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intern
ation
al bu
siness, 5
th edition
chapter 2global marketplaces and business centers
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Chapter Objectives 1
• Evaluate the impact of the political and economic characteristics of the world’s various marketplaces on business
• Appreciate the uses of national income data in making business decisions
• Discuss North America as a major marketplace and business center in the world economy
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Chapter Objectives 2
• Describe Western Europe as a major marketplace and business center in the world economy
• Discuss the problems facing the economies of the former communist countries of Eastern and Central Europe
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Chapter Objectives 3
• Discuss Asia as a major marketplace and business center in the world economy
• Assess the development challenges facing African, Middle Eastern, and South American countries
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Vital Information in International Business
Basic geographyMarket
characteristics
Culture Politics
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World Economic Activity
• The Triad
– Japan
– European Union
– United States
• The Quad
– Triad
– Canada
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Figure 2.1a Shares of World’s GDP, 1970
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Figure 2.1b Shares of World’s GDP, 2004
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Marketplaces of North America
• United States
• Canada
• Mexico
• Greenland
• Central America
• Caribbean islands
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Map 2.1 North America
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United States
• Third largest population in world
• Fourth largest land mass
• Largest economy
• 30 percent of world’s GDP in 2004
• Prime market for exports
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The U.S. Dollar
Invoicingcurrency
Flightcapital
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Classifying Countries by Income Levels
High Income
Lower Income
Middle Income
Least Developed
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Figure 2.2 Headquarters of World’s Largest Corporations in 2005 by Country
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Canada
• Second largest land mass
• 80 percent of population concentrated along U.S./Canadian border
• Rich natural resources
• Trade with U.S. - single largest bilateral trade relationship in world
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Advantages of Canada
• Proximity to U.S. market
• Stability of legal and political systems
• Excellent infrastructure and educational systems
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Mexico
• Largest Spanish-speaking nation
• Federal government system
• Participant in NAFTA along with U.S. and Canada
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Central America and the Caribbean
• Economic development hindered by
– Political instability
– Chronic U.S. military intervention
– Inadequate educational systems
– Weak middle class
– Poverty
– Import limitations
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Marketplaces of Western Europe
European Union Member Countries
Other Countries in Western Europe
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Euro Countries
• Belgium
• France
• Luxembourg
• Germany
• Italy
• Netherlands
• Ireland
• Greece
• Portugal
• Spain
• Austria
• Finland
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Map 2.2 Western Europe
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Marketplaces of Eastern Europe
• Russia
• Estonia
• Latvia
• Lithuania
• Armenia
• Belarus
• Georgia
• Moldova
• Ukraine
• Azerbaijan
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Map 2.3 Eastern Europe
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Marketplaces of Central Europe
• Romania
• Bosnia-Herzegovina
• Croatia
• Macedonia
• Slovenia
• Serbia
• Montenegro
• Albania
• Austria
• Bulgaria
• Czech Republic
• Slovak Republic
• Hungary
• Poland
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Map 2.4 Central Europe
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Marketplaces of Asia
• Japan
• Australia and New Zealand
• The Four Tigers
• China
• India
• Afghanistan and Central Asian Republics
• Southeast Asian Countries
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Map 2.5 Asia
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Japan
• Second largest economy
• GDP of $4.6 trillion in 2004
• Industries controlled by keiretsu
• GDP growth rate of 1.3 percent
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Map 2.6 Australia and New Zealand
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The Four Tigers
South Korea Taiwan
Singapore Hong Kong
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China
• World’s most populous country
• Communist ideology mixed with market-oriented economic policies
• Heavy FDI
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India
• World’s second most populous country
• Per capita GDP of $620
• British colony until 1947
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Afghanistan and the Central Asian Republics
• Afghanistan
• Kazakhstan
• Uzbekistan
• Tajikistan
• Turkmenistan
• Kyrgyzstan
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Southeast Asian Countries
• Thailand, Malaysia, and Indonesia
• Low labor costs
• Significant FDI in recent years
• Continued recovery from currency crisis in 1997 and 1998
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Marketplaces of Africa and the Middle East
• Africa
– 867 million people
– 54 countries
– Major economies:
• South Africa
• Ivory Coast
• Algeria
• Nigeria
• Middle East
– Cradle of civilization
– Major economies:
• Saudi Arabia
• Kuwait
• UAE
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Map 2.7 Africa and the Middle East
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Map 2.8 The Middle East
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Marketplaces of South America
• Brazil
• Bolivia
• Uruguay
• Argentina
• Chile
• Colombia
• French Guiana
• Paraguay
• Peru
• Ecuador
• Venezuala
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Map 2.9 South America