HC BUSN 270 - The Global Borderless Environment

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The Global Borderless EnvironmentThe Global Borderless EnvironmentSlide 3Trading BlocsTaking a Business GlobalClassifying Global Village BusinessesSlide 7Slide 8Slide 9Slide 10EntrepreneurshipEntrepreneurship (cont’d)Contributions of EntrepreneursSelecting the New VentureSlide 15The Business PlanSections In a Business PlanSections In a Business Plan (cont’d)Slide 19Practices of Global CompaniesGlobal DiversitiesGlobal DiversitySlide 23Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–1The Global Borderless EnvironmentThe Global Borderless Environment•Ethnocentrism is OUT! Globalization is IN!–Regarding one’s own group or culture as superior to others (e.g., “Buy American”).•Globalization–Companies conducting business worldwide without boundaries–E-Commerce/E-Business bol.com •Any transaction that occurs when data are processed and transmitted over the Internet as in a business-to-business (b2b) approach.–Wireless communication cell phones, laptopsCopyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–2The Global Borderless Environment The Global Borderless Environment Exchange Exchange RatesRatesExchange Exchange RatesRatesEconomic Economic DevelopmentDevelopmentEconomic Economic DevelopmentDevelopmentInfrastructureInfrastructureInfrastructureInfrastructureEconomic Economic EnvironmenEnvironmenttEconomic Economic EnvironmenEnvironmenttCopyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–3The Global Borderless EnvironmentThe Global Borderless EnvironmentPolitical 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. 3–4Trading BlocsTrading BlocsExhibit 3–1Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–5Taking 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. 3–6Classifying 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. 3–7Classifying Global Village BusinessesClassifying Global Village Businesses•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. 3–8Classifying Global Village BusinessesClassifying Global Village Businesses•Management Contracts–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. 3–9Taking a Business GlobalTaking a Business GlobalExhibit 3–2Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–10Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–11EntrepreneurshipEntrepreneurship•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. 3–12Entrepreneurship (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. 3–13Contributions 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. 3–14Selecting the New VentureSelecting the New Venture•Factors in Selecting a New Venture–Good growth potential and profit opportunities–Previous work experience–Observing others’ mistakes and successes–Finding an overlooked market segment or niche–Systematic search or hobby•Competitive Advantage–Specifies how the organization offers unique customer value.•First-mover advantage involves offering a unique customer value before competitors do.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–15Selecting the New VentureSelecting the New Venture•Five Most Commonly Used Entrepreneurial Strategies–Create a competitive advantage. USP & niche–Maintain innovation.–Lower the costs of developing/maintaining one’s venture.–Defend product/service as it is now.–Create a first-mover advantage.Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–16The Business PlanThe Business Plan•The well prepared business plan answers the following questions:Copyright © 2003


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