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Anyone believe It

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Fisher-Price recall Chinese-made Toys contaminated with Lead-based Paint Insanity is doing the same thing over and over again and expecting different results ... – PowerPoint PPT presentation

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Title: Anyone believe It


1
  • Anyone believe Its not a Globalized Economy?

Fisher-Price recall Chinese-made Toys
contaminated with Lead-based Paint
Insanity is doing the same thing over and over
again and expecting different results. (Albert
Einstein)
2
INTERNATIONAL COMMERCE___________________________
_________________________________
  • Why are Nike's shoes made in Vietnam but Toyota's
    Tundra trucks are built in San Antonio?
  • __________________________________________________
    ___
  • What is this situation's net on-shoring/off-shori
    ng" result? 
  • Why isnt everyone in Ohio happy with this?
  • Would a law taxing foreign-earned Net Income of
    US-based companies fix problem? 

3
INTERNATIONAL COMMERCE___________________________
_________________________________
  • A Global Balance Sheet might show the US as the
    World's largest Debtor (Borrower) and China as
    the World's largest Creditor (Lender)
  • ______________________________
  • How did this happen?
  • Has this always been the case?
  • Is it something to worry about?
  • What should (could) be done about it?

4
INTERNATIONAL COMMERCE
5
INTERNATIONAL COMMERCE___________________________
_________________________________
Where does our oil come from? What happens if US
becomes energy-independent?
Crude Oil Imports (Top 10 Countries)(Thousand Barrels per Day) Crude Oil Imports (Top 10 Countries)(Thousand Barrels per Day) Crude Oil Imports (Top 10 Countries)(Thousand Barrels per Day) Crude Oil Imports (Top 10 Countries)(Thousand Barrels per Day) Crude Oil Imports (Top 10 Countries)(Thousand Barrels per Day) Crude Oil Imports (Top 10 Countries)(Thousand Barrels per Day)
Country Aug-09 Jul-09 YTD 2009 Aug-08 YTD 2008
CANADA 2,007 2,110 1,928 1,873 1,926
MEXICO 1,057 985 1,126 1,292 1,209
VENEZUELA 1,007 865 1,014 1,146 1,049
NIGERIA 877 858 694 1,035 998
SAUDI ARABIA 745 1,137 1,022 1,533 1,537
IRAQ 500 365 459 663 675
ALGERIA 404 143 253 348 313
ANGOLA 352 320 484 483 512
BRAZIL 269 375 332 169 217
COLOMBIA 260 286 261 247 190
  • Import 269 more from Canada than Saudi Arabia

Source Energy Information Administration, US
Dept. of Energy
6
ENERGY TRIVIA
US is Worlds Third largest Oil Producer (about
10) but Consumes about 24
About one-half of Imported Oil comes from Western
Hemisphere Nations
Nearly 50 of Energy is Produced from Coal and
Natural Gas Nuclear Capacity same as 1996 but
Applications for 26 New Plants pending
Source Energy Information Administration, US
Dept. of Energy
7
Where are Global Markets Demographics
Population Growth Rates
8
Where are Global Markets Demographics
Fertility Rates Number of children born to women
aged 15 to 49
9
INTERNATIONAL COMMERCE___________________________
_________________________________
How do you Compete Internationally?
2008 Chevrolets Trax
1968 Fords World Car
  • Or does Global Competition offer Unique Market
    Segments and Countless Opportunities for Product
    Differentiation?
  • Approaches. (1) Direct (2) Alliances (3)
    Licensing

10
INTERNATIONAL COMMERCE___________________________
_________________________________
EXCHANGE RATES Express Relationship between
Currencies of Transacting Countries
  • 2001 (Strong Dollar) 1 USD 1.18
  • 0.85 USD 1
  • ________________________________________________
    _
  • 2005 (Weak Dollar) 1 USD 0.86 1.17 USD
    1
  • ________________________________________________
    _
  • 2008 (Very Weak Dollar) 1 USD 0.67 1.48
    USD 1
  • ________________________________________________
    _
  • Nov 2009 (No Change?) 1 USD 0.66 1.50 USD
    1

11
Historical Exchange Rates
Monthly Average Exchange Rates US Dollars per
Euro
Concerns about Inflation and US Economys
Recovery have weakened Dollar
  • Cf. Textbook, pp. 118-127

12
INTERNATIONAL COMMERCE___________________________
_________________________________
Exchange Rate Impacts on Exports and Imports
MSRP 84,475 85,000
Cost to Buy in USA Germany
2001 (Strong Dollar) 71,804 100,301
2005 (Weak Dollar) 98,836 73,100
2009 (Very Weak Dollar) 126,713 56,950
13
INTERNATIONAL COMMERCE___________________________
_________________________________
Germanys new finance minister has echoed
Chinese warnings about the growing threat of
fresh global asset price bubbles, fueled by low
US interest rates and a weak dollar. Financial
Times, Nov. 20, 2009
14
  • THE CHINA FACTOR

Did you know China has only one time zone?
15
Another Perspective on Balance of TradeHow does
US/China Relationship look now?
Current Account Balance of Payments As a
Percentage of GDP
16
Which Countries are Growing? Which are not?
Where are Opportunities?
Growth in GDP per capita Percentage change,
annual rate
17
INTERNATIONAL COMMERCE___________________________
_________________________________
  • LEGAL SYSTEM
  • How does Society redress Inequitable Treatment?
  • Contract Enforcement Will Contracts be
    consistently Enforced?
  • Property Rights Do they include Intellectual
    Property?
  • Product Safety and Liability Are there
    standards? What kind of liability?

18
INTERNATIONAL COMMERCE___________________________
_________________________________
  • CULTURE
  • What are a Societys Shared and Learned Values?
    How does it Live?
  • Ethics and Religion How do you reconcile
    conflicting ethics? Can religion influence
    business decisions?
  • Male/Female Roles and Authority What about
    Cultures where Women dont (cant) exercise
    authority?
  • Subtleties of Language, Tone and Manner Does it
    matter how things are said?

19
INTERNATIONAL COMMERCE___________________________
_________________________________
  • GLOBALIZED INSTITUTIONS
  • Laws, Customs and Institutions (Public/Private)
    that Manage, Expedite and Regulate Global Trade
  • World Trade Organization (WTO)
  • World Bank
  • Global-Scale Businesses
  • United Parcel Service (UPS)

20

1907 Delivering documents by Bicycle in
Seattle Today 11th Largest Airline in the
World Processes Daily 2 of the Worlds
GDP Ships more than 13.5 Million
Packages/Day Largest User of Wireless
Technology The Clipboard Since 1996, spent
1 Billion on Supply Chain Management Services,
including Financing, that are available to any
Business or Person wanting to be Globalized
21
INTERNATIONAL COMMERCE___________________________
_________________________________
  • Motivating Forces of Globalization
  • Political Reduced Tariffs
  • Technological Faster, More Reliable
    Transportation and Communication

1950 1990 2000
France 18 5.9 3.9
Italy 25 4.9 3.9
USA 14 4.8 3.9
22
INTERNATIONAL COMMERCE___________________________
_________________________________
23
INTERNATIONAL COMMERCE___________________________
_________________________________
  • EUROPEAN UNION (EU)
  • Total Population Rate Increase 4.1
    (Natural 0.4 Net Migration 3.7)

Natural Increase Rate
Germany -1.7
Italy -0.5
UK 1.4
USA 5.7
India 14.8
24
THE CHINA FACTOR
  • Worlds Leading Producer of Steel, Copper, Coal,
    Aluminum and Cement
  • 2005 Second Largest Oil Importer
  • 2006 Second Largest Auto Market

Richmond, VA 3.42 Guangzhou, China 1.41
25
  • Positive Economic Benefits
  • Lower Prices, Job Creation and Economic Growth
  • Negative Impacts
  • Shifting Job Distribution Diminished Sovereign
    Authority Multiple Tax and Regulatory Standards
  • Is it worth it? Do Benefits outweigh Costs?

26
INTERNATIONAL COMMERCE___________________________
_________________________________
  • "Problem in Australia, chief. Everyone seems to
    be asleep."Cartoon by Leo Cullum
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