Example: Honda, Boeing Aircraft Boeing aircraft has 132,500 parts and 545 suppliers from countries like Italy, Japan, Singapore Even small companies are globalizing their production. Example: Swan Optical Drivers of Globalization 1. Declining Barriers to International Trade and Investment 2.