International Business Exam 1 ReviewChapter 1 – Globalization and International BusinessCase : Global Games for Fun and Business- Rapid spreading of the popularity of sports globallyo 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 broadcastingA. The international Job Market- Players not necessarily playing for their home country due to higher pay but home country usually follow favoriteso Increases TV fan bases outside of the teams countryB. 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 advertisingC. National to International Sports Pastimes- Baseball went global after being broadcasted internationally- Stanley Cup, NASCAR and NBA now all widely internationally broadcasted- NFL – sponsoring programs in China and Europe, India- Popular top players often are paid millions in endorsements all over the worldD. Promotion- 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 uniformsE. Sports and You- Some sports just can’t crack into other countrieso Football and cricket  complicated rules- Big International competitions (ex World Cup) bring in tourists and publicizeopportunities of that location, spur building of infastructureF. 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 countriesIntroduction- 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 possibleA. 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 IBo Large and growing portion of world businesso Affect companies small and large: management must consider thiso Where to obtain best inputs and where to sell your output- Understanding the Environment/ Operations Relationshipo Operating abroad is more complex due to social, competitive, physicaland cultural differenceso different government regulationsThe Forces Driving Globalization- measuring globalization is difficulto a country’s interdependence is measured indirectlyo when countries split up what was internal is not external trade- Grown rapidly since the 50s, except in recesssionso 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 globalizationo Economic – trade and investmento Technologicalo Personal Contact – travel tourism telephone traffic personal transfers or funds abroado Political A. Factors In Increased Globalization1. Increase in application of Technology2. Liberation of cross-border trade and resource movements3. Development of services that support international business4. Growing consumer pressures5. Increased global competition6. Changing political situations7. Expanded cross-nation cooperation- In greater detail :1. Increase in application of Technologyo Most tech advances are fairly recent which means not all countries have them perfectedo Increased productivityo More people are able to develop in lui of produceo New products are produced so efficiently, the domestic market is not enough to sell everything – must go abroad2. Liberation of cross-border trade and resource movementso 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 too3. Development of services that support international businesso Arrangements that make it easier to convert currencies 4. Growing consumer pressureso More consumers can afford to buy more luxury products5. Increased global competitiono Dive into markets where competitors are gaining saleso Born-global companies – merging companies for the sole purpose of being able to distribute abroad6. Changing political situationso After the world communism tiff global trade started to grow againo Must be a willingness of governments to support programs to increase efficiency of international trade7. Expanded cross-nation cooperationo 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 countrieso 3. To deal with areas of concern that lie outside the territory of any nation noncoastal areas of the oceans, outer space, Antarctica Need agreements for fishing, ocean oil reserves, mineral rights,piracy shipsThe Costs of GlobalizationA. 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 traditionsB. 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 globalizationo Ex: should brazil stop cutting down trees