Global Marketplace 3-2

Businesses Must Consider… Geography Cultural Influences Economic Development Political and Legal Concerns

Geography Location Climate Terrain Seaports Natural Resources

Cultural Influences Culture is accepted behaviors, customs, and values of a society. This can include Language, religion, values, customs, and social relationships

Economic Development Literacy Level Technology Agricultural Dependency Education system is a good indicator Technology Agricultural Dependency Infrastructure Transportation, communication, and utility systems

Political and Legal Concerns Government regulates Advertising Products Contracts

International Trade Barriers Trade Barriers: restrictions to free trade Formal Trade Barriers Quotas Tariffs Embargoes Informal Trade Barriers Culture Traditions Religions

Quotas Limit on the quantity of a product that may be imported or exported Control supply and as a result market price Bad relationships Limit competition U.S. has imposed quotas on Sugar, cattle, dairy products, and textiles

Tariffs Tax that government places on certain imported products Why do we have tariffs? Designed to increase the price of imported goods

Embargoes Stop the export or import of a product completely Why would this be done? Protect their own industries against foreign competition Control who gets the product Bad relationships

Free-Trade Zones Promotes international business Area where products can be imported and then stored Usually near seaports or airports Tax is only paid once the product leaves the zone

Free-Trade Agreements Countries can set up free-trade agreements with other countries Remove formal barriers NAFTA Designed to enlarge markets and economic bases

Common Markets Members do away with trade barriers Share the same policy on external barriers European Union (EU) Expand trade Promote regional economic integration

Dlabay, Burrow and Eggland. Intro to Business 6e Dlabay, Burrow and Eggland. Intro to Business 6e. Mason, OH: Thompson South-Western, 2006.