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Foundation of International Business

Hafer: International Business Unit 1: 1-1. Foundation of International Business. Goals. Distinguish between domestic business and international business. Discuss the reasons why international business is important. Understand that international trade is not just a recent event. Key Terms.

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Foundation of International Business

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  1. Hafer: International Business Unit 1: 1-1 Foundation of International Business

  2. Goals • Distinguish between domestic business and international business. • Discuss the reasons why international business is important. • Understand that international trade is not just a recent event

  3. Key Terms What Is What Is International Business?Business? International Business (Also Called: global business, international trade, and foreign trade). • All business activities needed to create, ship, and sell goods and services across national borders. • *In the same way that people within a country are dependent on each other to produce goods and services, countries also are dependent on each other.

  4. Key Terms What Is What Is Domestic Business?Business? Domestic Business • Making, buying, and selling goods and services within a country • If you purchase a soft drink made in your own country, you are participating in domestic business

  5. Why Is International Business Important? • Materials, Parts, and Demand • The U.S. uses materials from all over the world to make different products. • i.e. Oil and Steel are purchased by U.S. companies yearly to use in factories. • Nearly every U.S. built car has parts that were manufactured in Japan, Mexico, France, Korea, England, and many other countries.

  6. Key Terms Why Is International Business Important?Business? Global Dependency • Acondition that exists when items consumers need and want are created in other countries. • i.e. Drought and other weather conditions in an African country might cause crop failures. As a result, the African country must obtain food from other countries

  7. Why Is International Business Important? • GlobalOpportunities • Companies sell to customers in other countries to expand business opportunities. • Businesses, large and small, increase sales and profits with foreign trade…these businesses are involved in the global economy. • Companies expand into other countries to create new investment opportunities…startups or growing enterprises.

  8. Why Is International Business Important? • Improved Political Relations • An old saying says, “countries that trade with one another are less likely to have wars with each other”. • International business activities can help to improve mutual understanding, communication, and a level of respect among people in different nations.

  9. When Did International Business Start? • Evidence suggests that China, India, and Japan were trading products throughout the world 15,000 years ago. • Various inventions created between 1769 and 1915 expanded interest in and opportunities for foreign trade…cotton gin, steam engine, and telephone. • The previous inventions improved communication, distribution, and production…as well as creating new global industries.

  10. KEY TERMS InternationalBusiness • all business activities needed to create, ship, and sell goods and services across national borders DomesticBusiness • making, buying, and selling goods and services within a country GlobalDependency • a condition that exists when items consumers need and want are created in other countries

  11. Goals • Describe basic inter-national business activities. • Explain the components of the international business environment. • Name important skills for inter-national business and describe the importance of international business for workers, consumers, and citizens.

  12. The Fundamentals of International Trade • Imports - products bought from businesses in other countries • Exports - products sold in other countries • TradeBarriers- restrictions that reduce free trade among countries

  13. The International Business Environment • GEOGRAPHIC CONDITIONS • Climate • Terrain and seaways • Natural resources • Agriculture products • CULTURAL & SOCIAL FACTORS • Language • Education • Religion • Values and customs • Social relationships • POLITICAL & LEGAL FACTORS • Type of government • Political stability • Government policies toward business • ECONOMIC CONDITIONS • Type of economic system • Education level • Type of industries • Technology 1

  14. The Global Business World • International Business Skills • History- Your awareness of your past can help you better understand today’s international business relations. • Geography- Knowledge of geography will help you understand how the climate and terrain of a country can affect transportation, housing, and other business activities. • Foreign language- Your ability to communicate effectively with people from other societies is imperative for successful foreign trade.

  15. The Global Business World • International business skills • Cultural awareness- You must be sensitive to customs and traditions of all societies. • Study skills- Asking questions, taking notes, and doing research are the tools necessary to keep up to date on changes in international business. • The global citizen- As a country becomes more involved in international business, the lives of its citizens change.

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