Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
Week 02 Competing In A Global Market
1. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Week 2
Content :
Competing
The rise of
international business
in a global market
International
business management
Barrier to
international trade
Jakarta, September 2008
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
2. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
What is globalization ?
Intro …
Process by which
the world economy is becoming
a single interdependent system
(Griffin, 2004)
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
3. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Which one do you like ?
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
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Which one you recognize more ?
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
5. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Is this your favorite spot ?
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
6. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Source:
www.irwanzulkefli.blogspot.com Is this your favorite spot ?
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
7. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Intro …
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
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What are exports and imports ?
Imports are products made or grown abroad but
Intro … sold domestically;
while exports are products made or grown domestically but
shipped and sold abroad
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
9. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The Contemporary Global Economy
Several forces have combined to spark & sustain globalization:
Intro …
1. Government and businesses are aware of benefits of
globalization to businesses and shareholders.
2. New technologies make international travel, communication
and commerce much faster and cheaper.
3. Competitive pressure sometimes force a firm to expand into
foreign markets to keep up with competitors.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
10. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Trade Agreements
General Agreements on Tariffs and Trade (GATT)
Content : North American Free Trade Agreement (NAFTA)
European Union (EU)
The rise of World Trade Organization (WTO)
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
11. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The North American Marketplace and The Nations of NAFTA
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
12. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The Major World Marketplace
Per capita income is the average income per person.
Content : 1. High-income countries: those with per capita income greater
than $ 9,386.
The rise of 2. Middle-income countries: those with per capita income of
international business less than $ 9,386 but more than $ 765.
3. Low-income countries (developing countries): those with per
capita income of less than $ 765.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
13. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
The Major World Marketplace
NORTH AMERICA
World’s largest marketplace and most
stable economy.
Content : U.S. dominates.
EUROPE
The rise of Western Europe is a mature but
international business fragmented marketplace.
Eastern Europe has gained importance as a
marketplace and a producer.
PASIFIC ASIA
Nations of the ASEAN are an important
force in the world economy and a major
source of competition for north American
firms.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
14. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Europe and The Nations of the European Union
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
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The Nations of ASEAN
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
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Forms of Competitive Advantage
• Absolute advantage is the ability to
Content : produce something more efficiently
than any other country can.
• Comparative advantage is the ability to
The rise of
international business produce some product more efficiently
or better than other products.
• National competitive advantage is an
international competitive advantage
stemming from a combination of factor
conditions; demand conditions; related
and supporting industries; and firm
strategies, structures and rivalries.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
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Absolute Advantage: Saudi Oil
Content :
The rise of
international business
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Absolute Advantage: Brazilian Coffee Beans
Content :
The rise of
international business
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Absolute Advantage: Canadian Timber
Content :
The rise of
international business
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Absolute Advantage: Mexico Tequila
Content :
The rise of
international business
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Comparative Advantage: United States Movies
Content :
The rise of
international business
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Bollywood… ???
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
23. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Comparative Advantage: United States Computer
Content :
The rise of
international business
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Comparative Advantage: United States Farming
Content :
The rise of
international business
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Comparative Advantage: Guatemalan Textile
Content :
The rise of
international business
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Comparative Advantage: South Korea Electronic
Content :
The rise of
international business
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National Competitive Advantage: French Wine
Content :
The rise of
international business
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National Competitive Advantage: United States Fast Food
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
29. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
National Competitive Advantage: German High-End Car
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
30. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Attributes of National Competitive Advantage
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
31. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Import - Export Balances
Balance of trade is the economic value of all products a country
imports minus the economic value of all products it exports.
Content :
Trade deficit occurs when a country’s imports exceed its exports (a
negative balance of trade), while a trade surplus occurs when
The rise of exports exceed imports (a positive balance of trade)
international business
Balance of payments
is the flow of money into or out of a country.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
32. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Exchange Rates
Exchange rate is the rate at which the currency of one nation can be
exchanged for that of another.
Content :
1. Fixed exchange rates: the value of any country’s currency
relative to that of another remain constant.
The rise of
international business 2. Floating exchanger rates: the value of one country’s
currency relative to that of another varies with market
conditions.
3. Euro: a common currency shared among most of the
members of the EU
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
33. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Exchange Rates and Competition
Content : When a country’s currency rises becomes
stronger companies based there find it
harder to export products to foreign
The rise of markets and easier for foreign companies
international business to enter local markets.
When the value of currency declines
becomes weaker companies based there
find it easier to export to foreign markets
and harder for foreign companies to enter
local markets.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
34. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Going International
Content :
The rise of
international business
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
35. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Levels of Involvement
1. Exporters : make product in one country to distribute and sell in
others.
Content : Importers : buy products in foreign markets and import them for
resale at home.
2. International firms : conduct a significant portion of their
business abroad.
International
business management 3. Multinational firms : design, produce and market products in
many nations.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
36. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
International Organization Structures
• Independent agents are foreign individuals or organizations
that represent an exporter in foreign markets.
Content :
• Licensing arrangements are arrangements in which firms
choose foreign individuals or organizations to manufacture or
market their products in another country.
• Branch offices are foreign offices set up by an international or
International multinational firm
business management
• Strategic alliance (also called Joint Venture) is an arrangement
in which a company finds a foreign partner to contribute
approximately half of the resources needed to establish and
operate a new business in the partner’s country.
• Foreign Direct Investment (FDI) involves buying or establishing
tangible assets in another country.
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
37. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Content :
International
business management
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
38. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Content :
International
business management
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
39. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Content :
International
business management
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
40. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
1. Social and Cultural Differences
Firms planning to conduct business abroad must understand the
social and cultural differences between host country and home
Content : country.
Differences in:
* Language
* Tastes and preferences
* Sense of value
* Shopping habits
Barrier to
international trade
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
41. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
2. Economic Differences
Economic differences can be pronounced.
Content : • A firm must know how much the
government is involved in a given industry
operating within a mixed economy.
• The impact of economic differences can be
great in planned economies.
Barrier to
international trade
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
42. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
3. Legal and Political Differences
Government can affect international business
in many ways. They can :
Content :
• Set condition for doing business within
their borders and even prohibit doing
business together.
• Control the flow of capital and use tax
legislation to discourage or encourage
activity in a given industry.
• Confiscate the property of foreign-
owned companies.
Barrier to
international trade
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
43. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Quotas, Tariffs, and Subsidies
• Quotas is a restriction on the number of
Content : products of a certain type than can be
imported into a country.
• Tariff is a tax levied on imported products.
• Subsidy is a government payment to help
a domestic business compete with foreign
firms.
Barrier to
international trade
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id
44. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
What is protectionism ?
Practice of protecting domestic business
Content : against foreign competition.
Barrier to
international trade
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45. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
4. Legal and Content Laws
Local content laws require that products sold in a particular
country be at least partly made there.
Content :
Firms seeking to do business in a country must either invest
there directly or take on a domestic partner.
Profits from doing business in a foreign country stay there rather
than flowing to another nation.
Barrier to
international trade
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46. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
5. Business Practice Laws
Business practice laws are laws or regulations governing
business practices in given countries.
Content :
• Cartels are associations of producers that control supply
and prices.
• Dumping is the practice of selling a product abroad for
less than the cost of production.
Barrier to
international trade
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47. Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id
Content :
The rise of
international business thank you
International
business management
Barrier to
international trade
Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: anna@unimedia.ac.id