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global marketplaces
and business centers
international business, 5th edition
chapter 2
Chapter Objectives 1
• 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
2-2
Chapter Objectives 2
• Describe Western Europe as a major
marketplace and business center in the
world economy
• Discuss the problems facing the
economies of the former communist
countries of Eastern and Central Europe
2-3
Chapter Objectives 3
• 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
2-4
Vital Information in
International Business
2-5
Basic geography
Market
characteristics
Culture
Politics
World Economic Activity
• The Triad
– Japan
– Triad
– European Union
– Canada
– United States
2-6
• The Quad
Figure 2.1a Shares of World’s GDP, 1970
2-7
Figure 2.1b Shares of World’s GDP, 2004
2-8
Marketplaces of North America
2-9
• United States
• Greenland
• Canada
• Central America
• Mexico
• Caribbean islands
Map 2.1 North America
2-10
United States
• Third largest population in world
• Fourth largest land mass
• Largest economy
• 30 percent of world’s GDP in 2004
• Prime market for exports
2-11
The U.S. Dollar
Invoicing
currency
2-12
Flight
capital
Classifying Countries by
Income Levels
2-13
High Income
Middle Income
Lower Income
Least Developed
Figure 2.2 Headquarters of World’s
Largest Corporations in 2005 by Country
2-14
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 world
2-15
Advantages of Canada
• Proximity to U.S. market
• Stability of legal and political
systems
• Excellent infrastructure and
educational systems
2-16
Mexico
• Largest Spanish-speaking nation
• Federal government system
• Participant in NAFTA along with
U.S. and Canada
2-17
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
2-18
Marketplaces of Western Europe
European Union Member Countries
Other Countries in Western Europe
2-19
Euro Countries
2-20
• Belgium
• Ireland
• France
• Greece
• Luxembourg
• Portugal
• Germany
• Spain
• Italy
• Austria
• Netherlands
• Finland
Map 2.2 Western Europe
2-21
Marketplaces of Eastern Europe
2-22
• Russia
• Belarus
• Estonia
• Georgia
• Latvia
• Moldova
• Lithuania
• Ukraine
• Armenia
• Azerbaijan
Map 2.3 Eastern Europe
2-23
Marketplaces of Central Europe
2-24
• Romania
• Albania
• Bosnia-Herzegovina
• Austria
• Croatia
• Bulgaria
• Macedonia
• Czech Republic
• Slovenia
• Slovak Republic
• Serbia
• Hungary
• Montenegro
• Poland
Map 2.4 Central Europe
2-25
Marketplaces of Asia
• Japan
• India
• Australia and New
Zealand
• Afghanistan and
Central Asian
Republics
• The Four Tigers
• China
2-26
• Southeast Asian
Countries
Map 2.5 Asia
2-27
Japan
• Second largest economy
• GDP of $4.6 trillion in 2004
• Industries controlled by keiretsu
• GDP growth rate of 1.3 percent
2-28
Map 2.6 Australia
and New Zealand
2-29
The Four Tigers
2-30
South Korea
Taiwan
Singapore
Hong Kong
China
• World’s most populous country
• Communist ideology mixed with
market-oriented economic policies
• Heavy FDI
2-31
India
• World’s second most populous
country
• Per capita GDP of $620
• British colony until 1947
2-32
Afghanistan and
the Central Asian Republics
2-33
• Afghanistan
• Tajikistan
• Kazakhstan
• Turkmenistan
• Uzbekistan
• Kyrgyzstan
Southeast Asian Countries
• Thailand, Malaysia, and Indonesia
• Low labor costs
• Significant FDI in recent years
• Continued recovery from currency
crisis in 1997 and 1998
2-34
Marketplaces of
Africa and the Middle East
• Africa
– 867 million people
– 54 countries
– Major economies:
• South Africa
• Ivory Coast
• Algeria
• Nigeria
2-35
• Middle East
– Cradle of
civilization
– Major economies:
• Saudi Arabia
• Kuwait
• UAE
Map 2.7 Africa and the Middle East
2-36
Map 2.8 The Middle East
2-37
Marketplaces of South America
• Brazil
• Colombia
• Bolivia
• French Guiana
• Uruguay
• Paraguay
• Argentina
• Peru
• Chile
• Ecuador
• Venezuala
2-38
Map 2.9 South America
2-39