Page 96 - Business Principles and Management

Chapter 4 • International Environment of Business

Success tip
EXTENT OF INTERNATIONAL TRADE
Look around and you will see names you are sure are foreign: Honda cars, Sony
tapes, Benetton clothes, and Chanel perfume. But what about names such as Most Americans have a very
Cadbury chocolates, Shell gasoline, 7-Eleven Stores, and Magnavox televisions? limited understanding of the
They are the brand names of products of foreign companies. See Figure 4-1 for factors related to inter-
a list of other common foreign brands. Also, think of familiar American com- national business. To be a
panies such as McDonald’s, General Motors, IBM, Coca-Cola, and Eastman successful international com-
Kodak. A growing portion of their total sales occurs in foreign countries. municator, Americans must
As we move into the new millennium, it is clear that business activities are learn the history, culture,
no longer confined to one country. Foreigners buy American products (comput- and language of the coun-
ers, wheat, airplanes) and services (banking, insurance, data processing) just as tries where they want to do
Americans buy foreign products (petroleum, cars, clothes) and services (vaca- business. Learning a foreign
tions, shipping, construction). American firms make many products in factories language is a good starting
in foreign countries just as foreign companies make products in the United States. point. Even if you do not be-
In a recent year, world trade in goods exceeded $10 trillion. come fluent, people appreci-
Most of the world’s trade takes place among the developed countries of ate the effort you take to
North America, Western Europe, and Japan. Over the past 30 years, countries understand their language
on the western edge of the Pacific Ocean—referred to as the Pacific Rim—have and culture.
emerged as big trading nations. These countries include China, South Korea,
Taiwan, Hong Kong, and Singapore, as shown in Figure 4-2. A list of the major
countries with which the United States trades is shown in Figure 4-3 (see p. 84).
Trade patterns have shifted from goods to services. Although goods remain
dominant, service industries now represent more than one-fifth of international
trade. When service industries emerged as an important segment of the American
economy, more and more trade and investments occurred in businesses such as
tourism, banking, accounting, advertising, and computer services.

FIGURE 4-1 Selected Products That Are Foreign-Owned

BRAND NAME PRODUCT COMPANY COUNTRY

Acer Computers Acer Taiwan

Adidas Footwear Adidas Germany

Burger King Fast food Diageo United Kingdom

Close-up Toothpaste Lever Brothers United Kingdom

Michelin Tires Michelin France

Novotel Hotels Accor France

Nescafe Coffee Nestle Switzerland

Panasonic Television Matsushita Japan

Walkman Personal stereo Sony Japan

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