INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning SLIDE 1

1LESSON 1-1

The Foundation of International Business

GOALSGOALSDistinguish between domestic

business and international business.

Discuss the reasons why international business is important.

Understand that international trade is not just a recent event.

INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning

International Business In the early days of the United States, most families grew the food they ate

and made the clothes they wore. As population increased production and distribution methods improved.

In the same way that people within a country are dependent on each other for goods and services, so are countries.

Nations that have extensive production and distribution facilities-such as United States, Canada, and Japan and the western Europe nations-have some level of economic independence. However, they are still dependent on other countries.

Ex. Most of the coffee used in the United States comes from Brazil, and Japan depends on other countries for almost all of its oil.

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INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning

Domestic Business

Making, buying and selling goods and services within a country is called domestic business. If you purchase a soft drink made in your own country it is called domestic.

Quick Think?

  What occurred in the last summer Olympics that did

NOT occur in this upcoming WINTER Olympics with regards to domestic business?

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INTERNATIONAL BUSINESS, 4e CHAPTER

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What Is International Business?

All business activities needed to create, ship, and sell goods and services across national borders

Also called Global business International trade Foreign trade

INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning SLIDE 5

1Why Is International Business Important?

Materials, parts, and demand Global opportunities Improved political relations

INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning

Materials, parts, and demand

Products often made in the United States often include materials from around the world. Each year American companies buy oil and steel from other nations to use in factories. Nearly every U.S. built car has parts from-Japan, Mexico, France, Korea, and England.

Global Dependency- exists when items that consumers need and want are created in other countries

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INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning

Global Opportunities

Many businesses, large and small increase sales and profits with foreign trade. These companies are involved in global economy

People invest in companies/stock-why?

Companies expand to other countries-why?

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INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning

Improved Political Relations

Help to improve mutual business understanding, communication, and the level of respect among people in different nations.

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INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning SLIDE 9

1LESSON 1-2

International Business Basics

GOALSGOALSDescribe basic inter-national

business activities.Explain the components of the

international business environment.Name important skills for

international business and describe the importance of international business for workers, consumers, and citizens.

INTERNATIONAL BUSINESS, 4e CHAPTER

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1The Fundamentals of International Trade

For the buyer, products bought from businesses in other countries are called imports.

Ex. A manufacturing company in Korea can sell radios to an electronics store in the United States

Who is the importer? For the seller, exports are products sold in other

countries. Same question. Who is the exporter?

INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning

Trade Barriers

Although this process sounds simple, obstacles can arise. These are called trade barriers.

Trade barriers-restrictions that reduce free trade among countries. These barriers could appear in several forms: Import taxes increase the cost of foreign products Quotas restrict the number of imports Laws prevent certain products from coming into a country

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INTERNATIONAL BUSINESS, 4e CHAPTER

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1The International Business Environment

Geographic conditionsCultural and social factorsPolitical and legal factorsEconomic conditions

INTERNATIONAL BUSINESS, 4e CHAPTER

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1The International Business Environment

GEOGRAPHIC CONDITIONS● Climate● Terrain and seaways● Natural resources● Agriculture products

GEOGRAPHIC CONDITIONS● Climate● Terrain and seaways● Natural resources● Agriculture products

ECONOMIC CONDITIONS● Type of economic system● Education level● Type of industries● Technology

ECONOMIC CONDITIONS● Type of economic system● Education level● Type of industries● Technology

CULTURAL & SOCIAL FACTORS● Language● Education● Religion● Values and customs● Social relationships

CULTURAL & SOCIAL FACTORS● Language● Education● Religion● Values and customs● Social relationships

POLITICAL & LEGAL FACTORS● Type of government● Political stability● Government policies toward

business

POLITICAL & LEGAL FACTORS● Type of government● Political stability● Government policies toward

business

INTERNATIONAL BUSINESS, 4e CHAPTER

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The Global Business World

International business skillsHistoryGeographyForeign languageCultural awarenessStudy skills

INTERNATIONAL BUSINESS, 4e CHAPTER

© 2011 South-Western | Cengage Learning

The Global Citizen

Consumers have more choices because the selection of goods and services is no longer limited to items produced in their own country.

There might be more products, different products, or products that cost less.

Career opportunities expand for workers as international business creates demand for additional workers and different kinds of jobs.

Act responsibly

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