3: Competing in the Global Marketplace
- Page ID
- 2480
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)After reading this chapter, you should be able to answer these questions:
- Why is global trade important to the United States, and how is it measured?
- Why do nations trade?
- What are the barriers to international trade?
- How do governments and institutions foster world trade?
- What are international economic communities?
- How do companies enter the global marketplace?
- What threats and opportunities exist in the global marketplace?
- What are the advantages of multinational corporations?
- What are the trends in the global marketplace?
- 3.0: Introduction
- This page details Mike Schlater's ascent from pizza delivery driver to executive vice president of Domino’s Pizza's international division, emphasizing his role in opening the first international franchise in Winnipeg. It highlights his challenges, including supplier approvals for product quality, and underscores his philanthropic efforts.
- 3.1: Global Trade in the United States
- This page emphasizes the importance of global trade for the U.S. economy, where firms like Apple and Starbucks contribute significantly despite a trade deficit. Trade-related jobs are increasing, but challenges such as terrorism and piracy persist. It also discusses the impact of currency exchange rates, particularly the U.S. dollar's relationship with the yen. A depreciation of the dollar makes imports more expensive while boosting exports.
- 3.2: Why Nations Trade
- This page discusses the benefits and drawbacks of international trade, emphasizing the concepts of absolute and comparative advantages that help nations produce goods efficiently. While trade may lead to job losses and outsourcing, it also promotes economic growth, innovation, and lower prices. Critics express concerns over job security and corporate power. Nevertheless, globalization holds the potential to enhance living standards and enable development opportunities.
- 3.3: Barriers to Trade
- This page discusses barriers to international trade, which are divided into natural, tariff, and nontariff categories. Natural barriers encompass physical distance and cultural differences. Tariff barriers involve import taxes that can protect domestic jobs but discourage free trade. Nontariff barriers include import quotas, embargoes, and regulations that favor domestic products, restricting foreign market access and affecting trade balances.
- 3.4: Fostering Global Trade
- This page discusses how governments and institutions support world trade via regulations and agreements, highlighting the role of antidumping laws in maintaining fair competition. The WTO's facilitation of trade negotiations, such as the Uruguay Round, is key to reducing trade barriers and resolving disputes.
- 3.5: International Economic Communities
- This page discusses international economic communities, which are agreements among nations to facilitate trade and reduce barriers, exemplified by NAFTA and the EU. NAFTA has boosted trade between the U.S., Canada, and Mexico, while the EU fosters economic integration among its members.
- 3.6: Participating in the Global Marketplace
- This page discusses why companies enter the global marketplace, emphasizing various strategies like exporting, licensing, and joint ventures. It highlights companies like General Motors, which succeeded in China, and Walmart, which faced challenges in Germany. The oil industry's response to declining prices is noted, with some firms opting for job cuts while others invest in growth. Additionally, countertrade is emerging as a popular method for conducting international business.
- 3.7: Threats and Opportunities in the Global Marketplace
- This page discusses the challenges and advantages for companies entering foreign markets, focusing on political, cultural, and economic risks. Political nationalism can discourage investment and lead to asset confiscation. Cultural understanding is vital for effective marketing and negotiation. Economic factors like development levels and infrastructure impact market potential and purchasing power. Recognizing these elements is essential for success in global trade.
- 3.8: The Impact of Multinational Corporations
- This page discusses the operations of multinational corporations (MNCs) like Coca-Cola and Walmart, which navigate global markets to optimize production and reduce costs. American brands dominate recognition, yet face increasing competition from Asian and European firms. Companies like Procter & Gamble and Otis Elevator illustrate successful global collaboration and adaptation strategies. MNCs also manage labor costs by relocating production, as demonstrated by Xerox.
- 3.9: Trends in Global Competition
- This page discusses the global marketplace dynamics, highlighting trends like market expansion and resource acquisition, particularly in the context of China's and India's rise. Companies are exploring foreign markets and resources due to limited domestic demand. China's growth from foreign investments is reshaping manufacturing, while India is emerging in tech and services.