1. 3.2 The Global Marketplace
Business Principles A
Chapter 3
Mrs. Sorrell

2. International Business Environment
Geography
Location, climate, terrain, seaports, and natural resources
Cultural Influences
Accepted behaviors, customs, and values of a society
Economic Development
Literacy level
Technology
Agricultural dependency
Infrastructure
In Mexico, many businesses close for a few hours in the afternoon while people enjoy lunch and a siesta.
Other social factors: language, religion, values, customs, and social relationships (families, labor unions, and other organizations)
Better education systems usually provide more and better goods and services
Automated production, distribution, and communications systems allow companies to create and deliver goods, services, and ideas quickly.
Agricultural economies do not have the manufacturing base to provide citizens with great quantity ad high quality of a product
Infrastructure = transportation, communication, utility systems
Germany has efficient rail system, high-speed highways, and computers—better prepared for international business activities than other nations.
International Business Environment

3. Political and Legal restrictions
Government system
Political stability
Trade barriers
Business regulations
Political and Legal restrictions

4. Look at Figure What are some specific examples of the four main factors of the international business environment? Name the country and the factor that they possess.
Develop a list of items for each of the following categories: geography, cultural influences, economic development , and political/legal concerns. Explain how these items could affect a company when doing business in another country.
Activity 3.2.1

5. International trade barriers
Quotas
Limits on exports and imports in a given perod of time
Tariffs
Tax placed on imported products
Embargoes
Government stops the export or import of a product completely
Crude oil may have quotas so that the supply will remain low and prices will stay at a certain level.
Quotas may be set on imports from another country to express displeasure at the policies of that country.
Quotas can be set by a country to protect one of its industries from too much competition from abroad.
Sometimes tariffs make the cost so high that the consumer decides to buy one in their own country. High tariffs ten to lower the demand for the product and reduce the quantity of that import. Many people believe tariffs should be used to protect US jobs from foreign competition.
Some tariffs are a set amount per pound, gallon, or other unit, while others are figured on the value of the good. i.e. bicycles Many people believe that tariffs should be used to protect US jobs from foreign competition.
Embargoes offer more protection from international competition for their own industries than the quota or tariff. Could prevent sensitive products from falling into the hands of unfriendly groups or nations. May express disapproval of the actions or policies of another country.
International trade barriers

6. Use the internet to give a real-world example of a quota, tariff or embargo.
Do tariffs on imported consumer goods help consumers or hurt them?
Activity 3.2.2

7. Encouraging international trade
Free-trade zones
Selected area where products can be imported duty-free
The products are stored, assembled, or used in manufacturing
Importer pays duty only when the product leaves the zone
Free-trade agreements
Member countries agree to remove duties (import taxes) to promote the movement of goods
Common markets, aka economic community
Allows companies to invest freely in member countries and workers can move freely across borders
US, Canada, and Mexico began implementing the North American Free Trade Agreement. No tariffs are assessed on good moved between these three countries.
Encouraging international trade

8. Why do you think US businesses would be interested in exporting?
Use the internet to find a company that produces a popular American product and locate information about their international operations. Describe a product or packaging adapted to another country.
Activity 3.2.3