Chapter 4

2. Chapter 4 Global Opportunities Global Entrepreneurship 4.1 Ways to Enter the Global Market 4.2

3. 4.1 • Describe the role of small business and entrepreneurship in today’s multicultural, global economy. • Explain why the global market is important. • Discuss how to recognize and examine current trends that provide both domestic and global opportunities for entrepreneurs. Section 4.1 Global Entrepreneurship

4. 4.1 The countries of the world are linked in a global economy made possible by free trade agreements and advances in communications technology. International markets present opportunities in all regions of the world. Section 4.1 Global Entrepreneurship

5. 4.1 global economy exporting importing trade barrier tariff gross domestic product (GDP) Section 4.1 Global Entrepreneurship

6. Budgeting Goals • Set goals, make them specific, and prioritize them. • Estimate your income to the best of your ability. • Budget for unexpected events • Budget for fixed expenses, and list them. • Budget for variable expenses, and list them. • Record what you spend. • Review your spending patterns.

7. The Global Economy Entrepreneurship plays an important role in today’s multicultural global society. Technological advances and changes in trade barriers have created a global economy. global economythe interconnected economies of the nations of the world Section 4.1 Global Entrepreneurship

8. The Global Economy International markets provide opportunities for entrepreneurs to engage in importing and exporting goods and services. exportingthe selling and shipping of goods to other countries importingthe buying or bringing in goods from other countries to sell Section 4.1 Global Entrepreneurship

9. Trade Barriers Have Fallen The World Trade Organization is a global coalition of governments that makes the rules that govern international trade. Section 4.1 Global Entrepreneurship

10. Trade Barriers Have Fallen The World Trade Organization works to eliminate or lessen trade barriers and tariffs. trade barriersa restriction on goods entering or leaving a country Section 4.1 Global Entrepreneurship

11. Trade Barriers • When trade barriers are lowered, countries benefit from less taxes , more trade, and more employment of its workforce. • Tariff-a type of trade barrier imposed by a government as a tax on imported or exported goods.

12. NAFTA • NAFTA stands for the North American Free trade Agreement. • The United States, Canada, and Mexico are the members of this trade agreement.

13. Global Opportunities A nation’s economy is measured by its gross domestic product (GDP). gross domestic product (GDP)the total value of all goods produced in a country during the year Section 4.1 Global Entrepreneurship

14. Top Importers of U.S. Goods • South America-$28,899M • Mexico-$97,531M • European Union-$143,748M • Canada-$160,830M • Asia- $193,495M

15. 4.1 • Describe the role of small business and entrepreneurship in today’s multicultural, global economy. Small businesses and entrepreneurs are going global to take advantage of the opportunities to do business with other countries. Section 4.1 Global Entrepreneurship

16. 4.1 • Explain why the global market is important. The global market holds many opportunities for growing businesses because it is many times the size of the U.S. market. Section 4.1 Global Entrepreneurship

17. 4.1 • Discuss how the global market provides domestic and global opportunities for entrepreneurs. Opportunities lie in every part of the world where customers need and/or want products made in the United States and where products not found in the United States can be imported. Huge opportunities are available in Asia, Latin America, and Europe and in developing nations. Section 4.1 Global Entrepreneurship

18. 4.2 • Describe the benefits and risks of international trade. • Explain how to find the best international markets. • Compare and contrast importing and exporting. Section 4.2 Ways to Enter the Global Market

19. 4.2 To conduct international business successfully, you must understand foreign customs and cultures. Whether you choose to import or export products, the international market presents many profitable business opportunities. Section 4.2 Ways to Enter the Global Market

20. 4.2 interpreter Standard Industrial Trade Classification (SITC) codes International Business Exchange (IBEX) trade missions “best prospect” list disposable income trade intermediary foreign joint venture export management company freight forwarder Section 4.2 Ways to Enter the Global Market

21. Understanding International Business Understanding how other countries conduct business is important to your success as an entrepreneur. Section 4.2 Ways to Enter the Global Market

22. Proper Business Etiquette • Understand the culture in the country you travel to. • Know how to be respectful, when you travel. • Speak in terms of the foreign currency, not U.S. dollars. • Know how to greet someone properly. • Be punctual for a meeting. Time is important in other countries also.

23. Tips for Showing Respect Dress conservatively and in dark colors. Do not correct other people’s language. Be prepared to remove your shoes in some situations. Do not comment negatively on food. Do your homework before a meeting. Build a relationship before you do business. Bring your own interpreter. Section 4.2 Ways to Enter the Global Market 23

24. Tips for Showing Respect It is important to show respect and understanding for the cultures of the people with whom you do business. An interpreter will help ensure that your communications to others are accurate. interpreter a person who translates one language into or from another Section 4.2 Ways to Enter the Global Market

25. Strategies for Entering International Markets One good resource in finding an international market for your product or service is using Standard Industrial Trade Classification (SITC) codes. Standard Industrial Trade Classification (SITC) codes a system that details the kinds of products that are traded in specific countries and how well certain products sell in different markets Section 4.2 Ways to Enter the Global Market

26. Other Sources of Help There are many sources to help entrepreneurs locate the best market for their products or services. Entrepreneurs who want to sell online should contact the U.S. Chamber of Commerce regarding its International Business Exchange (IBEX). International Business Exchange (IBEX) the electronic commerce system that allows businesses to find trading partners and sell products and services anywhere in the world Section 4.2 Ways to Enter the Global Market

27. Other Sources of Help A small business with products on the government’s “best prospect” list will gain the chance to go on a trade mission. “best prospect” list a list compiled by the government of products that other countries want to purchase trade mission an opportunity offered by the U.S. government and private agencies to small businesses to travel to other countries to meet with foreign agents, distributors, or potential business partners Section 4.2 Ways to Enter the Global Market

28. Other Sources of Help • U.S Census Bureau’s- Guide to Foreign Trade Statistics.

29. Questions to be answered when Trading with countries. • How do you decide on what product to trade? • What are things you should consider before trading? (Cost, demand, quality, quantity, etc.)

30. Deciding on a Product to Export To be successful as an exporter of consumer products, it helps to market to countries to sell where people have enough disposable income. disposable income money people have to spend after paying for necessary expenses Section 4.2 Ways to Enter the Global Market

31. Where to Find Export Opportunities Establish an e-commerce web site Establish a foreign joint venture Use an export management company Hire a freight forwarder License foreign businesses to sell your products Use a trade intermediary Section 4.2 Ways to Enter the Global Market 31

32. Where to Find Import Opportunities Attend trade shows. Read trade publications and catalogs. Research the market. Talk to potential customers. Section 4.2 Ways to Enter the Global Market 32

33. Deciding on a Product to Export An entrepreneur can expand a business into a foreign market by using a trade intermediary. trade intermediary an agency that serves as a distributor in a foreign country Section 4.2 Ways to Enter the Global Market

34. Where to Find Export Opportunities Some entrepreneurs find it helpful to establish a foreign joint venture in order to gain entry into a new global market. foreign joint venture an alliance between an American small business and a company in another nation Section 4.2 Ways to Enter the Global Market

35. Where to Find Export Opportunities An entrepreneur wishing to export goods or services to another country may employ the services of an export managementcompany and/or a freightforwarder. export management an organization that handles all the tasks related to exporting for a manufacturer freight forwarder a company that arranges shipments and prepares necessary exporting paperwork Section 4.2 Ways to Enter the Global Market

36. Things to Consider Before Going Global When entrepreneurs think about going global they should make sure they have: • solutions • a new idea • a market for the product or service • the ability to handle risk and frustration • good contacts in other countries Section 4.2 Ways to Enter the Global Market

37. 4.2 • Describe the benefits and risks of international trade. The benefits of international trade include being able to purchase goods or services from and sell them to other countries and to manufacture in other countries. Countries with unstable governments provide a riskier due to form of opportunity; there are many barriers and little government support for business owners. Section 4.2 Ways to Enter the Global Market

38. 4.2 • Explain how to find the best international markets. The U.S. Census Bureau’s Guide to Foreign Trade Statistics helps in locating sources for various trade statistics. Standard Industrial Trade Classification (SITC) codes tell what kinds of products are traded in specific countries. Section 4.2 Ways to Enter the Global Market

39. 4.2 • Compare and contrast importing and exporting. Importing is buying products from other countries to resell in your own country. Exporting is selling and shipping goods to other countries. Section 4.2 Ways to Enter the Global Market

40. International E-Commerce Overseas markets represent an enormous economic opportunity for e-commerce enterprises, but doing business in another country can be complex. Entrepreneurs must be concerned with language, currency, culture, and country regulations. Section 4.2 Ways to Enter the Global Market 40

41. Tech Terms exchange rate the rate at which one currency is converted into another graphic user interface the design, content, and navigation of a Web site import regulations the rules that govern the types and amounts of products that can be sold, packing that can be used, and taxation Section 4.2 Ways to Enter the Global Market 41

42. Tech Terms real time the actual time that something takes place translation the process of changing one written communication into a second language with the same meaning Section 4.2 Ways to Enter the Global Market 42

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