1. BBI2O – Introduction to Business | Mr. Ruston
International Business
BBI2O – Introduction to Business | Mr. Ruston

2. International Business
Benefits of International Business
Access to markets
Much bigger than domestic market
Access to resources
More resources in other countries

3. International Business
Cheaper Labour
Reduces cost of production and maximizes profit
Increased quality of goods
Can take advantage of what countries have to offer
Increased quantity
Increase sales and increase production to meet demand

4. “5Ps” of Int’l Business Promotion Product Ease/difficulty of promotion
E.g. internet usage
Product
Availability of resources to make products/services
E.g. Canada cannot produce many citrus fruits so we  buy them from warmer places such as US and Mexico, however we have lots of lumber so we sell that to Japan and England

5. “5Ps” of Int’l Business Preference Price Proximity
Some countries specialize in certain products
Eg. Italian fashion, French cooking, Japanese electronics
Price
Cost of wages, taxes and raw materials may be lower in other countries
Proximity
E.g. Windsor is near Detroit so Detroit influences economic activity in Windsor (ie “Motor City” Automotive Industry)

6. Social Costs, Offshore Outsourcing, Sustainable Development
Offshore outsourcing – practice of hiring service providers from countries where labour costs are lower to complete some or all of the steps in the production process
Sustainable development – process of developing that meets the needs of the present without compromising the ability of future generations to meet their own needs
Environmental degradation – occurs when nature’s resources are being used up faster than nature can replenish them

7. Tariffs, Non-Tariffs, Landed Cost, Excise Tax
Tariffs (customs duties) – form of tax on certain types of imports
Gives price advantage to Canadian producers
Non-tariff barriers – standards of the quality of imported goods that are set so high that foreign competitors cannot enter the market
E.g. European ban on hormone-treated beef

8. Tariffs, Non-Tariffs, Landed Cost, Excise Tax
Landed cost- actual cost of an imported item including all charges (transport costs, vendor costs, tax)
Excise tax – tax on the manufacture, sale or consumption of a particular product within a country
To encourage to buy Canadian goods
To discourage people from doing a certain activity (example: smoking)
Raises money for the government

9. Definitions
Trading bloc – group of countries that share same trading interests
GATT – General Agreement on Tariffs and Trade, international organization where members negotiate, resolve trade and collect data
Trade surplus –  more earnings from exports than imports

10. Definitions
Trade deficit – pays more for imports than earnings from exports
Balance of Trade – relationship between a country’s total imports and total exports
Culture – sum of  a country’s way of life, beliefs and customs