Transcript Chapter 4
Global Opportunities
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Chapter 4 Global Opportunities Global Opportunities 4.1
Global Entrepreneurship 4.2
Ways to Enter the Global Market 2
Global Opportunities 4.1
Describe the role of small business and entrepreneurship in today’s multicultural, global economy.
Explain why the global market is important.
Discuss how to recognize and examine current trends that provide both domestic and global opportunities for entrepreneurs.
Section 4.1 Global Entrepreneurship 3
Global Opportunities 4.1
The countries of the world are linked in a global economy made possible by free trade agreements and advances in communications technology. International markets present opportunities in all regions of the world.
Section 4.1 Global Entrepreneurship 4
Global Opportunities 4.1
global economy exporting importing trade barrier tariff gross domestic product (GDP)
Section 4.1 Global Entrepreneurship 5
Global Opportunities
The Global Economy
Entrepreneurship plays an important role in today’s multicultural global society.
global economy
interconnected the economies of the nations of the world Technological advances and changes in trade barriers have created a
global economy
.
Section 4.1 Global Entrepreneurship 6
Global Opportunities
The Global Economy
International markets provide opportunities for entrepreneurs to engage in
importing
and
exporting
goods and services.
importing
the buying or bringing in goods from other countries to sell
exporting
the selling and shipping of goods to other countries
Section 4.1 Global Entrepreneurship 7
Global Opportunities
Trade Barriers Have Fallen
The World Trade Organization is a global coalition of governments that makes the rules that govern international trade.
Section 4.1 Global Entrepreneurship 8
Global Opportunities
Trade Barriers Have Fallen
The World Trade Organization works to eliminate or lessen
trade barriers
and
tariffs
.
trade barriers
a restriction on goods entering or leaving a country
tariffs
a type of trade barrier imposed by a government as a tax on imported or exported goods
Section 4.1 Global Entrepreneurship 9
Global Opportunities
Global Opportunities
A nation’s economy is measured by its
gross domestic product (GDP)
.
gross domestic product (GDP)
the total value of all goods produced in a country during the year
Section 4.1 Global Entrepreneurship 10
Global Opportunities 1.
4.1
Describe the role of small business and entrepreneurship in today’s multicultural, global economy.
Small businesses and entrepreneurs are going global to take advantage of the opportunities to do business with other countries.
Section 4.1 Global Entrepreneurship 11
Global Opportunities 4.1
2.
Explain why the global market is important. The global market holds many opportunities for growing businesses because it is many times the size of the U.S. market.
Section 4.1 Global Entrepreneurship 12
Global Opportunities 4.1
3.
Discuss how the global market provides domestic and global opportunities for entrepreneurs. Opportunities lie in every part of the world where customers need and/or want products made in the United States and where products not found in the United States can be imported. Huge opportunities are available in Asia, Latin America, and Europe and in developing nations.
Section 4.1 Global Entrepreneurship 13
Global Opportunities 4.2
Describe the benefits and risks of international trade.
Explain how to find the best international markets.
Compare and contrast importing and exporting.
Section 4.2 Ways to Enter the Global Market 14
Global Opportunities 4.2
To conduct international business successfully, you must understand foreign customs and cultures. Whether you choose to import or export products, the international market presents many profitable business opportunities.
Section 4.2 Ways to Enter the Global Market 15
Global Opportunities 4.2
interpreter Standard Industrial Trade Classification (SITC) codes International Business Exchange (IBEX) trade missions “best prospect” list disposable income trade intermediary foreign joint venture export management company freight forwarder
Section 4.2 Ways to Enter the Global Market 16
Global Opportunities
Understanding International Business
Understanding how other countries conduct business is important to your success as an entrepreneur.
Section 4.2 Ways to Enter the Global Market 17
Tips for Showing Respect
Dress conservatively and in dark colors.
Do not correct other people’s language.
Be prepared to remove your shoes in some situations.
Do not comment negatively on food.
Do your homework before a meeting.
Build a relationship before you do business.
Bring your own interpreter.
Section 4.2 Ways to Enter the Global Market 18
Global Opportunities
Tips for Showing Respect
It is important to show respect and understanding for the cultures of the people with whom you do business.
interpreter
a person who translates one language into or from another An
interpreter
will help ensure that your communications to others are accurate.
Section 4.2 Ways to Enter the Global Market 19
Global Opportunities
Strategies for Entering International Markets
One good resource in finding an international market for your product or service is using
Standard Industrial Trade Classification (SITC) codes
.
Standard Industrial Trade Classification (SITC) codes
a system that details the kinds of products that are traded in specific countries and how well certain products sell in different markets
Section 4.2 Ways to Enter the Global Market 20
Global Opportunities
Other Sources of Help
There are many sources to help entrepreneurs locate the best market for their products or services.
Entrepreneurs who want to sell online should contact the U.S. Chamber of Commerce regarding its
International Business Exchange (IBEX)
.
Section 4.2 Ways to Enter the Global Market International Business Exchange (IBEX)
the electronic commerce system that allows businesses to find trading partners and sell products and services anywhere in the world
21
Global Opportunities
Other Sources of Help
A small business with products on the government’s
“best prospect” list
will gain the chance to go on a
trade mission
.
Section 4.2 Ways to Enter the Global Market “best prospect” list
a list compiled by the government of products that other countries want to purchase
trade mission
an opportunity offered by the U.S. government and private agencies to small businesses to travel to other countries to meet with foreign agents, distributors, or potential business partners
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Global Opportunities
Deciding on a Product to Export
To be successful as an exporter of consumer products, it helps to market to countries to sell where people have enough
disposable income
.
disposable income
money people have to spend after paying for necessary expenses
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Where to Find Import Opportunities
Attend trade shows.
Read trade publications and catalogs.
Research the market.
Talk to potential customers.
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Where to Find Export Opportunities
Establish an e-commerce web site Establish a foreign joint venture Use an export management company Hire a freight forwarder License foreign businesses to sell your products Use a trade intermediary
Section 4.2 Ways to Enter the Global Market 25
Global Opportunities
Deciding on a Product to Export
An entrepreneur can expand a business into a foreign market by using a
trade intermediary
.
trade intermediary
an agency that serves as a distributor in a foreign country
Section 4.2 Ways to Enter the Global Market 26
Global Opportunities
Where to Find Export Opportunities
Some entrepreneurs find it helpful to establish a
foreign joint venture
in order to gain entry into a new global market.
foreign joint venture
an alliance between an American small business and a company in another nation
Section 4.2 Ways to Enter the Global Market 27
Global Opportunities
Where to Find Export Opportunities
An entrepreneur wishing to export goods or services to another country may employ the services of an
export management company
and/or a
freight forwarder
.
export management
an organization that handles all the tasks related to exporting for a manufacturer
freight forwarder
a company that arranges shipments and prepares necessary exporting paperwork
Section 4.2 Ways to Enter the Global Market 28
Global Opportunities
Things to Consider Before Going Global
When entrepreneurs think about going global they should make sure they have: solutions a new idea a market for the product or service the ability to handle risk and frustration good contacts in other countries
Section 4.2 Ways to Enter the Global Market 29
Global Opportunities 4.2
1.
Describe the benefits and risks of international trade. The benefits of international trade include being able to purchase goods or services from and sell them to other countries and to manufacture in other countries. Countries with unstable governments provide a riskier due to form of opportunity; there are many barriers and little government support for business owners.
Section 4.2 Ways to Enter the Global Market 30
Global Opportunities 4.2
2.
Explain how to find the best international markets. The U.S. Census Bureau’s
Guide to Foreign Trade Statistics
helps in locating sources for various trade statistics. Standard Industrial Trade Classification (SITC) codes tell what kinds of products are traded in specific countries.
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Global Opportunities 4.2
3.
Compare and contrast importing and exporting. Importing is buying products from other countries to resell in your own country. Exporting is selling and shipping goods to other countries.
Section 4.2 Ways to Enter the Global Market 32
Global Opportunities
International E-Commerce
Overseas markets represent an enormous economic opportunity for e-commerce enterprises, but doing business in another country can be complex.
Entrepreneurs must be concerned with language, currency, culture, and country regulations.
Section 4.2 Ways to Enter the Global Market
Global Opportunities
Tech Terms
exchange rate
the rate at which one currency is converted into another
graphic user interface
the design, content, and navigation of a Web site
import regulations
the rules that govern the types and amounts of products that can be sold, packing that can be used, and taxation
Section 4.2 Ways to Enter the Global Market
Global Opportunities
Tech Terms
real time
the actual time that something takes place
translation
the process of changing one written communication into a second language with the same meaning
Section 4.2 Ways to Enter the Global Market
End of Global Opportunities
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