International Business, 6th Edition

chapter 2
Global Marketplaces
and Business Centers

2-1 Griffin & Pustay Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
 Chapter Objectives

• Evaluate the impact of the political and

economic characteristics of the world’s
various marketplaces on business
• Appreciate the uses of national income
data in making business decisions
• Discuss North America as a major
marketplace and business center in the
world economy

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 Chapter Objectives (continued)

• Describe Western Europe as a major

marketplace and business center in the
world
• Discuss Asia as a major marketplace and
business center in the world economy
• Assess the development challenges
facing African, Middle Eastern, and South
American countries

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 The World Economy

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2-4
 Marketplaces of North America

• United States
• Canada
• Mexico
• Greenland
• Countries of Central America and the
Caribbean
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 United States

• Third largest population in world

• Fourth largest land mass
• Largest economy
• 27 percent of world’s GDP in 2006
• Prime market for exports

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 The U.S. Dollar

Invoicing Flight
currency capital

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 Canada

• Second largest land mass

• 80 percent of population concentrated
along U.S./Canadian border
• Rich natural resources
• Trade with U.S. - single largest
bilateral trade relationship in the world

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 Advantages of Canada

• Proximity to U.S. market

• Stability of legal and political
systems
• Excellent infrastructure and
educational systems

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 Map 2.1 North America

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 Figure 2.2 Headquarters of World’s
Largest Corporations in 2007 by Country

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 Mexico

• Largest Spanish-speaking nation

• Federal government system
• Participant in NAFTA along with
U.S. and Canada

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 Central America and the Caribbean

• Economic development hindered by:

– Political instability
– Chronic U.S. military intervention
– Inadequate educational systems
– Weak middle class
– Poverty
– Import limitations

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 Marketplaces of Western Europe

European Union Member Countries

Other Countries in Western Europe

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 Map 2.2 Western Europe

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 Euro Countries

• Belgium • Ireland
• France • Greece
• Luxembourg • Portugal
• Germany • Spain
• Italy • Austria
• Netherlands • Finland

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 Marketplaces of Eastern Europe

• Russia • Belarus
• Estonia • Georgia
• Latvia • Moldova
• Lithuania • Ukraine
• Armenia • Azerbaijan

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 Marketplaces of Central Europe

• Romania • Albania
• Bosnia-Herzegovina • Austria
• Croatia • Bulgaria
• Macedonia • Czech Republic
• Slovenia • Slovak Republic
• Serbia • Hungary
• Montenegro • Poland

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 Map 2.3 The Former Soviet Union

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 Marketplaces of Asia

• Japan • India
• Australia and New • Afghanistan and
Zealand Central Asian
Republics
• The Four Tigers
• Southeast Asian
• China
Countries

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2-20
 Map 2.4 Asia

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 Japan

• Second largest economy

• GDP of $4.3 trillion in 2006
• Industries controlled by keiretsu
• GDP growth rate of 1.6 percent
(since 2000)

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 Map 2.5 Australia
and New Zealand

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 The Four Tigers

South Korea Taiwan

Singapore Hong Kong

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 China

• World’s most populous country –

approximately 1.3 billion people
• Communist ideology mixed with
market-oriented economic policies
• Heavy FDI

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 Figure 2.3 Annual FDI Flows to
China 1982-2006

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 India

• World’s second most populous country

• Per capita GDP of $820

• British colony until 1947

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2-27
 Southeast Asian Countries

• Thailand, Malaysia, and Indonesia

• Low labor costs
• Significant FDI in recent years
• Continued recovery from currency
crisis in 1997 and 1998

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 Marketplaces of
Africa and the Middle East

• Africa • Middle East

– 867 million people – Cradle of
civilization
– 54 countries
– Major economies:
– Major economies:
• Saudi Arabia
• South Africa
• Kuwait
• Ivory Coast
• UAE
• Algeria
• Nigeria

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 Map 2.6 Africa and the Middle East

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 Map 2.7 The Middle East

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 Marketplaces of South America

• Brazil • Colombia
• Bolivia • French Guiana
• Uruguay • Paraguay
• Argentina • Peru
• Chile • Ecuador
• Venezuela

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 Map 2.8 South America

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publishing as Prentice Hall