INTERNATIONAL BUSINESS CHAPTER 1

Definition:

Includes all business activities needed to create, ship and sell goods and services across national borders.

AKA Global Business International Trade Foreign Trade

Why So Important?

1. Allows you to purchase popular items made in other countries.

2. Provides the following for foreign products:

Raw Materials Parts Demand

3. Allows for new market and investment opps4. Can help improve political relations

Materials, Parts, Demand

Global Dependency: Exists when items

that consumers need and want are created in other countries.

ie: If Zimbabwe had little rain and crops failed and farm animals died they would have to import most of its food from other countries

Global Opportunities

Business both large and small can increase sales and profits

People can invest in businesses to earn for themselves

Improved Political Relations

“Countries that trade with each other are less likely to go to war with each other.”

Improves mutual understanding, communication and the level of respect among people of different nations. Why? Agree/Disagree Create a scenariowith you and a neighbordefending this argument

Fundamentals

Imports Products bought from businesses in other

countries

Exports Products sold in other countries

Trade Barriers Restrictions that reduce free trade among

countries

Types of Barriers

Taxation Dumping

Quotas Laws

Embargos Sanctions

Non-Tariff Barriers Steering Wheels Made in America

IB Environment Factors

Geographic Conditions Climate, terrain, seaports, natural resources

Cultural and Social Factors Customs, behaviors, values

Political and Legal Factors Type, stability and policies of Government

Economic Conditions Economic System Natural Resources Education Technology

IB Skills

History Geography Foreign Language Cultural Awareness Study Skills