GLOBAL OPPORTUNITIES Chapter 4

4.1 Global Entrepreneurship Describe the role of small business and entrepreneurship in today’s multicultural 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.

Global Economy The Global Economy: interconnected economies of the nations of the word Importing: buying or bringing in goods from other countries to sell Exporting: selling & shipping of goods to another country http://blog.disneystore.com/blog/2014/07/here-comes-disney-tsum-tsum.html

Global Economy Small Business Today How did this happen? Purchase goods/services in other countries Sell goods/services in other countries Competitors in other countries How did this happen?

Global Economy Trade Barriers have fallen World Trade Organization: global coalition of governments that make the rules of international trade WTO works to eliminate/lessen trade barriers WTO promote free trade

Global Economy Trade Barrier: restriction on goods entering or leaving a country Tariff: taxes imposed by a government on imported or exported goods Question: Why would a country impose trade Barriers? Are all trade barriers Tariffs?

Global Economy North America Free Trade Agreement European Union (EU) NAFTA Makes exporting and importing among the US, Canada, and Mexico easier European Union (EU) Europe's Trading Bloc Promote free trade and common currency

Global Economy http://www.youtube.com/watch?v=95EeUAvAba4 Technology Has Made the World Smaller Communication Information Processing Transportation Internet http://www.youtube.com/watch?v=95EeUAvAba4

Global Economy Global Opportunities: operating an international business is different than a domestic business: Countries have different economic systems, political systems, cultures, legal systems, and levels of development Management is more complicated Conducting business across borders requires an in-depth understanding of international trade and restrictions of foreign governments Must have policies to deal with movements in exchange rates

Global Economy Asia Latin America enormous and diverse continent many unique sophisticated societies growing source of products/services Latin America Diverse community with many cultural differences South America, Central America, and the Islands of Caribbean

Global Economy Europe Regions in Transition Difficult market-no common culture Cultural differences Must segment market to succeed Risk taking/business failure not acceptable Regions in Transition Developing countries provide shaky opportunities Unstable governments Many barriers, little support for business

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

Understanding International Business Failure to prepare is preparing to fail! Study Customs--Shows Respect Allows you to modify your business practices to interact in the global marketplace

Tips for Showing Respect Dress conservatively in dark colors (Asia: white is a symbol of mourning) Do not correct the other person’s English (make an effort to learn key phrases) Be prepared to remove your shoes in certain situations (respect) Do not comment on food except to praise it Do your homework before you do business (study country and customs) Build relationships before you do business (build trust) Bring your own interpreter See pages 77 & 78

Strategies for Entering International Trade US Census Bureau’s Guide to Foreign Trade Statistics (https://www.census.gov/foreign-trade/guide/index.html ) Standard Industrial Trade Classification (SITC) Codes (products traded in specific countries) International Trade Administration International Business Exchange (IBEX) Trade Missions “Best Prospect List”

Importing & Exporting Decide on a Product to Export Disposable Income What products do other countries want? Paper, electronics, chemical, apparel, industrial machinery, computers, and agricultural products Import Opportunities Low labor costs, found only in certain countries Attend trade shows Read trade publications Research your market

Importing & Exporting Export Opportunities Entering the Global Market Complicated: understand foreign county, build relationships Entering the Global Market Web site Trade Intermediary Establish a Foreign Joint Venture License foreign business to sell your product Use Export Management Company Hire a Freight Forwarder

Importing & Exporting Government Regulations on International Trade Over 100 federal agencies regulate imports & exports US Customs Service: oversight on import requirements US Census Bureau: on export requirements Export Assistance Programs: complex process, offer programs to help

Importing & Exporting Things to Consider Before Going Global Do you offer solutions? (70’s Japanese Cars) Do you have a new idea? (UBER, LYFT) Is there a market for your product or service? (China-Walmart) How good are you at handling risk and frustration? (What foreign governments require to open a business) Do you have any good contacts in other countries? (who do you know)

Global Opportunities Chapter Questions Key Concepts page 85, Questions 2-7 Critical Thinking page 85, Questions 8-15 Write About It page 85, Question 20 Academic Skills page 86, Question 21 Ethical Practices page 86, Question 25