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Global Business Environment

5/12/2012 6:59:00 PM

Course Objectives Understand the current and future global business environment, from global and national perspectives Recognize the new competencies required in the 21st century business environment and understand what it will take to master them. Initiate a framework for a strategic plan to incorporate key elements of the international business process, including market research, market entry, financing, legal aspects, logistics, documentation and transportation. Dynamic Context of International Business Common Challenges (Large corporation or SME) Accelerating pace of change Shifting trade flows, trade priorities and trade partnerships (bilateral and multilateral) Trade, investment and international business Boundaries Holistic and Integrated Dynamic Global Sourcing Integration of trade, investment and global commerce Implications

Global power and influence Global integration New players and powers have emerged o China o India o EU o US Global flows: capital, people, trade South-south trade Capital markets Outsourcing and skill flows o Outsourcing/off shoring

o Cross-border mobility and skill flow Demographics

Multilateral institutions WTO UN World Bank UNDP IMF UNCTAD ILO OECD

Pitfalls of protectionism, benefits of engagement Protectionism Engagement through trade International security, enhanced quality of life, equitable environment Trade and competitiveness Trade remains a barometer of economic health Competition can come from across the street or across the globe Competitors are becoming partners as focus shifts to optimizing global supply chains Advent of internet-based technologies: o Improve access to markets o Enhance ability to conduct due intelligence and competitive intelligence

International business, security and intellectual property Challenges of jurisdictions Security Intellectual property Risk/Reward trade-off Green and fair

Growing focus on being environmentally friendly (green has become the brand) Carbon markets, climate change, Kyoto Fair Trade has provided a vehicle for developing countries to market themselves Corporate social responsibility, business ethics

Integrative trade, global supply, chains and virtually everything Integrative trade Global supply chains Trade finance

Through the crystal ball Global business tomorrow Global business environment checklist

Book Information

5/12/2012 6:59:00 PM

Chapter 1 Global Business Environment Global Power and Influence : New Players, New Paradigms o South-South Trade o Capital Markets o Outsourcing and Offshoring o Cross border mobility o Social and Demographic Issues Global Flows: Capital, people and trade Multilateral Institutions o World Bank Group o United Nations o UNDP o IMF o UNCTAD o ILO o OECD Pitfalls of protectionism, benefits of Engagement o Pitfalls of protectionism o Engagement through trade Trade and competitiveness o The classical advantage model o Partners and competitors: The networked environment o Global Trade Zero-sum or win win? International Business, Security and Intellectual Property o Challenges of jurisdiction o Security o Intellectual Property and the Risk/Reward trade off The old fringe goes Mainstread: Green, fair and more o Non-governmental organizations (NGOs) o Carbon Markets o Kyoto Protocol Integrative Trade, Global Supply Chains and Virtual everything o Integrative Trade o Trade Finance International Trade Through the Crystal Ball

Chapter 2 Canadas place in the world International trade its role in Canada o Exports of goods and services o Growth of Canadian exporters o Trade in goods o Impact of Global business on manufacturing o Canada and trade in services o Investment o Global Integration Canadas trading partners o Canada USA o Emerging Markets o Africa? The importance of trade agreements to Canada o History of Trade agreements o Benefits of trade agreements o Multilateral Agreements GATT To WTO o Regional and bilateral trade Nafta Free trade Mercosur o Bilateral trade incentives (LOOK AT ALL BILATERAL TRADES) o Initiatives to promote efficient borders o OECD, APEC, TRTA/CB, LDCs The supporting environment for trade o Export development o Industry Canada o Trade Commissioner Service o Foreign affair and International Trade Canada Chapter 3 Global Trade, Global Business Vision, Innovation and Commitment o NICHE VALUE Strategic preparation. Looking at trends o Commitment to sustainability Navigating the Pitfalls

o Insufficient financing o Lack of knowledge o Lack of competent individuals and insufficient planning o Overextension o Assuming business will be done in English Heart of an Entrepreneur, spirit of a leader Positioning the Organization for the Global Marketplace o Know the process and the players o Transnational o Multinational Before the leap: Evaluating Global Trade Readiness

Chapter 4 The Global Supply Chain Value chains, and supply chains : Linking nations through business and trade o Cost control and efficiency / streamlining of processes o Enhanced service through communication status reporting and related capabilities o Real time status checking of shipments from container to indivudal product o Accelerated receiving of shipments o Improved freight audit processes and procedures o Standardization of documentation, reduction of error rates Trade: Physical, Financial and information Global Supply Chains o Physical supply chain o Financial supply chain o Information supply chain Integrative Trade: o New Paradigm Trade Transactions: Doing businesses across the chains Buyers, sellers, and a cast of many more: Parties to a trade transaction Lights, Camera, action: The mechanics of a trade transaction o Exporter o Importer o Financier o Transporter

o Broker o Agent o Government o Everyone else Import considerations: Supplier development and International Purchasing o Costs, prices, discounts, volumes?? ETC Export Considerations: client development and channel management o Supply chains and logistics Product development Manufacturing Warehousing Marketing Order Shipment Transportation Reporting to customs Delivery to customer Payment process

o Optimizing the Export Process Product development Manufacturing Warehousing Marketing Order processing Shipment preparation Transportation Reporting to customs Delivery to customers Payment processing View from across the table: Seeing the deal as your trading partner does

Chapter 5 - Trade and Technology The transformation of trade o If not on the internet, it doesnt exist o How big is the Internet audience?

o Digital Commerce o Global trade? o Altering the way the world works Communications Collaboration Business development Business Transparency and competitive intelligence Enhanced Global Supply Chain: From Manufacturing to Business process outsourcing o Electronic Data Interchange Value added network (van) Value added services (VAS) Rosetta stone goes digital Services boom Architectural, commercial, education, training, computer, IT, consulting, management consulting.. ETC o Offshore business process outsourcing (BPO) Online purchasing and e-trade platforms o Selling direct and just in time o o o o o Cutting out the middle man o Exactly the right place at exactly the right time o A model of technology application for global competitiveness E-marketplaces: The Middle Man returns o Online goods, services and commodities exchanges General Requirements Ethical Requirements Infrastructure requirements Security requirements Process and organizational requirements Web-marketing requirements o E-procurement o Online tender systems Merx dgMarket SourceCAN o Adhoc supply and e-procurement

Online order received Supplier RFQ published online Suppliers notified Suppliers bid Bids assessment Manufacturing process beings Real-time shipment tracking Delivery and payment Security in the Virtual Marketplace o Security type threats Internal and unintentional Internal and intentional External and network-based Risks associated with e-mail o Determining the required level of network security Analyze and assess the level of: Confidentiality, availability, integrity Determine the requirements Review the current state of the existing security programs, if any Determine what the potential losses could be, including the impact on the companys reputation Determine the cost threshold based on realistic assessment of the security threat to the business Defining the E-business plan o Description o Rationale o Management o Marketing strategy o Resourcing People Equipment Funding Outsourcing Benefits of the e-business Revenue streams

Efficiency gains o Challenge and constraints Technical Legal Organizational changes Resources and timeframes Competitors and collaborators Project evaluation o Project evaluation Chapter 6 Trade in Services Global Service Sector o Types of services Financial Shipping and distribution Professional and Technical Other business services Retail trade Health care Travel, recreation and entertainment Education Modes of Delivery Four ways services are traded o Cross border o Commercial presence o Consumption abroad o Movement of natural persons Role of services in manufacturing Goods vs Services trade: Different circumstances, different approaches o Differences between exporting products and services Intangibles: Skills, Knowledge, and Expertise o Design o Engineering o Training o After-sales service o Marketing a service o Strategies

o Core competencies o Bundling services Valuable proposition: Differentiating your service o Building your value proposition o Desired outcome? Market Research: Implications for services o Opportunity indicators o Market entry strategies Direct exports Indirect exports Partnerships and alliances Business Process outsourcing o What is it? Trade policies and Issues affecting services trade Trade in services checklist

Chapter 7 Cultural Considerations Multicultural Environment o What is culture? Knowing the Rules of the Game o Cross-cultural marketing o Gaining cross cultural competency Cultural Concepts in Context o High context culture o Low-context culture o Relationship with foreign business partners Traditional (Asia, Africa, Middle East, Latin America) Cooperation and harmony Information is physical and hidden Religious belief is entrenched Orientation toward the present Work motivated by need Harmony and nature are valued Patience is common People say one thing and mean something else

Decisions are made to avoid embarrassment or preserve honor Decision making is personal an is often done by consensus Non-traditional (North America and Western Europe) Competition Information is clear Religion is irrelevant Appointments Orientation toward the future

Work motivated by ambition Impatience for change or action People are straightforward and say what they mean Decisions are made on a practical basis. People worry less about safing face or being embarrassed Decision making is impersonal and is often done independently Effective communication o Non-verbal Gestures Touching Facial expressions Space o VERBAL COMMUNICATION Humor Spoken language Learn the language Internationalizing the language o Written communication o Intercultural meetings Room set up Time Refreshments Business Attire Small talk Interpreters

Room dcor Protocol o Face o Eye contact o Silence o Interpreters o Gift giving and protocol Impacts of Culture o Religion o Values and attitudes o Age o Hierarchy o Education o Gender o Behavior o Property and Materialism Intercultural Relationships: Built to last o How relations affect business costs o Personal commitment o Intercultural negotiation o Relationship development o Exchange of information and positions Open ended questions o Persuasion According to the cultural background o Concession and agreement

Chapter 8 - International Business Practices Bribery and corruption: Corrosive, Costly and Cancerous o Transparency International Corruption Perceptions Index o Privacy and confidentiality versus transparency o Facilitation payments When do they become bribes? Exploitative Child Labour: Critical, Complex and compelling o Child labor conventions Human Rights: Trade, Invest or Sanction

o Economic sanctions or not? o Corporate alignment with the Universal Declaration of Human Rights o Fair trade Intellectual Property Rights o When does it extend too far? Codes and Integrity Programs: Theory to Practice o Ethics as a positive impact o Health, safety, and employees rights o Environmental protection and respect for local communities o Human rights o Holding corporations to account o Global Warming o Diversity o Ethical policy development o Professional associations o Directors liability CITP Standards of Ethical Conduct o Responsibilities to the individual o To the organization o To the community and society o To the profession o Conflict of interest Business Ethics Checklist

Chapter 9 Market Research and Marketing Trade without research What and where? o Typical factors that characterize a market Consumer-Level market factors Income level Occupation Age Education, sex, languages, religion and location Socio-political market factors: Economy and fluctuations

o Where does

Government policy and regulations Political stability Internal or regional conflict Health Environmental performance and policy Security and crime rate Access to communications and technology Transportation and utility infrastructure Global and regional cultural differences the info come from?

o Internet search engines o Skills and qualities of a market researcher Market Types o Fast-paced markets o Relationship based markets o Developing markets o Research Steps Screen potential markets Assess targeted markets Draw conclusions Marketing Plan o What is marketing? o Plan for change o Elements of the marketing plan o Description of the business o Reasons for exporting o Sources of market research o Details of the market o Details of the product o Market Entry o Promotion o Logistics o Implementation o Monitoring progress and measuring results Market plan and Elements of Marketing strategy o Strategic planning

o Product, price, place, promotion, planning, personnel, practices, partnerships, positioning, protection, o Adopting market mindset o Revitalizing the organizations view of marketing o THREE HORIZONS OF MARKETING Resources and costs of the marketing activity o Operational resources o Infrastructure resources o Human resources Market research and marketing checklist

PG233 Chapter 10 Entering and Maintaining the Market Market Entry : Time to Sell Market-Entry Options: Direct, Indirect, Investment and Strategic Alliences Identifying and Implementing the Right distribution Mix: Maximizing Coverage, Minimizing conflict Selling to customers: Informed Decisions Distribution Channel management: Mainting the market Chapter Out of sight, out of mind, the importance of communication 11 Trade Finance Managing currencies, Managing cash Elements of trade finance Getting paid Credit insurance and risk Mitigation Trade finance across the supply chain Trade finance: helping to close the deal Banks, ECAs, and IFIs: Trade finance the traditional way Other sources of trade finance Technology: Trade finance evolves Project finance, countertrade, and other flavors

Chapter 12 Logistics and Distribution Competitive advantage Materials management: Reliability and cost-effectiveness

Physical distribution: Options and strategies Transportation: Issues and challenges Modes of transportation: Making the right choice Advanced logistics: New delivery considerations Incoterms: Must-know trade terminology Documentation: requirements and examples Health and safety: Dangerous goods certificate Security: Mitigating risks

Chapter 13 Law, policy, regulation Chapter International Regulatory Framework Trade Policy: National Interest, Global Citizenship Law and international trade Extraterritoriality International Security Rules against dumping and unfair trade practices Technical standards Health and environmental regulations Dispute resolution: Negotiation, Mediation, Arbitration, Legal action Law, Policy and Regulation Checklist 14 International Business Plan The importance of the plan Planning process: Gathering the information Assembling the components of the international business plan Market evaluation Export market penetration: Step by step or full speed ahead? Developing contingency plans and exit strategies The international business play key points

5/12/2012 6:59:00 PM