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Chapter 2: Global Marketplaces and Business Centers International Business, 4th Edition Griffin & Pustay 2-1 ©2004 Prentice Hall 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 1-2 ©2004 Prentice Hall 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 1-3 ©2004 Prentice Hall 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 1-4 ©2004 Prentice Hall Vital Information in International Business Basic geography Market characteristics Culture Politics 1-5 ©2004 Prentice Hall World Economic Activity Triad – Japan – European Union – United States Quad – Triad – Canada 1-6 ©2004 Prentice Hall Figure 2.1 Shares of World’s GDP, 1970 Rest of world 28% European Union 26% 1-7 United States 36% Canada 3% United States Canada Japan European Union Rest of world Japan 7% ©2004 Prentice Hall Figure 2.1 Shares of World’s GDP, 2001 Rest of world 27% United States 32% United States Canada Japan European Union Rest of world Canada 2% European Union 25% 1-8 Japan 14% ©2004 Prentice Hall Classifying Countries by Income Levels 1-9 High Income Countries $9,206+ annual per capita income Middle Income Countries $745 - $9,206 annual per capita income Lower Income Countries $725 or less annual per capita income Least Developed Low literacy rates, Low per capita income Lack of infrastructure ©2004 Prentice Hall High Income Countries Cluster 1: OECD member countries Cluster 2: Kuwait and United Arab Emirates Cluster 3: Hong Kong, Israel, Singapore, Taiwan 1-10 ©2004 Prentice Hall 1-11 ©2004 Prentice Hall Marketplaces of North America United States Canada Mexico Greenland Central America Caribbean islands 1-12 ©2004 Prentice Hall Map 2.1 North America 1-13 ©2004 Prentice Hall United States 3rd largest population in world 4th largest land mass Largest economy 2001 GDP: $10.2 trillion Prime market for lower-income countries trying to raise standards of living through exports 1-14 ©2004 Prentice Hall 1-15 Rest of world Spain Australia Italy Netherlands Switzerland South Korea China Canada Germany United Kingdom France Japan United States # of corporations Figure 2.2 Headquarters of World’s Largest Corporations in 2000 by Country 200 180 160 140 120 100 80 60 40 20 0 ©2004 Prentice Hall Canada 2nd largest land mass 80% of population concentrated in a 100-mile band along U.S./ Canadian border Rich natural resources Trade with U.S. - single largest bilateral trade relationship in world 1-16 ©2004 Prentice Hall Advantages of Canada Proximity to U.S. market Stability of legal and political systems Excellent infrastructure and educational systems 1-17 ©2004 Prentice Hall Mexico Largest Spanish-speaking nation Federal government system Participant in NAFTA along with U.S. and Canada 1-18 ©2004 Prentice Hall Central America and Caribbean Population collectively of 74 million Total GDP of $199 billion Economic development hindered – Political instability – Chronic U.S. military intervention – Inadequate educational systems – Import limitations 1-19 ©2004 Prentice Hall Marketplaces of Western Europe Group 1: European Union (EU) member countries Group 2: Other countries in region 1-20 ©2004 Prentice Hall Map 2.2 Western Europe 1-21 ©2004 Prentice Hall Marketplaces of Eastern and Central Europe Central Europe – – – – – – – – 1-22 Albania Austria Bulgaria Czech Republic Slovak Republic Hungary Poland Romania – – – – – – Bosnia-Herzegovina Croatia Macedonia Slovenia Serbia Montenegro Eastern Europe – 15 countries resulting from disintegration of Soviet Union ©2004 Prentice Hall Map 2.3 Eastern Europe 1-23 ©2004 Prentice Hall Map 2.4 Central Europe 1-24 ©2004 Prentice Hall Marketplaces of Asia 1-25 Japan Australia and New Zealand The Four Tigers China India Afghanistan and Central Asian Republics Southeast Asian Countries ©2004 Prentice Hall The Four Tigers South Korea Taiwan Singapore Hong Kong 1-26 ©2004 Prentice Hall Map 2.5 Asia 1-27 ©2004 Prentice Hall Map 2.6 Australia and New Zealand 1-28 ©2004 Prentice Hall Marketplaces of Africa and the Middle East Africa – 815 million people – 54 countries Middle East – Cradle of civilization 1-29 ©2004 Prentice Hall Map 2.7 Africa and the Middle East 1-30 ©2004 Prentice Hall 1-31 ©2004 Prentice Hall Map 2.9 South America 1-32 ©2004 Prentice Hall