IB Notes Essay

Submitted By loreleik
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International Business Defined leadership 6863223
Password: leader
Business: the manufacturing and or sale of goods and or services to satisfy the wants and needs of consumers to make a profit
Transactions: exchange of things of value
Domestic business: most of transactions within borders of the country in which it is based. Relies primarily on products and services made in Canada
International business: the economic system of transactions conducted between businesses located in different countries
Domestic market: all your customers live in the country where your business operates
Foreign market: consists of all the customers in a country other than your own

5 Ways a Business Could Be Considered International
1) Own retail/distribution outlet in diff country
2) Own manufacturing plant in a diff country
3) Export businesses to diff country
4) Import from businesses in diff country
5) Invest in businesses in another country

When a business in Canada develops a relationship with another country they are a “trading partner”. These relationships occur between businesses NOT between countries

History of Canadian Trade 09/09/13
Trade w/ Europe
-Explorers from France & England in the 1600’s landed in Canada
-Traded with 1st nations people, esp Ojibwa & Cree for fur & food, then sent goods back into Europe
-Success of this international business led to the establishment of colonies and outposts in Canada, notably the HBC & North West Company
-Trade grew quickly after permanent settlements were established in Canada in the 1700’s
-Demand for raw materials, (beaver pelts, lumber) grew in Europe, where manufacturing took place
-England defeated France in the Seven Years war, which led to Canada’s reliance on England for finished goods
-Many major cities were established near ports to facilitate export of raw materials and import of finished goods

Trade w/ US
-US declared independence from Britain in late 1700s (Revolutionary War)
-So a decrease in trade occurred
-Need for self reliance
-Invention of steam engine, cotton gin helped rapid growth of American industry
-Industrial Revolution + Independence = American prosperity
-Canada built a trading relationship by supplying raw materials that were needed in the US
-US becomes Canada’s largest trading partner, still true today

Trade w/ Asia
-Canada began trading with Japan after WW2
-At that point, Japan was becoming known for high quality electronics & automobiles
-China has more recently become a trading partner
-Chinese made products one relatively inexpensive, well made and popular with North America

Trade w/ Mexico
-Developed since signing NAFTA 1993
-Goods made in Mexico & US now enter Canada duty free
Duty/Tariff: a tax that is placed on imports in order to make the price of domestic goods competitive
-Duties increase the price of foreign goods
-Mexico has become one of Canada’s top 5 trading partners since 2000

Emerging Markets
Africa:
-African imports to Canada are very low
-Business opportunities limited by unstable governments, lack of infrastructure, rural economies
-Rich in primary resources
-Some countries (Morocco, South Africa) are beginning to emerge as major trading partners

The Middle East:
-Has traditionally centered on oil, but this commodity is not sustainable
-Political instability, lack of industrialization in much of the region has limited trade
-United Arab Emirates (Dubai), Israel & Egypt have established trading relationships with Canadian businesses that do not depend on oil

India:
-Population over 1 billion people
-Workforce generally young and well educated
-Has become major center of outsourcing & manufacturing
-Lack of infrastructure & widespread corruption are persistent problems
-Indian companies are expanding into international markets

Globalization & Interdependence
Globalization: the process whereby national or regional economies and…