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04/19/23 2
CompetitionCompetition
Try to win Success or Failure Success means Powerful, Efficient Powerful is a comparative word Depends on Time, Occasion, Product, Place Continuous Process
04/19/23 3
International TradeInternational Trade
Globalization of Markets– Removing Trade Barriers
General Agreements on Tariffs and Trade – Established in 1947
– Membership grow from 19 to 120 Nations
– Tariff Reduction was spread in eight round
World Trade Organization – Establish in 1995 under the Uruguay Round
– Membership grow to 148 members by 2005
– General Agreement on Trade in Services
04/19/23 4
International TradeInternational Trade
Globalization of Markets– Convergence of Consumers taste & Preferences
Creating basic global market– Example Coca-Cola Soft drinks, Visa Cards, Sony Play
Station Video Games, McDonald’s hamburgers
– Removing Geographical Barriers Communication Systems Internet Development of Ports & Sea Routes
04/19/23 5
International TradeInternational Trade
Globalization of Production– Advantage in Labour Cost– Advantage in Capital Cost– Advantage in Materials Cost– Innovation– Technology & Research and Development– Human Resources– Government Policies & Incentives
04/19/23 6
International TradeInternational Trade
Globalization of Production (Examples)– IBM Think Pad X31laptop computer
Products Design in USA Case, keyboard and hard disk made in Thailand Display screen and memory in South Korea Built-in wireless card in Malaysia Micro processor and sales in USA Assembly in Mexico
04/19/23 7
International TradeInternational Trade
Benefits to Nation– Rapid Economic Development – Employment opportunities– Increase in National Wealth
Benefits to Firms– Cost Reduction– Economic Scale of Production– Improve Enterprise Value
04/19/23 8
National DifferencesNational Differences
Political Systems– Democracy– Communism – Socialism
Economic Systems– Market Economy– Command Economy– Mixed Economy
04/19/23 9
National DifferencesNational Differences
Legal Systems– Property Rights– The Protection of Intellectual Property– Product Safely and Product Liability
Economic Development– Developed Economy– Under Developed Economy– Developing Economy
04/19/23 10
National DifferencesNational Differences
Culture Difference– Social Structure– Language– Religion– Education– Political Philosophy– Economic Philosophy
04/19/23 11
Ethics in International TradeEthics in International Trade
Employments PracticesHuman RightsCorruptionsEnvironmental pollutions
04/19/23 12
International Trade TheoryInternational Trade Theory
MercantilismThe Theory of Absolute AdvantageThe Theory of Comparative AdvantageThe Heckscher-Ohlin theory of factor
endowmentsThe Product Life Cycle TheoryNew Trade theory
04/19/23 13
International Trade TheoryInternational Trade Theory
Porter’s Theory of National Competitive Advantage – Factor endowments– Domestic Demand Conditions– Relating & Supporting Industries– Firm Strategy, Structure, and Rivalry
04/19/23 14
International Trade TheoryInternational Trade Theory
Implication for Manager– Location– First Mover Advantage– Government Policy
Case Study– IBM– LOGITECH– ArcelorMittal Steel
04/19/23 15
Regional Economic IntegrationRegional Economic Integration
Political UnionEconomic UnionCommon MarketsCustom Union
Case Study European Union SAARC
04/19/23 16
The Foreign Exchange MarketThe Foreign Exchange Market
Function of Foreign Exchange MarketCurrency ConversionForeign Exchange RiskExchange Rate Determination
– Interest Rate and Inflation– Foreign Exchange Reserve– Investor Psychology
04/19/23 17
International Monetary SystemInternational Monetary System
Gold StandardFixed Exchange Rate SystemPegged Exchange Rate SystemFloating Exchange Rate SystemConvertibility
– Partial– Full
04/19/23 18
Strategy of International TradeStrategy of International Trade
International Strategy
Localization Strategy
Transnational Strategy
Global Standardization Strategy
04/19/23 19
Strategy of International TradeStrategy of International Trade
Strategy Requirement– Value Creation– Cost Reduction Pressure– Local Responsiveness– Economic Scale of Production– Leveraging Product & Competencies– Creating a Value Chain
04/19/23 20
Strategy of International TradeStrategy of International Trade
Entry Strategy– Which Foreign Markets– Timing of Entry– Scale of Entry
Modes of Entry– Exporting– Turnkey Projects, & Greenfield Venture – Licensing, Franchising, & Joint Ventures
04/19/23 21
Strategy of International TradeStrategy of International Trade
Modes of Entry– Acquisition & Mergers– Strategic Alliances
Core Competencies & Entry Mode– Technical Know-how– Management Know-how– Human Resources Advantage
04/19/23 22
Other IssuesOther Issues
Global Research & DevelopmentHuman Resources ManagementInternational Financial ManagementInternational Accounting StandardsInternational Logistics