商学导论课件Assessing Global Conditions

1、2021/3/27IB-CHAPTER421.Explain motives for engaging in international business2.Describe global opportunities3.Describe how firms conduct international business4.Explain barriers to international business5.Explain influence of foreign characteristics on a firms international business6.Explain effects

2、 of the movements in exchange rates on business performance2021/3/27IB-CHAPTER43capitalize on trade barriers 贸易壁垒,贸易障碍supplies revenues & earnings assetsimport & export quota tariffbalance of trade 贸易平衡,贸易差额/余额 trade deficit 贸易逆差,贸易赤字trade surplus 贸易顺差,贸易盈余direct foreign investment joint ven

3、ture 2021/3/27IB-CHAPTER44licensing agreement strategic alliance privatization dumping political risk appreciates 增值 depreciates 贬值hedge 套购保值,套期保值forward contract 远期合同,期货合同spot exchange rate 即期外汇,现汇2021/3/27IB-CHAPTER45Attract foreign demandCapitalize on technologyUse inexpensive resourcesDiversify

4、internationally (political and economic risk)2021/3/27IB-CHAPTER46Reasons: market share domestic intense competition demand change of consumer tastesTo keep company grow2021/3/27IB-CHAPTER47Exhibit 6.12021/3/27IB-CHAPTER48By capilalizing on its technology, a company can expand in foreign countries w

5、here technology is not so advanced.2021/3/27IB-CHAPTER49Labor costsLand costs2021/3/27IB-CHAPTER410Exhibit 6.22021/3/27IB-CHAPTER411Firms performance dependent on market demand economic conditionsOverall performance of a firm that conducts internationally business may be more stable.2021/3/27IB-CHAP

6、TER412ImportingExportingDirect foreign investment (DFI)Strategic alliancesOutsourcing2021/3/27IB-CHAPTER413MotivesConductingBarriersCharacteristicsExchange RateExportingImportingTariffQuotaInternet2021/3/27IB-CHAPTER414purchase of foreign products or services less expensive of higher qualitygovernme

7、nt trade barriers tariff quotadiscourage trade & protect specific industries from foreign competition2021/3/27IB-CHAPTER415sale of products or services to purchasers living in other countriestrade of balance = level of exports level of importsnegative balance trade deficit consumers benefit from

8、 imported products less reliance on domestic production large trade deficit transfer of jobs to some foreign countriespositive balance trade surplus2021/3/27IB-CHAPTER416Exhibit 6.4 2021/3/27IB-CHAPTER4172021/3/27IB-CHAPTER418 China total imports and exports information2021/3/27IB-CHAPTER419feasible

9、 reduce transportation costsavoid trade barriersprovide advanced technology & enjoy incentives like free use of landreduce labor costscost/benefit analysisLower CostsTechnologyBarriersTransportationa means of acquiring or building subsidiaries in one or more foreign countries2021/3/27IB-CHAPTER4

10、20Foreign firms expanded into the U.S. by: New subsidiaries. Acquiring U.S. firms.U.S. industries are susceptible to foreign competition labor costs. quality2021/3/27IB-CHAPTER421uses workers from outside the company to do a jobto reduce expenses2021/3/27IB-CHAPTER422a business agreement between fir

11、ms whereby resources are shared to pursue mutual interestsOther types: Joint venture: an agreement between two firms about a specific project International licensing agreement: a type of alliance in which a firm allows a foreign company (licensee) to produce its products according to specific instru

12、ctions2021/3/27IB-CHAPTER423NAFTAGATT - WTOLatin AmericaEuropean UnionReduction in Barriers2021/3/27IB-CHAPTER424ProtectionPunishment2021/3/27IB-CHAPTER425EnvironmentLaborBriberyTaxation commonly occur among countries, and will always exist. Some common causes:2021/3/27IB-CHAPTER4261)Culture2)Econom

13、ic systems Capitalism Communism Socialism Privatization3)Economic conditions economic growth4)Exchange rates 5)Political risk & regulations2021/3/27IB-CHAPTER427EconomicGrowthSensitivity2021/3/27IB-CHAPTER428risk that a countrys political actions may adversely affect a business dometic political

14、 crisis interstate political problems corruption regulatory climate Possible consequences: shut down (temporarily) decline in demand more costs taken over without compensation imposed higher tax rates funds are prevented from being sent2021/3/27IB-CHAPTER429 Insert Exhibit 4.6 from page 1352021/3/27

15、IB-CHAPTER430Exhibit 6.82021/3/27IB-CHAPTER431 StrongerAppreciateWeakerDepreciate2021/3/27IB-CHAPTER4322021/3/27IB-CHAPTER433action taken to protect a firm against exchange rate movementsForward Contract: provides that an exchange of currency will occur at a specified exchange rate a a future point

16、in time.Forward Rate: the exchange rate that a bank will be willing to offer at a future point in time. Spot exchange rate: the exchange rate quoted for immediate transactions.Hedging future payments & future receivables in foreign currenciesReduces risk because of set exchange ratePrevents exch

17、ange rate fluctuations2021/3/27IB-CHAPTER434Time Spot RateForward Rate2021/3/27IB-CHAPTER435If a U.S. firm expects to receive 1,000,000 in 90 days, it can calls a commercial bank and negotiate a forward contract in which they agree to a 90-day exchange rate at $1.80. In this way, the firm will lock in the sales of 1,000,000 in 90 days for $1.80 per pound, or $1,800,000 for the 1,000,000, regardless of the spot exchange rate that occurs on that day.If spot rate is $1.70? or $1.90?2021/3/27IB-CHAPTER436Exhibit 6.92021/3/27IB-CHAPTER4371.Explain motives for engaging in international busines