Global Opportunities

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Chapter 4
Global Opportunities
Global Entrepreneurship
4.1
Ways to Enter the Global Market
4.2
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4.1

• Describe the role of small business and
  entrepreneurship in todays multicultural, global
  economy.
• Explain why the global market is important.
• Discuss how to recognize and examine current
  trends that provide both domestic and global
  opportunities for entrepreneurs.

Section 4.1 Global Entrepreneurship
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4.1

• The countries of the world are linked in a global
  economy made possible by free trade agreements
  and advances in communications technology.
• International markets present opportunities in
  all regions of the world.

Section 4.1 Global Entrepreneurship
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4.1

• global economy
• exporting
• importing

trade barrier tariff gross domestic product (GDP)
Section 4.1 Global Entrepreneurship
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The Global Economy

• Entrepreneurship plays an important role in
  todays multicultural global society.
•  
• Technological advances and changes in trade
  barriers have created a global economy.

global economy the interconnected economies of
the nations of the world
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The Global Economy

• International markets provide opportunities for
  entrepreneurs to engage in importing and
  exporting goods and services.

importing the buying or bringing in goods from
other countries to sell
exporting the selling and shipping of goods to
other countries
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Trade Barriers Have Fallen

• The World Trade Organization is a global
  coalition of governments that makes the rules
  that govern international trade.

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Trade Barriers Have Fallen

• The World Trade Organization works to eliminate
  or lessen trade barriers and tariffs.

trade barriers a restriction on goods entering
or leaving a country
tariffs a type of trade barrier imposed by a
government as a tax on imported or exported goods
Section 4.1 Global Entrepreneurship
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Global Opportunities

• A nations economy is measured by its gross
  domestic product (GDP).

gross domestic product (GDP) the total value of
all goods produced in a country during the year
Section 4.1 Global Entrepreneurship
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4.1

1. Describe the role of small business and
   entrepreneurship in todays multicultural,
   global economy.

Small businesses and entrepreneurs are going
global to take advantage of the opportunities to
do business with other countries.
Section 4.1 Global Entrepreneurship
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4.1

1. Explain why the global market is important.

The global market holds many opportunities for
growing businesses because it is many times the
size of the U.S. market.
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4.1

1. Discuss how the global market provides domestic
   and global opportunities for entrepreneurs.

Opportunities lie in every part of the world
where customers need and/or want products made in
the United States and where products not found in
the United States can be imported. Huge
opportunities are available in Asia, Latin
America, and Europe and in developing nations.
Section 4.1 Global Entrepreneurship
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4.2

• Describe the benefits and risks of international
  trade.
• Explain how to find the best international
  markets.
• Compare and contrast importing and exporting.

Section 4.2 Ways to Enter the Global Market
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4.2

• To conduct international business successfully,
  you must understand foreign customs and cultures.
  
• Whether you choose to import or export products,
  the international market presents many profitable
  business opportunities.

Section 4.2 Ways to Enter the Global Market
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4.2

• interpreter
• Standard Industrial Trade Classification (SITC)
  codes
• International Business Exchange (IBEX)
• trade missions
• best prospect list

disposable income trade intermediary foreign
joint venture export management company freight
forwarder
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Understanding International Business

• Understanding how other countries conduct
  business is important to your success as an
  entrepreneur.

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Tips for Showing Respect
Dress conservatively and in dark colors.
Do not correct other peoples language.
Be prepared to remove your shoes in some
situations.
Do not comment negatively on food.
Do your homework before a meeting.
Build a relationship before you do business.
Bring your own interpreter.
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Tips for Showing Respect

• It is important to show respect and understanding
  for the cultures of the people with whom you do
  business.
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• An interpreter will help ensure that your
  communications to others are accurate.

interpreter a person who translates one
language into or from another
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Strategies for Entering International Markets

• One good resource in finding an international
  market for your product or service is using
  Standard Industrial Trade Classification (SITC)
  codes.

Standard Industrial Trade Classification (SITC)
codes a system that details the kinds of
products that are traded in specific countries
and how well certain products sell in different
markets
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Other Sources of Help

• There are many sources to help entrepreneurs
  locate the best market for their products or
  services.
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• Entrepreneurs who want to sell online should
  contact the U.S. Chamber of Commerce regarding
  its International Business Exchange (IBEX).

International Business Exchange (IBEX) the
electronic commerce system that allows businesses
to find trading partners and sell products and
services anywhere in the world
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Other Sources of Help

• A small business with products on the
  governments best prospect list will gain the
  chance to go on a trade mission.

best prospect list a list compiled by the
government of products that other countries want
to purchase
trade mission an opportunity offered by the
U.S. government and private agencies to small
businesses to travel to other countries to meet
with foreign agents, distributors, or potential
business partners
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Deciding on a Product to Export

• To be successful as an exporter of consumer
  products, it helps to market to countries to sell
  where people have enough disposable income.

disposable income money people have to spend
after paying for necessary expenses
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Where to Find Import Opportunities
Attend trade shows.
Read trade publications and catalogs.
Research the market.
Talk to potential customers.
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Where to Find Export Opportunities
Establish an e-commerce web site
Establish a foreign joint venture
Use an export management company
Hire a freight forwarder
License foreign businesses to sell your products

Use a trade intermediary
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Deciding on a Product to Export

• An entrepreneur can expand a business into a
  foreign market by using a trade intermediary.

trade intermediary an agency that serves as a
distributor in a foreign country
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Where to Find Export Opportunities

• Some entrepreneurs find it helpful to establish a
  foreign joint venture in order to gain entry into
  a new global market.

foreign joint venture an alliance between an
American small business and a company in another
nation
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Where to Find Export Opportunities

• An entrepreneur wishing to export goods or
  services to another country may employ the
  services of an export management company and/or a
  freight forwarder.

export management an organization that handles
all the tasks related to exporting for a
manufacturer
freight forwarder a company that arranges
shipments and prepares necessary exporting
paperwork
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Things to Consider Before Going Global

• When entrepreneurs think about going global they
  should make sure they have

• solutions
• a new idea
• a market for the product or service
• the ability to handle risk and frustration
• good contacts in other countries

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4.2

1. Describe the benefits and risks of
   international trade.

The benefits of international trade include being
able to purchase goods or services from and sell
them to other countries and to manufacture in
other countries. Countries with unstable
governments provide a riskier due to form of
opportunity there are many barriers and little
government support for business owners.
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4.2

1. Explain how to find the best international
   markets.

The U.S. Census Bureaus Guide to Foreign Trade
Statistics helps in locating sources for various
trade statistics. Standard Industrial Trade
Classification (SITC) codes tell what kinds of
products are traded in specific countries.
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4.2

1. Compare and contrast importing and exporting.

Importing is buying products from other countries
to resell in your own country. Exporting is
selling and shipping goods to other countries.
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International E-Commerce

• Overseas markets represent an enormous economic
  opportunity for e-commerce enterprises, but doing
  business in another country can be complex.
•  
• Entrepreneurs must be concerned with language,
  currency, culture, and country regulations.

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Tech Terms
exchange rate the rate at which one currency is
converted into another   graphic user interface
the design, content, and navigation of a Web
site   import regulations the rules that govern
the types and amounts of products that can be
sold, packing that can be used, and taxation
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Tech Terms
real time the actual time that something takes
place   translation the process of changing one
written communication into a second language with
the same meaning
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