Subject Two.ppt

1、The Economic Environment,Subject One(2),The World Economic Pyramid,*Bases on Purchasing power parity in U.S. $.,SOURCE: U.N. World Development Reports,Less Than $1,500,$1,500-$20,000,More Than $20,000,Annual per Capita Income*,Tiers,Population in Millions,75-100,1,500-1,750,4,000,Major Industrialize

2、d Countries of the World,Market Characteristics,Population demographics（统计） Age distribution, life expectancies（预期寿命）, household size, urbanization. Income Distribution of low, medium, and high incomes. Gross domestic product per capita. Purchasing power parity（购买力平价）. Consumption patterns Income sp

3、ent on necessities and luxuries. Product saturation（饱和） or diffusion（扩散）. Product form differences.,购买力人均GDP,据联合早报引述外电报道，研究显示，中国游客2009年在法国的消费总额为1亿5500万欧元(3亿新元)，平均总花费中，87%花在购买包括鞋和手袋等时尚产品上；他们93%的购物活动是在巴黎或周边进行的。上述报告称，去年中国游客的消费占法国游客总消费的15%，较中国游客2008年的消费增长了47%。,人均GDP排名 2010年单位：美元 9. United States 47,132

4、17. Japan 42,325 18. France 40,591 54 Russia 10,521 95.China, Peoples Republic of 4,283,Market Characteristics (continued),Availability and quality of infrastructure Rail traffic networks for distribution capabilities. Communication systems for marketing. Energy (electrical and fuel) consumption. Fo

5、reign involvement in the economy Degree of foreign direct investment in country or in a specific industry. Rules governing foreign investment. Impact of the economic environment on social development Urbanization, life expectancy, literacy rates, etc. Physical Quality of Life Index (PQLI).物质生活质量指数,R

6、egional Economic Integration,Levels of economic integration Free Trade Area Least restrictive. Goods and services are freely trades among all members. Each country maintains its own trade barriers for nonmembers. Customs Union Members establish a common trade policy with respect to nonmembers. Commo

7、n Market Factors of production mobility is emphasized. A common external tariff is adopted. Economic Union Integration and harmonization of economic and monetary policies is achieved leading to political union.,Free Trade Area,Eliminates tariff and quota barriers among member countries. Each country

8、 is free to set its own tariff and quota barriers against nonmember countries. Can be formed for certain classes of goods or services only.,Customs Union Area,Tariff and quota barriers among member countries are eliminated. Member countries establish common tariff and trade barriers against nonmembe

9、r countries. Tariff revenues are shared among members according to a prescribed formula.,Common Market Area,No trade barriers among member nations. No restriction on the movement of labor, capital, or technology across borders. Member countries establish common tariff and trade barriers against nonm

10、ember countries.,Economic Union,Has all the characteristics of a common market. Harmonizes taxation. Harmonizes government spending. Harmonizes monetary policies. Establishes a common currency.,European Integration,Expected economic growth from: Eliminating transaction costs. Economies of scale will

11、 be attained as production becomes concentrated. More intense competition from EU companies. Operations from one country can be freely expanded to other countries. Products can be freely sold across borders to millions of new consumers. There is a “Fortress Europe” fear.,North America Integration,Is

12、 for purely economic reasons. There are no constituencies for political integration. NAFTA. “Maquiladoras”.（边境加工区）,NAFTA,The North American Free Trade Agreement (NAFTA) created the worlds largest free market. 390 million U.S., Canadian, and Mexican consumers and a total output of $10 trillion.,Free

13、Trade Area of the Americas,An agreement to form a regional trading zone stretching from Point Barrow, Alaska to Patagonia, Argentina.,Integration in Asia,Association of Southeast Asian Nations (ASEAN) East Asia Economic Group Asia-Pacific Economic Cooperation (APEC) South Asian Association for Regio

14、nal Cooperation (SAARC),Integration in Africa and the Middle East,Economic Community of West African States (ECOWAS) Afro-Malagasy Economic Union East Africa Customs Union West African Economic Community Maghreb Economic Community Gulf Cooperation Council (GCC),The International, Political, and Lega

15、l Environment,Subject One(3),Political and Legal Environment,Home country political and legal environment The Environmental Superfund Intellectual property rights Gray markets,Political and Legal Environment,Embargoes and sanctions “government actions to distort the free flow of trade in goods, serv

16、ices, or ideas for adversarial and political purposes.,The U.S. Export Control System,Determinants for Export Controls,National Security Foreign Policy Short Supply Nuclear Nonproliferation,Should a Given Product Be Exported,To a Given Country,To a Given End-user?,For a Particular End-user?,Decision

17、 Steps in the Export Licensing Process,Import Controls,Tariffs Voluntary restraint agreements Quota systems Administrative problems Monetary and social costs to consumers while benefiting protected groups. Downstream change in the composition of imports to circumvent narrowly defined protectionist m

18、easures. The failure of protected firms become more efficient and competitive.,International Business Behavior and Regulations,Regulating international business behavior Home countries may implement special laws and regulations to ensure that the international business behavior of firms headquartere

19、d within them is conducted within moral and ethical boundaries considered appropriate. Methods Boycotts Antitrust Laws Bribery and Corruption Laws,Risk,Political risk The risk of loss when investing in a given country caused by changes in a countrys political structure or policies. Types of politica

20、l risk Ownership risk (property and life) Operating risk (ongoing operations interference) Transfer Risk (in shifting funds between countries),Go Home Foreigners,Political Risk,Forms of Host Country Controls,Expropriation Taking of private property with compensation. Confiscation Taking of private p

21、roperty without compensation. Domestication To gain control over foreign investment through demanding partial transfer of ownership and imposed regulations. Raise tax rates. Price controls.,Legal Differences and Restraints,The two major legal systems Common law Based on tradition and less dependent

22、on statutes and codes than on precedent and custom. Code law Based on a comprehensive set of written statutes that spell out legal rules explicitly.,International Environment,International Politics Political relations and conflicts between countries can have a profound impact on firms trying to do b

23、usiness internationally. If relations between countries improve, business can benefit. International Law No enforceable body of international law exists. Firms are subject to home and host-country laws. Areas of cooperation among nations bilateral treaties guaranteeing fair treatment patent and trademark protection,