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©2004 Prentice Hall2-1
Chapter 2:Global Marketplaces andBusiness Centers
International Business, 4th Edition
Griffin & Pustay
©2004 Prentice Hall1-2
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
©2004 Prentice Hall1-3
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
©2004 Prentice Hall1-4
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
©2004 Prentice Hall1-5
Vital Information in International Business
Basic geography Market characteristics Culture Politics
©2004 Prentice Hall1-6
World Economic Activity
Triad– Japan– European Union– United States
Quad– Triad– Canada
©2004 Prentice Hall1-7
Figure 2.1 Shares of World’s GDP, 1970
United States36%
Canada3%
Japan7%
European Union26%
Rest of world28%
United StatesCanadaJapanEuropean UnionRest of world
©2004 Prentice Hall1-8
Figure 2.1 Shares of World’s GDP, 2001
United States32%
Canada2%
Japan14%
European Union25%
Rest of world27%
United StatesCanadaJapanEuropean UnionRest of world
©2004 Prentice Hall1-9
Classifying Countries by Income Levels
High Income Countries$9,206+ annual
per capitaincome
Lower Income Countries$725 or less annual
per capitaincome
Middle Income Countries$745 - $9,206 annual
per capitaincome
Least DevelopedLow literacy rates,
Low per capita incomeLack of infrastructure
©2004 Prentice Hall1-10
High Income Countries
Cluster 1:OECD member countries
Cluster 3:Hong Kong, Israel, Singapore, Taiwan
Cluster 2:Kuwait and
United Arab Emirates
©2004 Prentice Hall1-11
Marketplaces of North America
United States Canada Mexico Greenland Central America Caribbean islands
©2004 Prentice Hall1-12
Map 2.1 North America
©2004 Prentice Hall1-13
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
©2004 Prentice Hall1-14
Figure 2.2 Headquarters of World’s Largest Corporations in 2000 by Country
# o
f c
orp
ora
tio
ns
Un
ited
Sta
tes
Jap
an
Fra
nce
Un
ited
Kin
gd
om
Ge
rma
ny
Ca
na
da
Ch
ina
So
uth
Ko
rea
Sw
itze
rla
nd
Ne
the
rla
nd
s
Italy
Au
stra
lia
Sp
ain
Re
st o
f wo
rld
0
20
40
60
80
100
120
140
160
180
200
©2004 Prentice Hall1-15
Canada
2nd largest land mss 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
©2004 Prentice Hall1-16
Advantages of Canada
Proximity to U.S. market Stability of legal and political systems Excellent infrastructure and
educational systems
©2004 Prentice Hall1-17
Mexico
Largest Spanish-speaking nation Federal government system Participant in NAFTA along with U.S.
and Canada
©2004 Prentice Hall1-18
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
©2004 Prentice Hall1-19
Marketplaces of Western Europe
Group 1: European Union (EU) member countries
Group 2: Other countries in region
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Map 2.2 Western Europe
©2004 Prentice Hall1-21
Marketplaces of Eastern and Central Europe
– Bosnia-Herzegovina– Croatia– Macedonia– Slovenia– Serbia– Montenegro
Eastern Europe– 15 countries resulting
from disintegration of Soviet Union
Central Europe– Albania– Austria– Bulgaria– Czech Republic– Slovak Republic– Hungary– Poland– Romania
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Map 2.3 Eastern Europe
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Map 2.4 Central Europe
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Marketplaces of Asia
Japan Australia and New Zealand The Four Tigers China India Afghanistan and Central Asian Republics Southeast Asian Countries
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Map 2.5 Asia
©2004 Prentice Hall1-26
Map 2.6 Australia and New Zealand
©2004 Prentice Hall1-27
The Four Tigers
South Korea Taiwan Singapore Hong Kong
©2004 Prentice Hall1-28
Marketplaces of Africa and the Middle East
Africa– 815 million people
– 54 countries
Middle East– Cradle of civilization
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Map 2.7 Africa and the
Middle East
©2004 Prentice Hall1-30
Map 2.9 South America