2-2
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
2-3
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
2-4
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
2-5
Vital Information in International Business
Basic geographyMarket
characteristics
Culture Politics
2-6
World Economic Activity
• The Triad
– Japan
– European Union
– United States
• The Quad
– Triad
– Canada
2-9
Marketplaces of North America
• United States
• Canada
• Mexico
• Greenland
• Central America
• Caribbean islands
2-11
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
2-15
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
2-16
Advantages of Canada
• Proximity to U.S. market
• Stability of legal and political systems
• Excellent infrastructure and educational systems
2-17
Mexico
• Largest Spanish-speaking nation
• Federal government system
• Participant in NAFTA along with U.S. and Canada
2-18
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
2-19
Marketplaces of Western Europe
European Union Member Countries
Other Countries in Western Europe
2-20
Euro Countries
• Belgium
• France
• Luxembourg
• Germany
• Italy
• Netherlands
• Ireland
• Greece
• Portugal
• Spain
• Austria
• Finland
2-22
Marketplaces of Eastern Europe
• Russia
• Estonia
• Latvia
• Lithuania
• Armenia
• Belarus
• Georgia
• Moldova
• Ukraine
• Azerbaijan
2-24
Marketplaces of Central Europe
• Romania
• Bosnia-Herzegovina
• Croatia
• Macedonia
• Slovenia
• Serbia
• Montenegro
• Albania
• Austria
• Bulgaria
• Czech Republic
• Slovak Republic
• Hungary
• Poland
2-26
Marketplaces of Asia
• Japan
• Australia and New Zealand
• The Four Tigers
• China
• India
• Afghanistan and Central Asian Republics
• Southeast Asian Countries
2-28
Japan
• Second largest economy
• GDP of $4.6 trillion in 2004
• Industries controlled by keiretsu
• GDP growth rate of 1.3 percent
2-31
China
• World’s most populous country
• Communist ideology mixed with market-oriented economic policies
• Heavy FDI
2-32
India
• World’s second most populous country
• Per capita GDP of $620
• British colony until 1947
2-33
Afghanistan and the Central Asian Republics
• Afghanistan
• Kazakhstan
• Uzbekistan
• Tajikistan
• Turkmenistan
• Kyrgyzstan
2-34
Southeast Asian Countries
• Thailand, Malaysia, and Indonesia
• Low labor costs
• Significant FDI in recent years
• Continued recovery from currency crisis in 1997 and 1998
2-35
Marketplaces of Africa and the Middle East
• Africa
– 867 million people
– 54 countries
– Major economies:
• South Africa
• Ivory Coast
• Algeria
• Nigeria
• Middle East
– Cradle of civilization
– Major economies:
• Saudi Arabia
• Kuwait
• UAE
2-38
Marketplaces of South America
• Brazil
• Bolivia
• Uruguay
• Argentina
• Chile
• Colombia
• French Guiana
• Paraguay
• Peru
• Ecuador
• Venezuala