Global Business Environment Class 3

The International Marketing Task 7 Foreign environment (uncontrollable) 1 Political/legal forces Economic forces Domestic environment (uncontrollable) 2 7 Competitive structure Political/ legal forces (controllable) Competitive Forces Cultural forces Price Product Environmental uncontrollables country market A 3 Channels of distribution Promotion Environmental uncontrollables country market B 6 Level of Technology Geography and Infrastructure Economic climate Environmental uncontrollables country market C 4 5 Structure of distribution

U.S. Multinational in Europe - 1960’s }Fifteen years from now the world’s third greatest industrial power, just after the United States and Russia, may not be Europe, but American industry in Europe.~ J.S. Servan Schreiber: Le Defi American, 1967

The Nationality of the World’s 100 Largest Industrial Corporations (by country of origin) SOURCES: Adapted from “The World’s 500 Largest Industrial Corporations,” Fortune, Aug. 4, 1997

History of International Trade The Roman Empire - Build on International Trade What the Romans had: Pax Romana Common coinage Systematic law Central Market Locations Communication System

History of International Trade Others wanted a part of: Taxes Protection from pirates Lower cost of goods Ý lower prices Ý higher demand International Cooperation and Trade

History of International Trade The Fall of the Roman Empire Loss of cooperation European Feudalism & Protectionism Medieval International Trade Turning away from International Trade China & The Empress’s Palace (1896) Smoot-Hawley Act (1930s) & Consequences Trade embargoes as foreign policy tools

International Trade and Recent History Post World War II - A world divided Eastern Bloc Council for Mutual Economic Assistance Western world Pax Americana

International Trade and Recent History Charter for International Trade Organization (1948) - 53 countries

International Trade and Recent History Charter for International Trade Organization (1948) - 53 countries á General Agreement on Tariffs and Trade (GATT) - reduce tariffs á International Monetary Fund (IMF) á World Bank

International Trade and Recent History World Trade Organization (1994)

Trends in Global Business Internationalization of U.S. Markets Internationalization of U.S. Business Growth of Regional Trade Areas EU, NAFTA, AFTA, APEC Move toward free market system by countries in Latin America, Asia, Eastern Europe Large Emerging Markets such as Argentina, China, South Korea, Poland, India Evolving global middle income households GATT and World Trade Organization The TRIAD