AB209 Small Business Management Unit 5 – The Business As a Global Entity

Contact Information AIM: teachterrab Office Hours: Monday 7:30-8:30pm EST Kaplan Technical Support: (For all computer related issues)

Global Business Today’s businesses are now operating within today’s global marketplace! In this unit, we pause from our business plan to briefly examine the collaborative opportunities as well as global competitive challenges that this global marketplace presents for the small business leader. How he or she responds to this global reality may very well determine the success or failure of the venture.

Unit 5 Outcomes Identify the basic forces driving global business Describe the potential for global collaboration and cooperation within small businesses. Understand and compare strategy options for global businesses. Recognize available assistance for small businesses engaged in international business.

Unit 5 To Do List Start the Unit: Review the key terms Study: Read Chapter 18 in your text Prepare: Carefully consider role of your venture in a global market. Graded Assignments: Respond to the Unit 5 Discussion Board Complete the Unit 5 Review Quiz Attend the Unit 5 Class Seminar or complete the Alternative Assignment

Unit 5 Class Discussion Unit 5 Discussion: Read the scenario in “You Make the Call – Situation 1” at the end of Chapter 18 concerning Luis Aburto and his firm Scio Consulting International, LLC. After reading this scenario, respond to the following questions: 1. What additional information would be helpful to Aburto as he ponders his decision? 2. What additional advantages and disadvantages can you think of that Aburto should consider when choosing between off shoring this work to India and “near-shoring” it to Mexico? 3. Which location would you choose – India or Mexico? Be sure to build a strong case for your final decision.

Why Would a Small Business Engage in Global Trade? 1.To gain access to additional markets with more customers 2.To reduce costs (labor, transportation, etc.) 3.To gain access to resources (raw materials) 4.To capitalize on the special features of a location (Italian designer goods, Swiss chocolate, French wine, etc.)

Two Ways Small Businesses Can Use Global Trade: 1.Competitively: Traditional methods involving exporting, importing, countertrade, licensing, franchising. Expanding markets Lower costs  What examples of competing globally can you list?

Two Ways Small Businesses Can Use Global Trade: (Continued) 2. Collaboratively: Innovative ways to use the specific expertise, special location features or market knowledge and experience of foreign firms (International strategic alliances, outsourcing, Greenfield ventures, etc.).  What examples of collaborating globally can you list?

Challenges to Global Business! ). Political Risk: The possibility that a country’s political circumstances will negatively impact the performance of the business.  Can you cite an example of political risk?

Challenges to Global Business! (Continued) ). Economic Risk: The possibility that a country’s political leadership will mismanage the nation’s economy such that it negatively impacts the performance of the business.  Can you cite an example of economic risk?

Challenges to Global Business! (Continued) ). Managerial Risk (Limitation): The possibility that a business’ management may not possess skills sufficient to deal with the complexities of a foreign country’s markets.  Can you cite an example of managerial risk?

Global Resources for Small Businesses ). 1.Trade Leads – Many Web-based trade leads sites. 2.Trade Missions – Prearranged visits to foreign countries to promote trade. 3.Trade Intermediaries – Contract agencies that assist a foreign firm in doing business in that country. 4.Private Banks – Larger banks usually have representatives skilled in foreign trade. 5.The Small Business Administration – Government agency offers a host of resources to facilitate trade by small US businesses.

Any questions?

Unit 6 To Do List Start the Unit: Review the key terms Study: Read Chapter 9, Chapter 15, and Chapter 21 in your text Prepare: Carefully review the previously completed sections of your Descriptive Business Plan in your AB209 Project Template. Graded Assignments: Respond to the Unit 6 Discussion Board Complete the Unit 6 Assignment Complete the Unit 6 Review Quiz Attend the Unit 6 Class Seminar or complete the Alternative Assignment

See you next week! Remember, our Class Seminars will always be held at the same hour and the same day each week! After this seminar has concluded, there will be a recording in the archives located in the seminar room. It may be selected by date.

Thank you for joining me today! I look forward to joining you next week!