Professional Documents
Culture Documents
2 HISTORY OF CANADIAN
TRADE
1497 JOHN CABOT
1500S
Europeans came to fish for cod off the east coast of Canada (England, Spain,
& Portugal)
Began trading other things with the Aboriginal people for fur
o Valuable beaver fur
Hats
Easy to shape
Waterproof
Durable
EARLY TRADE
From
Europe to Canada
Stylish clothing
Household furniture
Manufactured food
Precision tools
From
Canada to Europe
Fish
Fur
Metals
Wheat
Wood
Canada was dependent of the fur trade and we began to compete with the
U.S. in the fur market
o The North West Company vs. The American Fur Company
1820
Hudsons Bay Company and the North West Company merged under the HBC
name and they became the most powerful company on the continent
1840
Silk replaced fur as the popular fabric as beaver stocks were depleted
Canada had to increase its trade with the U.S. as the fur trade lost
significance
1860
The U.S. government passed a protectionist law that made it illegal for
Canadians to trade furs in the U.S.
1885
1993
NAFTA (North American Free Trade Agreement) created & eliminated tariffs
among U.S., Canada, & Mexico by 2008
Primary
o Raw materials, natural
Manufacturing
o Processing & fabrication sectors
Services
o Do not sell tangible items
Dominant industries in Canada
o Commercial services
o Travel
o Transportation
o Government
One of the fastest growing sectors is consulting services
DISADVANTAGES
1. Support of Non-Democratic Systems
a. Some counties do not consider the welfare of the general population
when making decisions
2. Cultural Identity Issues
a. Products/services can carry cultural messages
b. Many of the products that Canadians use carry/value American
symbols
3. Social Welfare Issues
2.1 ASPECTS OF
INTERNATIONAL BUSINESS
INTERNATIONAL BUSINESS
INTERNATIONAL BUSINESS: all business activities needed by producers to create,
ship, and sell goods & services to consumers
IB involves:
International trade
o Importing & exporting
o Trade missions
o Trade shows
Foreign investment
FOREIGN INVESTMENT
3.1-3.2 INTERNATIONAL
COMPETITIVENESS,
PRODUCTIVITY, & QUALITY
COMPETITIVE ADVANTAGE
Achieved when companies and countries out perform their competitors around
the world by:
o Improved or superior products
o Better pricing
o Higher quality
o Better service
o Uniqueness or profit
o Better access to markets/distribution channels
Can be measured in a variety of ways:
o Market share
o Performance
o Partnerships with suppliers
o Customer demand
o Customer loyalty
o Distribution
o Service
o Basic resources
Support systems
Skilled workers
Total value of all goods and services produced in a country during a specific
period
Includes items produced by foreign-owned companies
Higher GDP = more productivity and a greater ability to compete
internationally
GDP per captia = GDP/Population
Societal characteristics
Entrepreneurship
Government involvement
COMPARATIVE ADVANTAGE
ABSOLUTE ADVANTAGE
Can produce the product at a lower cost or with a high rate of productivity
Can compete more strongly with another country
STANDARD OF LIVING
The way people live as measured by the kinds and quality of goods & services
they can afford
Measured through:
o Average family income
o Ownership of durable goods
o Physicians per 1000 people
o Literacy rate
Income per capita = total income/population
KNOWLEDGE ECONOMY
INTELLECTUAL CAPITAL
RATIONALIZATION
ECONOMIES OF SCALE
Tendency of the cost per item to go down when items are bought or produced
in large quantities
Business has been defined as the manufacture and/or resale of goods and/or
services to meet the needs of a marketplace and to produce a profit
3 things that cause change in business:
1. New technology
2. New processes
3. New attitudes
NEW TECHNOLOGY
INVENTIONS: totally new products that are based on a creative idea
INNOVATIONS: modifications to an invention that take the inventors initial concept
even further
NEW PROCESSES
MANUFACTURING: changes in the way something is made will often result in its
being made faster, better, and/or less expensively. Advances in technology change
the process.
DISTRIBUTION: word processing, e-mail, and the Internet have helped businesses
deal directly with their customers and sometimes eliminate intermediaries, such as
the wholesaler, importer, or even the retailer
INVENTORY CONTROL: used to be a manual process. Now manufacturers are linked
electronically to their sources of raw material, retailers are connected directly to their
suppliers, and service providers can track their customers. Most use Just-In-Time (JIT)
inventory.
MARKETING: mainly process changes. Current trends include: big box retailers.
Market research includes data mining (connecting specific customer characteristics
to their purchases)
ACCOUNTING: technology allows instant reporting of profit, inventory quantities &
value, investment activity and other financial data that helps a company make
decisions while reducing costs, increasing overall profit
NEW ATTITUDES
Some
o
o
o
INFORMATION
INFORMATION AS A COMMODITY
IMPACT OF GLOBALIZATION
Home office
Traveling Office
Hotel Office
To spread the word internationally that we are open for business and have
technical knowledge (we are not just a resource-based country)
Websites such as the Canadian Tourism Commissions website try to
communicate what Canada has to offer
Companies may use various strategies to position them internationally or
globally;
o Franchising
o Starting up wholly-owned subsidiaries
o Purchasing materials from foreign markets
o Joint ventures
o Strategic alliances
FRANCHISE
STRATEGIC ALLIANCE
GLOBALIZATION
ETHNOCENTRIC
POLYCENTRIC
GEOCENTRIC
1.
2.
3.
4.
5.
TRADING BLOCS
Signed in 1995
Interprovincial trade barriers make it difficult to sell products across provincial
boundaries
TRADE ORGANIZATIONS
WORLD TRADE ORGANIZATION (WTO)
G20
Offers loans, advice, and other resources to more than 100 developing
countries in transition
BUSINESS OPPORTUNITY
MISSION STATEMENT
FINDING OPPORTUNITIES
6.2 IDENTIFYING
INTERNATIONAL
OPPORTUNITIES & TRENDS
ENTREPRENEUR: one who organizes, manages, and assumes the risk of starting &
running a business
USA
Encourages individual enterprise but emphasizes the use of public policy and
government to influence the direction of entrepreneurial activity
Makes government a key player, along with other partners, in setting the
framework in which enterprises can flourish
TREND
STAGE
STAGE
STAGE
STAGE
STAGE
1:
2:
3:
4:
5:
HYPER-COMPETITION
CAUSES OF HYPER-COMPETITION
1.
2.
3.
4.
Costing
o Calculating the full landed cost of a product is essential
o LANDED COST: the cost of a product after all transportation, handling,
currency rates, and import changes have been added
Standards
o Manufacturing, labeling, and packaging could be different from
Canadian standards
o Failure to recognize these could be costly
Marketing
o Failure to research, and therefore do not understand their target
foreign market; distribution channels; consumer marketing; the time
required to arrange deals & introduce products
Infrastructure
o Internal transportation, human and material resources, communication
systems, health & safety, bureaucracy, corruption/bribery can all be
potential obstacles to IB
LETTERS OF CREDIT
TRANSPORTATION
HIDDEN COSTS
Currency conversion
Insurance
Travel
Translation services
Phone charges
Interest
Labeling
Local taxes
Etc.
Production
Electrical
Clothing
Ethical
o Sweatshops
REALISTIC MARKET
3 CULTURAL DETERMINATES
1. Geography
a. Things you need to do to survive
2. History
a. Settlement of nations and cultural values
b. Cultural nouns
i. Appearance
ii. Behavior
c. Cultural imperialism
i. When a group or nation imposes its cultural values and customs
3. Religion
a. Think: religious celebrations
LANGUAGE
SILENT LANGUAGE
BUSINESS PROTOCOL
INFRASTRUCTURE AND
SERVICES
Transportation systems
Communication systems
Government services
Other services
The Canadian embassy, high commission, and trade consulates found in foreign
countries are the key institutions for helping Canadian businesses. These government
offices have responsibility for promoting and encouraging safe and friendly trade
relations.
POLITICAL RISK
Political risk refers to the political decisions, conditions and events in a country that
affect business climate.
Financial loss
Time delays
Technical breakdown
Loss of reputation
Loss of market
Political risk analysis tries to identify causes and sources of risk to predict its impact
on investment in a country. Risk management requires a thorough assessment of
potential political situations.
When government policies threaten the business environment, political risk
arises.
Democratic
Totalitarian
Mixed
Economy
POLITICAL INTERDEPENDENCE
OWNERSHIP RISK
OPERATIONS RISK
TRANSFER RISK
Ask questions:
1.
2.
3.
4.
5.
6. Could religious or ethnic pressures lead to civil strife and endanger employees
or property?
What are the chances of political and economic instability in the host country
over the next 3-5 years?
What agreements are in place between the Canadian government and the
host government regarding Canadian investments?
How committed is the current government to the rules of ownership rights, for
example, property and business?
When is the next election and how long will the elected government stay in
place?
CONSEQUENCES OF TERRORISM
Business travel
Security intensification
More documentation needed
JIT systems break down
EVALUATING LEGAL
CONCERNS
Employment laws
Consumer protection laws
Taxation laws
Business liability laws
Property law
Contract law
MARKET ECONOMIES
MIXED ECONOMIES
Law of supply:
As the price of
a product
increases,
producers will
be wiling to
produce more
Law of
demand: As
the price of a
product
increases,
consumers will
demand less of
Aspects of both
Canada
Large land mass and small
population
Depression
2.
Economy slows
Consumers buy less, unemployment is high
Government has less money for social services
Recovery
3.
Prosperity
4.
Recession
WEFI measures:
1.
2.
3.
4.
Size of government
Structure of the economy and use of the markets
Monetary policy and price stability
Freedom to use alternative currencies
GEM
o Global Entrepreneurship Monitor
o Relationship between entrepreneurship and economic growth
Encouraging new business ventures requires an environment:
o Free of red tape
Bureaucratic hurdles
COMMON CURRENCY
Economic partners
Greater price stability
Harmonized long0term interest rates
More stable national currencies
Commitment to control national budget deficits and public debt
Simplifies transactions
Reduces foreign exchange risks
10.1 UNDERSTANDING
BUSINESS ETHICS AND SOCIAL
RESPONSIBILITY
BUSINESS ETHICS: are concerned with the behaviour of businesses in the
treatment of employees, society, stockholders, and consumers.
Code of Ethics
o Behaviour codes that specify what conduct is acceptable or
unacceptable according to a groups principles
Ethical principles determined by a societys history and values
Rule of Law
o Used more by Western countries
o Establishes the standards or rules that citizens are expected to follow
o Canadian values, established in the Canadian Charter of Rights and
Freedoms
Democratic principles
Fundamental freedom and dignity of individuals
The right to a high level of health care and education
The right to be treated without discrimination
ETHICAL IMPERIALISM: the belief that certain forms of behaviour are categorically
right or wrong; people may try to impose their ethical standards a=onto another
company or country
CULTURAL RELATIVISM: the belief that behaviour should be governed by what will
bring about the greatest good for the greatest number of people; different values and
laws all have equal validity
I.E.
Child Employment
o Customary for children to work long hours instead of school in certain
countries
o In North America, it is considered morally wrong
ETHICAL IMPERIALISM
Certain absolute truths apply
everywhere.
Universal values transcend cultures in
determining what is right or wrong.
CSR includes:
o Corporate standards & practices regarding human rights
o Environment
o Human resources
o Community relations
Companies will publish their code of ethics to keep their practices ethical and
transparent
PROACTIVE COMPANIES
PROACTIVE COMPANY: a company that meets or exceeds its economic, legal,
ethical, and social responsibilities
SOCIAL MARKETING: when companies publicize its proactivity, especially social, for
stakeholders to recognize
Pollution
Global warming
o Kyoto Protocol (Kyoto Accord)
o Global representatives met came to an agreement on targets to
combat global warming
o Some governments and corporations believe that reducing CO 2
emissions will negatively affect their economic performance
Proper storage of hazardous materials
Possible wholesale export of Canadas fresh water to other countries
o Unethical
o Could jeopardize the countrys physical environment
CONSUMER ISSUES
Product safety
Quality control
Safety of medications
Think: damage control
EMPLOYEE ISSUES
WORKPLACE AND HEALTH SAFETY
EQUALITY ISSUES
Minorities
o Women
o Minority groups
o Individuals with disabilities
May face ethical dilemmas in efforts to act appropriately in issues of employee
equality without alienating local employees or markets
AFFIRMATIVE ACTION: the efforts to implement equal opportunity in
employment selection and in pay
GLASS CEILING EFFECT: the barrier to those who want to move ahead in
their career but cannot as the result of prejudice, discrimination, and tradition
LABOUR ISSUES
Companies can face conflicting points of views where its workers way of life is
threatened
When labour feels powerless about job security, disruptions occur
Non-union workers more vulnerable that union workers
STOCKHOLDER ISSUES
STOCKHOLDERS/SHAREHOLDERS: owners of a corporation
DUMPING: the practice of selling goods in a foreign country at a price that is lower
than in the country in which they were manufactured
Underpriced/outdated products
Developing countries complain that anti-dumping legislation is a form of
protectionism introduced to help Canadian producers during a global
economic slump
Dumping and similar practices become issues in talks on the liberalization of
trade
CONSUMER ACTIVISM
Website
Made up of volunteers from corporations and the genral public
Offers articles by prominent Canadians on topics dealing with current issues in
business ethics
TAKINGITGLOBAL (TIG)
Not-for-profit organization
Thousands of members from over 190 countries
Vision: to create a community that inspires young people around the world to
create positive change on a local and global level
Creates virtual & physical environments where people are exposed to:
o New thinking
o Diversity of voices
o New opportunities
11.1: INTERNATIONAL
MARKETING STRATEGIES
MARKETING: the sum of all the activities involved in the planning pricing,
promotion, distribution, and sale of goods and services to satisfy consumers needs
and wants
Focuses on the production and sale of goods from one central location
Think local, act global
Take advantage of global marketplace with no intention of setting up a
manufacturing plant in another country
ADVANTAGES
ADVANTAGES
CULTURAL SENSITIVITY: Local people know local customs and can help
tailor advertising messages, package designs, and distribution strategies to
accommodate the local culture.
CONSUMER PROFILES
Demographic Profiles
o Characteristic of and statistics about human populations. They are
obviously medical facts
Age
Gender
Family Lifestyle
Motivational Profile
o Probably the most difficult thing to understand in marketing is why
consumers buy
Thorndykes Pleasure/Pain Theory
o Peoples behaviours are controlled by a desire to either achieve
pleasure or avoid pain
Maslows Hierarchy of Needs
o Arranges needs in ascending order of importance, with the most basic
need at the bottom and, once fulfilled, the next higher level need
becomes more important
SECONDARY DATA
PRIMARY DATA
PRODUCT DEVELOPMENT
Product features
Branding
Packaging and labeling
12.1: LOGISTICS
LOGISTICS
Includes planning for, implementing, and controlling the flow and storage of
raw materials, inventory, finished goods, and related information, from the
point of origin to the point of consumption
1. Sourcing
The finding of materials
A company will purchase supplies from another country because:
o They are not readily available
o Necessary technologies are not developed in the home country
o The best components or products are produced in a foreign country
2. Warehousing and storage
The storage of goods in a companys manufacturing location and the
movement of those goods from start to finish
o Receiving goods into the warehouse
o Transferring goods to a location in the warehouse
o Selecting a particular combination of goods for customer orders or
inputs into manufacturing
o Loading goods for shipment to the consumer or to the production
line
o
o
DISADVANTAGED OF EDIS
CLIMATE
Climate of a region can affect the choice of products to be shipped, the mode
of transport and how the goods are transported
o Very humid countries nee specific and expensive packaging
COST
METHODS
TRUCKS
MARINE
AIR
Most expensive
Fastest mode of transport
May be the only one available
PIPELINES
INTERMEDIARIES
FREIGHT FORWARDERS
CUSTOM BROKERS
JOURNEY
New York to Tokyo