International Business Exam 1 Review Chapter 1 Globalization and International Business Case Global Games for Fun and Business Rapid spreading of the popularity of sports globally o First World Cup in Africa 2010 first Commonwealth Games in India 2010 First Olympics in South America etc Most globalized business in the world people want to see the best not just the best from their home country Increase in international broadcasting A The international Job Market Players not necessarily playing for their home country due to higher pay but home country usually follow favorites o Increases TV fan bases outside of the teams country B How the ATP Courts Worldwide Support ATP Association of Tennis Professionals Not enough interest in one country to follow all matches for tennis pros travel the world for competitions International players mean international tv broadcasting means international advertising C National to International Sports Pastimes Stanley Cup NASCAR and NBA now all widely internationally broadcasted Baseball went global after being broadcasted internationally NFL sponsoring programs in China and Europe India Popular top players often are paid millions in endorsements all over the Lots of popular teams even sell their brand around the world Nike campaign to be European soccer top seller now sells more internationally than in US Sponsors from all over get brand name on uniforms Some sports just can t crack into other countries o Football and cricket complicated rules Big International competitions ex World Cup bring in tourists and publicize opportunities of that location spur building of infastructure F Problems and Exceptions Big international competitions usually cause debt in that location what to do with arena when its over Some hate losing great players or even teams to other countries world D Promotion E Sports and You Introduction Globalization widening set of interdependent relationships among people from different parts of a world that happens to be divided into nations o Eliminating barriers to make world wide trade possible Products can be composed of parts from all over the world Chilean Miners rescue 2010 machines and technology from US Germany Japan and South Korea all made the rescue possible A How Does International Business Fit In Allows for more variety better quality or lower prices International Business all commercial transactions including sales investments and transportation that take place between two or more countries o Make connections btwn supplies and markets possible The Study of IB o Large and growing portion of world business o Affect companies small and large management must consider this o Where to obtain best inputs and where to sell your output Understanding the Environment Operations Relationship o Operating abroad is more complex due to social competitive physical and cultural differences o different government regulations The Forces Driving Globalization measuring globalization is difficult o a country s interdependence is measured indirectly o when countries split up what was internal is not external trade Grown rapidly since the 50s except in recesssions o Restrictions on imports have been declining Many people lack resources to go international most still sold domestically A T Kearney Foreign Policy Globalization Index globalization on a specific scale Ranks among 4 dimensions of globalization o Economic trade and investment o Technological o Personal Contact travel tourism telephone traffic personal transfers or funds abroad o Political A Factors In Increased Globalization 1 Increase in application of Technology 2 Liberation of cross border trade and resource movements 3 Development of services that support international business 4 Growing consumer pressures 5 Increased global competition 6 Changing political situations 7 Expanded cross nation cooperation In greater detail 1 Increase in application of Technology o Most tech advances are fairly recent which means not all countries have them perfected o Increased productivity o More people are able to develop in lui of produce o New products are produced so efficiently the domestic market is not enough to sell everything must go abroad 2 Liberation of cross border trade and resource movements o Regulations have lowered because citizens what the lower prices or variety competition from abroad spurs the need for internal efficiency hopefully their country will lower barriers too 3 Development of services that support international business o Arrangements that make it easier to convert currencies 4 Growing consumer pressures 5 Increased global competition o More consumers can afford to buy more luxury products o Dive into markets where competitors are gaining sales o Born global companies merging companies for the sole purpose of being able to distribute abroad 6 Changing political situations o After the world communism tiff global trade started to grow again o Must be a willingness of governments to support programs to increase efficiency of international trade 7 Expanded cross nation cooperation o A need for cooperation due to o 1 To gain reciprocal advantages Sign treaties join orgs agreements etc Allows use of port use flyover right protect property intellectual or physical o 2 To attack problems jointly that one country acting alone cannot solve Help pay for a project that will benefit you as well Share interest rate ideas etc to make sure not shutting out competition and destroying both countries o 3 To deal with areas of concern that lie outside the territory of any nation Need agreements for fishing ocean oil reserves mineral rights noncoastal areas of the oceans outer space Antarctica piracy ships The Costs of Globalization A Threats to National sovereignty Will we endanger local business Local objectives and policies regulations on labor conditions and the likes drive businesses abroad which endangers jobs Some small economies may be taken advantage of from the large companies that they depend on for supplies Losing culture and traditions B Economical Growth and Environmental Stress Downside depleting natural resources destroying environment pollution Competition makes people seek cleaner and more efficient practices What s good for your country may not be good for globalization o Ex should brazil stop cutting down trees to save the environment while also cutting countless jobs C Growing Income Inequality and Personal Stress I I has been on the rise Goal is to maximize