The Global Environment and EntrepreneurshipLearning OutcomesLearning Outcomes (cont’d)The Global Borderless EnvironmentThe Global Borderless Environment (cont’d)Slide 6Trading BlocsTaking a Business GlobalClassifying Global Village BusinessesClassifying Global Village Businesses (cont’d)Slide 11Taking a Business Global (cont’d)PowerPoint PresentationEntrepreneurshipEntrepreneurship (cont’d)Contributions of EntrepreneursSelecting the New VentureSlide 18The Business PlanSections In a Business PlanSections In a Business Plan (cont’d)Slide 22Practices of Global CompaniesSlide 24Global DiversitiesGlobal DiversitySlide 27Slide 28PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookThe Global EnvironmentThe Global Environmentand Entrepreneurshipand EntrepreneurshipThe Global EnvironmentThe Global Environmentand Entrepreneurshipand EntrepreneurshipChapter 3Chapter 3Chapter 3Chapter 3Copyright Copyright © © 2003 South-Western/Thomson Learning. All rights reserved.2003 South-Western/Thomson Learning. All rights reserved.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–2Learning OutcomesLearning OutcomesCopyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–3Learning Outcomes (cont’d)Learning Outcomes (cont’d)Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–4The Global Borderless EnvironmentThe Global Borderless Environment•Ethnocentrism–Regarding one’s own group or culture as superior to others (e.g., “Buy American”).•The Global Village–Companies conducting business worldwide without boundaries–E-Commerce/E-Business•Any transaction that occurs when data are processed and transmitted over the Internet as in a business-to-business (b2b) approach.–Wireless communicationCopyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–5The Global Borderless Environment (cont’d)The Global Borderless Environment (cont’d)Exchange Exchange RatesRatesExchange Exchange RatesRatesEconomic Economic DevelopmentDevelopmentEconomic Economic DevelopmentDevelopmentInfrastructureInfrastructureInfrastructureInfrastructureEconomic Economic EnvironmenEnvironmenttEconomic Economic EnvironmenEnvironmenttCopyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–6The Global Borderless Environment (cont’d)The Global Borderless Environment (cont’d)Political Political InstabilityInstabilityPolitical Political InstabilityInstabilityPolitical RiskPolitical RiskPolitical RiskPolitical RiskGovernment Government Trade Trade AgreementsAgreementsGovernment Government Trade Trade AgreementsAgreementsGovernmentGovernmentEnvironmentEnvironmentGovernmentGovernmentEnvironmentEnvironmentCopyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–7Trading BlocsTrading BlocsExhibit 3–1Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–8Taking a Business GlobalTaking a Business Global•Global Trade Agreements–General Agreement on Tariffs and Trade (GATT)–North American Free Trade Agreement•United States, Canada, and Mexico–Association of Southeast Asian Nations (ASEAN)•Trade Alliances–European Union (EU)•A single market without national barriers to travel, employment, investment, and trade •Euro (€): single currency for the EU.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–9Classifying Global Village BusinessesClassifying Global Village Businesses•Global Sourcing–The use of worldwide resources (outsourcing).•Importing–Domestic firm buys products from foreign firms and sells them in its home market.•Exporting–Domestic firm sells its locally-made products to foreign buyers in overseas markets.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–10Classifying Global Village Businesses (cont’d)Classifying Global Village Businesses (cont’d)•Licensing–One company allows another company to use its assets (intellectual property) for a fee.•Brand name, trademark, technology, patent, and copyright–Franchising•For a fee, a franchiser provides the franchisee with the assets and support to conduct a business using the franchiser’s business model for its operations.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–11Classifying Global Village Businesses (cont’d)Classifying Global Village Businesses (cont’d)•Contracting–A company has a foreign firm manufacture the goods while retaining the marketing process.•Joint Venture–A enterprise that is created when firms agree to share in its ownership.• Direct Investment–Investment that occurs when a company builds or purchases operating facilities (subsidiaries) in a foreign country.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–12Taking a Business Global (cont’d)Taking a Business Global (cont’d)Exhibit 3–2Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–13Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–14EntrepreneurshipEntrepreneurship•New Venture Creation–The process of starting and operating a new business or new line of business.•Entrepreneur–One who starts a new small business.•Intrapreneur–One who starts a new line of business within a large organization.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–15Entrepreneurship (cont’d)Entrepreneurship (cont’d)•Small Business Defined–A business that is independently owned and operated, is not dominant in its field, and has annual receipts not in excess of $500,000.•Of the 600 million businesses in the U.S., 99% are small businesses and 80% are family businesses.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–16Contributions of EntrepreneursContributions of EntrepreneursSupport of Large Support of Large BusinessesBusinessesSupport of Large Support of Large BusinessesBusinessesInnovationInnovationInnovationInnovationJob Creation and Job Creation and Economic GrowthEconomic GrowthJob Creation and Job Creation and Economic GrowthEconomic GrowthSocietySocietySocietySocietyCopyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–17Selecting the New VentureSelecting the New Venture•Factors in Selecting a New Venture–Good growth potential and profit