BBB4M – Grade 12 International Business – Chapter 9 – 10 Test

Chapter 9 – 10 Notes

 

Chapter 9: Canada and International business

 

Canada’s Competitive Advantage

  • By comparison on the global scale, Canada has very little that characterizes itself
  • Some say Canada is known for lumber, which is not what Canada wants to be as it’s the least profitable section of a product cycle
  • While Canada has many well known brands identified to be Canadian, there are some brands that identify themselves away from Canada (New York Fries and Boston Pizza)
  • Canada’s Banking Industry
    • Canada’s banks were robust, and didn’t suffer the same drop as American banks did in 2008
    • Canadian banks have bigger reserves than American and European competitors
    • There are strict policies in the Bank Act that dictate how banks should be operated
    • 4/10 of largest NA Banks are Canadian. Many CDN banks have international presence
    • Canadian banks have good capital market divisions to raise money, access markets, manage risk, and purchase or dispose of assets.
  • Canada’s cultural industry
    • Canada has strong cultural industry which includes theatre, visual art, music, and film which not only entertain, but also inform the world of Canada’s identity
    • Canada’s exports of cultural items doubled between 1997 to 2006
    • Cirque du soleil and countless authors like Margaret Atwood are famous worldwide
    • Many movies like “my big fat Greek wedding” are Canadian productions and many films are filmed in Canada
    • Movie producers who produce films in Vancouver is given a 25% tax credit
    • Canadian music artists have also been very successful
    • Live theater is also becoming increasingly popular with Stratford festival and large Toronto broadway productions
  • Canada’s Technology Industry
    • RIM and Blackberry is one of the best known and successful technology firms from Canada
    • Ranked as world’s fastest growing company in 2008
    • Canada also has strong software industry close to $1B with OpenText, Constellation Software, and Corel
    • EA, Radical Entertainment, and Ubisoft also are leaders of Canadian video game industry employing 52,000 jobs.
    • Canada also exceeds in Chemical, Plastics, Environmental tech, Aerospace, engineering, medicine, and logistics

Attracting Foreign Investment

  • Countries seek foreign investments to better themselves in employment opportunities, and economic prosperity
  • Canada attracts foreign investors with trade missions and it’s website “Invest In Canada”
    • This website provides information to educate about Canadian businesses
  • Provincial governments can also hold trade missions to attract investors int specific cities
  • Canada is appealing to investors as it has very little fluctuations in different economic rates
  • A supportive business environment
    • Canada’s strong background in advanced industries, ties with many countries, and stable economic environments make it one of the best countries to invest in out of the G8
  • Gateway to the world
    • Canada and the US share a unique and strong relationship
    • Both economically and for physical convenience, US and Canada make great trading partners
    • NAFTA adds to the success of this trade relationship
    • Vancouver acts as the gateway to Asia as Canada is also a major part Asian trade (APEC)
  • Infrastructure advantage
    • Being the second largest country in the world, Canada also has large and powerful infrastructures for transport, information, and facilities
    • Smart border accord: was an initiative to help travelers cross the borders more efficiently and faster
  • Outstanding employees
    • Canada spends the most on education, and hence can produce some of the best educated employees in the world
    • Canadian Universities to study business are very supreme as well (Western, Rotman, Queens)
    • Canada’s cultural diversity
      • Canadian immigrants bring highly trained individuals as well as bring diversity to the workplace
      • Canada’s racial diversity also benefits us in doing international business
      • Hiring different races into a workplace can bring many points of views to the environment
  • A great place to live
    • Canada ranks 4th in the UN Human Development Index
    • Canada has equal opportunities, safe place, fair justice, and addresses environmental concerns

 

Canada’s Productivity

  • Productivity: is defined as the amount of output with respect to amount of input
  • High GDP means higher productivity
  • USA GDP is higher than Canada because they invest more in businesses, resulting in higher GDP per capita
  • Canada can increase productivity by investing in technology, post secondary education, research, and immigrations
  • The changing Canadian Workplace
    • Canadian workplaces are turning towards higher paying jobs as companies outsources cheaper labour jobs elsewhere
    • Canadian jobs now are different from jobs from a long time ago
    • Entrepreneurship jobs are also increasing
    • Manufacturing jobs are increasingly slimming
    • Some companies like Google are introducing new ways to work combining work and play into the working environment

 

Chapter 10: International Business Trends

 

The global marketplace

  • Trends are moving towards smaller cars as gas prices are ever increasing
  • International Markets
    • China has been a big market for Canada and a vital role in helping Canadian businesses have cheap labour
    • China’s manufacturing industry is enormous and continue to help western businesses drive down costs
    • After NAFTA, access to trade labour in Mexico help balance out the trades with China
    • India also competes with their high end tech industry in Bangalore
  • International Finance
    • In order for markets to exist, there must be consumers willing to buy products being sold
    • Some people also save money and aren’t willing to buy products.
    • The economic growth spiral keeps going in order for foreign countries to continue prosper
    • Foreign business invests abroad, sells things there, government gets money and invests in other nations and leads to global success
    • Downward spiral of US financial crisis
      • Subprime mortgage: a riskier loan to people with lower income buying large items
      • In US, these loans were given out because they knew house prices kept rising
      • If the mortgage defaulted, then the house would be foreclosed or taken back and sold at a higher price to pay off the mortgage
      • The house became a collateral that guaranteed a loan
      • When housing prices began to drop in 2007, defaulting mortgages were in trouble as houses weren’t worth anything
      • Banks refused to lend credits out after and paused economic cycle, hence, the US financial crisis
      • Jobs began to be lost and many financial plans were held off
      • This had little effects on Canada as banks did not invest in subprime mortgages
      • However, as businesses began failing, Canadian corporations and banks received less investment and to some degree impacted their performance
  • International labour
    • The crisis made many people complain about their low wages.
    • Unions and labour disruptions made companies lose productivity
    • Companies later considered outsourcing to other countries where the working culture lets them work well with low wages

 

Global Trends

  • The green revolution
    • Scientists are becoming aware that hydrocarbons will decrease the lifespan on planet earth
    • Businesses are beginning to realize this and keep environment in mind when they do things
    • New energy sources
      • When Copenhagen conference needed countries to reduce carbon emissions, many countries were reluctant as they will have to limit the sales of their most valuable asset, oil.
      • As countries are reluctant to enter renewable energy industries, some countries have included feed in tariffs which guarantees that a company who makes renewable energy is given proper distribution networks and profit
      • Renewable energy sources are becoming an increasing concern for companies as pressure is on for competition and opportunities for tariff rewards are rolling in.
    • New car technology
      • High gas consuming cars are reducing in popularity and replaced by more environmentally friendly cars
      • However, technological barriers for new battery cars still put electric cars behind
      • New technology in hydrogen cars are advancing in research
      • So far, hybrid cars are the best solution
      • New competitors making very small, inexpensive cars are going to dominate future markets
      • They are no frills cars that are designed to only supply the necessary
    • Reducing carbon footprint
      • Countries are becoming increasingly aware of their responsibility for hurting the environment measured by their carbon footprint.
      • They are finding new ways and policies to reduce their carbon footprint as best they ca
  • Protectionism
    • Concerns were raised when the US began trying to save their economy by asking people to buy America
    • This threatened the livelihood of NAFTA and impacted Canadian businesses catered to the US.
  • Border security
    • After 9/11, border security between US and Canada were much tighter
    • This impeded with some travels and caused lots of confusion and time wasted
  • Pandemic protection
    • After many counts of pandemic spreading worldwide due to international shipment,s global governments have been more sensitive about inspecting foreign items for their safety
  • Contaminated products
    • Many products, particularly from China, have been contaminated with foreign items or not fitting with regulations.
    • As a result, other nations are more stringent when it comes to making sure we know what’s inside and tracking the items throughout, often costly and easy to bypass
  • The fluctuating price of oil
    • Fluctuating price of oil impacts every aspect of a business, from materials, transport, and storage, it impacts the price and consumer interest in a product
  • Sustainability
    • The quest for maintain a steady supply of oil and good environment have made many companies go off and change their businesses to suit the criterial needed

 

The global traveller

  • Passports
    • All travelers should bring a passport that says where you are from
  • Visas
    • In order to work of study, you will need to apply for a visa to a specific country
    • Residence visa: permits you to live in a foreign country, usually to accompany a study visa for a foreign school
    • Work visa: will permit you to work in a foreign country, given you have skills that work in foreign country and fit the criteria of your own country
  • Restricted goods
    • When traveling to different countries, you are often faced with restrictions to the amount of what you are allowed to bring with you
    • Duty free stores allow you to buy some restricted items without duties as you cross the borders

 

Working abroad

  • Working abroad might mean the following
    • You work in other countries as part of your job
    • Work in other countries full time
    • Work in other countries part time
    • Advantages
      • Learning new culture and languages
      • Paid a higher salary
      • Valuable to a resume
    • Disadvantages
      • Leave your family
      • Need to learn a new language
      • Different living conditions
      • Unstable governments
    • You might find help from universities with sister universities abroad
    • Foreign affairs and international agreements to help aid permits and coop opportunities