...CHAPTER 2 THE GLOBAL ECONOMIC ENVIRONMENT SUMMARY A. The economic environment is a major determinant of global market potential and opportunity. In today’s global economy, capital movements are the driving force, production is uncoupled from employment, and capitalism has vanquished communism. Based on patterns of resource allocation and ownership, the world's economies can be categorized as market capitalism, centrally-planned capitalism, centrally-planned socialism, and market socialism. The final years of the twentieth century were marked by transitions toward market capitalism in many countries that had been centrally controlled. However, great disparity still exists among the nations of the world in terms of economic freedom. B. Countries can be categorized in terms of their stage of economic development: low income, lower middle income, upper middle income, and high income. Gross domestic product (GDP) and gross national income (GNI) are commonly used measures of economic development. The 50 poorest countries in the low-income category are sometimes referred to as least-developed countries (LDCs). Upper middle-income countries with high growth are often called newly industrializing economies (NIEs). Several of the world’s economies are notable for their fast growth; the BRIC nations include Brazil, Russia, India, and China. The Group of Seven (G7), Group of Eight (G-8), and Organization for Economic Cooperation and Development (OECD) represent...
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...Assignment 1 Questions Derrick Shoemaker 10/14/2012 MBA6008 - Global Economic Environment Assignment 1 Questions Question 5 page 21 a) Chart of production possibities, the production function shows the relationship between the quantity of inputs used in production and the quantity of output resulting from production. b) Economy is at "C" then automobile will be at "6" and forklifts would be at "19" Notice that the production possibility curve slopes downward from left to right that means that there is an inverse relationship between automobiles and forklifts. So this would be a representation of its shape. c) In the law of opportunity when the slop is steep there's a high opportunity cost for automobiles and low opportunity for forklifts. But that of that it being flat of 3 automobiles to 20 forklifts the opportunity for forklifts are higher to automobiles. d) 1. No 2. When technology improves, when more resources are discovered it will give more output with the same inputs. What I mean is that when technology improves the entire production possibility curve shifts outward. 3. As with technology this would also increase in international growth which would lead to growth in the production curve. This also would state that current production possibilities could outgrow it production curve. Income per year | | Savings per year | | | | 20,000 | | 1500 | 15,000 | | 1000 | 10,000 | | 500 | 5,000 | | 0 | 0 | | -500...
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...Global Economic Environment In: Business and Management Global Economic Environment Global Economic Environment Generally, global economic environment is influenced by various factors such as technological, environment, political, socio-cultural, and demographic that directly affects businesses. Economic environment refers to the nature of economic systems and policies, distribution of income and wealth, and level of income. Indeed, economic environment has a complex and very dynamic nature; it is continually changing along with the changes in political situations and government policies. Global Economic Environment Mainly, global economic environment is comprised of several components including the economic systems, conditions, policies, legislations, and environment. Indeed, the economic policies being imposed in every business unit are significantly influences by the overall condition of economy. This includes the improvements that occurred in economic conditions such as the purchasing power of the public, standard of living, distribution of income, and supply and demand. Mainly, these factors reflect the size of the market. Another factor reflecting the economic condition is the business cycle, which is critical to every business unit. It refers to the different stages such as prosperity, boom, decline, depression, and recovery. The economic condition of a country can be understood through its national income, per capita income, and distribution of income, demand and...
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...Discussion Board 4 Liberty University Business 620 Global Economic Environment Frank Bentley November 3, 2014 3. Under what condition should a firm continue to produce in the short-run if it incurs losses at the best level of output? Continuing to produce in the short term depends heavily on fixed costs for the company when compared to negative returns. When the profits for a company begin to decrease to the point of negative return they must attempt to minimize those loses while continuing to produce a product for profit. In the short run, a company has at least one fixed cost (Salvatore, 2012). The company should only produce in the short-run if the losses incurred do not exceed fixed costs. At this point production yields zero output and if fixed costs can be covered the company can still produce. If variable costs can’t be eliminated production becomes pointless. 5. As an employer wants to reduce the production cost during the economic recession, he/she could choose to (1) lay off some workers without changing wages or (2) keep all workers but cut wages for all. Which method would you choose? Why?...
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...Summary of article The central bank of Singapore; Monetary Authority of Singapore (MAS), has reported slowing down the pace of the Singapore dollar's appreciation to stimulate the economic growth. During the beginning of the 4th quarter this year, it was reported that Singapore's core inflation had reached a six-month high record of 0.6 per cent in the year, but the possible issue of deflation due to the slow global growth is still the primary concern for most. One of the other reason that why MAS wants to use a more aggressive easing approach to slow the local dollar’s gain against its trading partners could be the need of guarding against the import inflation. Due to high demand, Singapore yearly imports around S$464 billion of goods and major of them are the fruits and vegetables, the weakening of Singapore dollar compared to US dollar makes the prices of most imported perishable items more expensive. The secondary reason could be coming up with fiscal expansionary policy measures to revive the growth mainly because the government’s spending on building infrastructure over the past years have shown positive effects. Lastly, the estimation of unexpectedly stronger advance Gross Domestic Product (GDP) growth in the third quarter could be the reason for slowing the pace of local dollar appreciation. Introduction Due to the scarcity of land and labor, Singapore is facing not enough manpower and at the same time underemployment and...
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...Executive Summary Costco is one of the most profitable retail stores in the United States at the moment. This is in spite of the prevailing tough global economic times and stiff competition from stores such as Wal-Mart and Target. Costco, a members’ wholesale retail store, was founded in 1983 in Washington by Jeffrey Brotman, who serves as the current Chairman of the board of directors and James Sinegal, the current company president. Costco has not been spared by the current global economic conditions. They have affected it in a number of ways that have made the company’s management respond in a manner that is meant to ensure that the business not only survives but grows even stronger. First, Costco has taken strong measures to keep enough employee numbers. Customers are better served by employees who are in good health. Employees are not going to be in good health if they work long hours and cannot visit a doctor when sick. Costco employees work normal hours since there are enough employees to serve the company’s customers. While other stores such as Wal-Mart have seen it fit to downsize their workforces, Costco has moved to ensure that employees are of the right numbers all over its stores within and without the United States. Secondly, the current tough global economic conditions have driven Costco into extending good salaries to its employees. The good compensation has ensured that employees are well motivated and ready to serve customers in a better manner. As counter...
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... Executive Summary Module 1 - Identifying Global Business Opportunities Module 2 - Analyzing International Competitors Module 3 - Assessing the Economic/Geographic Environment Module 4 - Assessing the Social- Cultural Environment Module 5 - Assessing the Political Legal Environment Module 6 - Selecting a Global Company Structure Module 7 - Financing Sources for Global Business Operations Module 8 - Creating a Global MIS (Management Information System) Module 9 - Identifying Human Resources for Global Business Activities Module 10 - Managing International Financial and Business Risks Module 11 - Product Target Market Planning for Foreign Markets Module 12 - Designing a Global Distribution Strategy Module 13 - Planning a Global Promotion Strategy Module 14 - Selecting an International Pricing Strategy Module 5...
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...International Business Environment Name: University: Course Title: Instructor: Date: Executive Summary International business environment changes in the last couple of years have had a significant impact on the sectors of the world economy more so the airline sector, with this in mind the term paper focused on the impact of changes in the international business environment on the airline industry. International business environment is viewed as the most contexts for international business and comprehending how forces in this environment impact the business operations is the difference between business failure and success. To this end, the research established various changes in the business environment that have taken place in political, economic, financial and socio-cultural circles. Political changes especially the Arab spring have had far reaching impact on the airline sector with fall in passenger numbers to these destination as well as the rise in fuel prices negatively impacting the growth of the industry, political instability in other areas as well as laws regulating the airline sector have been on the rise as countries seek to protect local airlines, the economic crisis slowed down the growth of the sector but with the recovery process on track, the airline industry is expected to grow into the foreseeable future, issues such a new taxes for example carbon tax in Europe, the unstable foreign exchange market and inflationary pressures...
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...Topic 4 Managing The Environment What’s Your Global Perspective? • Parochialism - viewing the world solely through your own perspectives, leading to an inability to recognize differences between people. • Ethnocentric Attitude - the parochialistic belief that the best work approaches and practices are those of the home country. Other Global Perspectives • Polycentric Attitude - the view that the managers in the host country know the best work approaches and practices for running their business. • Geocentric Attitude - a world-oriented view that focuses on using the best approaches and people from around the globe. Understanding the Global Environment – Trading Alliances • European Union (EU) - a union of 27 European nations created as a unified economic and trade entity with the Euro as a single common currency. Exhibit 4-1 European Union Map Trading Alliances (cont.) • North American Free Trade Agreement (NAFTA) - an agreement among the Mexican, Canadian, and U.S. governments in which certain barriers to trade have been eliminated. Trading Allowances (cont.) • Association of Southeast Asian Nations (ASEAN) - A trading alliance of 10 Southeast Asian nations Exhibit 4-2 ASEAN Map Global Trade Mechanisms • World Trade Organization (WTO) - a global organization of 153 countries that deals with the rules of trade among nations. • International Monetary Fund (IMF) - an organization of 185 countries that promotes international monetary cooperation...
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...MACRO FACTORS AFFECTING BUSINESS ENVIRONMENT SUBMITTED BY: AAYUSH VERMA INTRODUCTION A business firm is an open system. It gets resources from the environment and supplies its goods and services to the environment. There are different levels of environmental forces. Some are close and internal forces whereas others are external forces. External forces may be related to national level, regional level or international level. These environmental forces provide opportunities or threats to the business community. Every business organization tries to grasp the available opportunities and face the threats that emerge from the business environment. The term business ‘typically’ refers to the development and processing of economic values in society. Normally, the term is applied to portion of economic activities whose primary purpose is to provide goods and services for society in an effective manner. It is also applied to economics and commercial activities of institutions which having other purposes. Business may be defined as “the organised effort by individuals to produce goods and services to sell these goods and services in a market place and to reap some reward for this effort.” Functionally, we may define business as “those human activities which involves production or purchase of goods with the object of selling them at a profit margin”. Business organizations cannot change the external environment but they just react. They change their internal business components...
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...UNIVERSITY OF WALES: TRINITY SAINT DAVID PRIFYSGOL CYMRU: Y DRINDOD DEWI SANT School of Business The Global Business Environment SBUS4004 Summer June 2014 – Term 1 October 2014 – Term 2 SBUS4004 The Global Business Environment MODULE CODE: TITLE: LEVEL: CREDITS: TEACHING METHODS: SBUS4004 The Global Business Environment 4 20 Lectures Seminars Independent Study N100 16% 8% 76% JACS CODE: AIM(S) • To introduce the importance of the global business environment within which organisations operate. To enable students to identify and recommend business decisions considering the changing components of the global business environment. • LEARNING OUTCOMES By the end of this module students should be able to: • • • outline and discuss the characteristics of an organisation’s environment; identify and discuss how organisations interact with the global business environment; interpret and produce supply and demand (price) predictions based on global business environment scenarios; distinguish how different organisations compete domestically and internationally; understand and identify cultural differences between countries and the importance of the different aspects of culture in doing business in a global context. • • CONTENT • Determining the difference between needs and wants and their significance to economics and business. Three economic systems, planned, free and mixed economies and the implications of each system on business/ organisations...
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...become a global phenomenon in the world today, with growing numbers of tourists every year, mostly attributed to mass tourism. Mass tourism is defined as global tourism with many people staying overseas for more than one night, as compared to other forms of tourism such as ecotourism or business and medical tourism. The growth in tourism has been mainly attributed to the growing affluence of today’s society, lifestyle changes, as well as technological developments that allow for greater holidays at cheaper prices too. However, tourism has also brought along many negative impacts, in terms of the economic aspect, cultural and social aspect, and most importantly in the environmental aspect too. As such, ecotourism has been brought into the problem to be tried as a feasible alternative to mass tourism. Ecotourism aims at safeguarding both natural and built environments, being sustainable and enabling local people to share in the economic and social benefits. Firstly, ecotourism helps to protect the environment and sustain it. With tourism, environmental impacts such as the destruction of the natural environment and wildlife habitat, such as in coastal, marine and inland areas, has occurred along with various other consequences such as the loss of ecosystems and pollution. These consequences have stemmed from mass global tourism that involves many tourists going to a single attraction. For example, overcrowding in America’s Yellowstone National Park has resulted in the environment being...
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...Alla-Ud-Din Registration No CIIT/SP15-EMBA-160/CVC Admission Roll No: -36884 Managing People and Organization (MGT492) Solution Assignment-1 MGT 492 ASSIGNMENT NO 1 Q1. Discuss in details Government environment and Economic environment effect on Global borderless environment? World has become a global village and government policies are becoming flexible for globalization. Instable political situation in a country can badly affect the business and global borderless environment. Different trade agreements have witness for a better global environment for business and supply chain management. Economic environment includes economic development, exchange rate and infrastructure. Economic development in the positive direction can have good effect on global borderless environment. If the inflation in currency is high then there is high risk for the business. The exchange rate can effect global business environment. The infrastructure is mandatory for the global business environment. If the infrastructure is poor then the supply chain will require long time and the inventory will need to have long warehousing. Road structure is also a good economic requirement. Companies are going international by eliminating structural divisions that impose artificial geographical barriers. This type of MNC is often called a transnational or borderless organization, and reflects a geocentric attitude. Q2. Explain difference between Downsizing and Reengineering with example...
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...COURSE SYLLABUS COURSE TITLE: MGT/448 Global Business Strategies LSB04BSM09 REQUIRED TEXT/MATERIAL: Books 1. The World Is Flat A Brief History of the Twenty-first Century (Friedman) 2. International Business: Competing in the Global Marketplace, 5/e (Hill) 3. The Lexus and the Olive Tree: Understanding Globalization (Friedman) 4. Managing Cultural Differences (Harris, Moran) 5. Global E-Commerce Strategies for Small Business, (Da Costa, Laffont, Tirole) Scholarly Articles 1. International Business: Environments and Operations, (Daniels, Radebaugh, Sullivan) Journal of Political Economy 2. International Real Business Cycles, (Backus, Kehoe and Kyland) Journal of Political Economy 3. Going global: Using information technology to advance the competitiveness of the virtual, (Boudreau, Loch, Robey, Straub) Academy of Management Executive 4. Working with Americans, (Thompson) The FLAME of Claremont Graduate University Websites: 1. Economist.com (The Economist Magazine) 2. FT.com (Financial Times Newspaper) 3. cia.gov/cia/publications/factbook (CIA world Fact Book) 4. loc.gov/rr/international/portals.html (Library of Congress Country Info) 5. windowontheworldinc.com/countryprofile/index.html (Tips for Global Business Etiquette 6. transparency.org (Transparency International) 7. scholar.google.com (Google for academic search) INSTRUCTOR: Taj Ahmad Eldridge, MBA, Ph.D Int’l Political Economics & World Politics candidate WELCOME: Buenas...
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...CHAPTER 1 INTRODUCTION TO GLOBAL MARKETING SUMMARY A company that engages in global marketing focuses resources on global market opportunities and threats. Successful global marketers such as Nestle, Coca-Cola, and Honda use familiar marketing mix elements – the four Ps – to create global marketing programs. Marketing, R&D, manufacturing, and other activities comprise a firm’s value chain; firms configure activities to create superior customer value on a global basis. Global companies also maintain strategic focus while pursuing competitive advantage. The marketing mix, value chain, competitive advantage, and focus are universal in their applicability, irrespective of whether a company does business only in the home country or has a presence in many markets around the world. However, in a global industry, companies that fail to pursue global opportunities risk being pushed aside by competitors. A firm’s global marketing strategy (GMS) can enhance its worldwide performance. The GMS addresses several issues. First is nature of the marketing program in terms of the balance between a standardization (extension) approach to the marketing mix and a localization (adaptation) approach that is responsive to country or regional differences. Second is the concentration of marketing activities in a few countries or the dispersal of such activities across many countries. Companies that engage in global marketing can also engage in coordination of marketing activities. Finally...
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