THE FUTUREChapter ObjectivesI. The International Business EnvironmentCHAPTER 20THE FUTUREChapter Objectives- To understand the many changing dimensions that shape international business- To learn abut and evaluate the international business forecasts made by a panel of experts- To be informed about different career opportunities in international businessOpening CaseImporting on the InternetSummary:This case tells how a company has set up a service to allow U.S. manufacturers to sell their products directly to Japanese customers via the Internet. This company does the translation work for you and has access to online users in Japan. Companies that have used this service have found it to be very profitable.1.Chapter OutlineI. THE INTERNATIONAL BUSINESS ENVIRONMENTA. The Political Environment1. Reshaping of political blocks2. Formation of new groupings3. Breakup of old coalitionsB. Planned versus Market Economies1. Virtually all of the formerly centrally planned economies are becoming market-oriented2. International business has facilitated to movement toward market economies3. The North-South Relationshipa. The division between developed and less-developed countries (LDCs) will continueb. Africa will not be an attractive area for international businessc. Environmental protection will continue to be an issue for LDCsd. Three scenarios possible1) Continued international cooperation2) Confrontation3) Isolation4. Emerging Marketsa. Asia Pacific region will growb. China is the leading hot prospect in international businessc. India may be the country with the second highest opportunity for global economic growth and expansionFocus on PoliticsFood Fight in AfricaSummary:This case introduces the debate of genetically modified (GM) crops. Major agricultural companies want to give patents and technology for GM to African nations. This will allow them to feed their starving populations while also building a market for these companies in the future. Opponents claim the technology’s long-term effects are not known and that the EU’s refusal to allow imports of GM crops could hurt the African economies.5. A Divergence of Values may increase in the futureC. The International Financial Environment1. Debt constraints and low commodity prices impose slow growth prospects for many developing countries2. Developed countries have a strong incentive to help the debtor nations3. The dollar will remain one of the major international currencies, but the euro will growin importance4. Changes in one financial market will affect others5. There is much concern over the international debt load of the U.S.D. The Effects of Population Shifts1. The population discrepancy between less-developed nations and the industrialized countries will continue to increase2. In industrialized world a population increase will become a national priority3. In the developing world a population stabilization will be desired4. Population balance between males and females may become a key concernE. The Technological Environment1. We are now a global village due to communication and technology advances2. Global brands now due to the Internet3. Makes it easier to start a new business4. High technology will continue to be controversial (especially in genetics)5. Funding of technological advancement will continue to be a struggleII. Globalization and Trade NegotiationsA. Globalization will continue, but national sovereignty and culture will want to be maintainedB. Trade negotiations will continue to be difficult due to different goals--1. Countries who grow2. Countries who make3. Countries who create4. Countries who coordinate5. Trade negotiations will be shaped by restructured composition of global trade6. Desire to be self-sufficient results in oversupply in some areasIII. Government PolicyA. International trade affects domestic policyB. National governments must look out for their own populations firstC. Governments will need to coordinate policies that affect the international business environmentD. It will become more difficult for governments to achieve a consensusE. Shared Vision as a result of the September 11, 2001 attacks1. A common sense of vulnerability2. A common sense of outrage3. A renewed global sense of collaboration4. Politics of common sense5. A common set of share concernsF. Policymakers need a better understanding of the nature of international trade issuesIV. The Future of International Business ManagementA. International Planning and Research1. Will need to respond to governmental concerns2. Societal concerns will need to be addressed3. Reputation management will grow in importance4. Increased competition will create a need for more niches and specialization5. Companies will learn to prepare for the long term6. Governments will demand that private business practices not increase public costs and serve customers equallyB. International Product Policy1. Environmental concerns will affect product opportunities and existing products2. Worldwide introduction of products will occur more rapidly3. Earlier incorporation of the global dimension into product planning4. Countries wit low production costs will be able to replicate products more quickly and cheaply5. More strategic alliances6. Due to security concerns firms will seek domestic sources of supplyC. International Communications1. More industries are less tied to their current locations and markets2. R&D will be strengthened due to communications advancesD. Distribution Strategies1. Innovative distribution approaches will determine new ways of serving markets2. Firms will need to create own distribution systems able to respond to information technology requirements globally3. Linkages globally will make distribution systems more risky4. Security concerns will continue to slow down distributionE. International Pricing1. International pricing competition will become increasingly heated2. Forward pricing—distributing development expenses over planned sales volume will become more difficult to doV. Careers in International BusinessFocus on CultureEnsuring Student Safety AbroadSummary:With more than 154,000 U.S. students studying abroad, insuring their security has become a major issue. Universities are not only giving advice, but also planning responses to crises.A. Further Training1. Graduate business school programs2. Companies can provide students assistance in studying abroadB. Employment with a Large Firm1. Large MNCs constantly search for personnel2.