International Business and Marketing - Coursework Example

International Business and Marketing Table of Contents Introduction 3 Assessment of the Trends Occurring in the Pattern of World Trade 4 Reasons behind the Prominence of Resource-Rich Countries in the Newly Industrialising Economies 10 Implications of Prominence of Resource-Rich Countries for International Business and Marketing 12 Conclusion 15 References 16 Bibliography 19 Introduction International business and marketing is fundamentally described as the execution of broad assortment of business activities that are generally undertaken throughout national borders. It has been apparently observed that this particular conception of international business as well as marketing has gained momentum and attracted different government officials, academics and business executives among others in recent times. This is owing to the reason of increased level of globalisation and extreme market competition. There are certain imperative factors that largely shape the aspect of international business and marketing. The factors include market growth, financial and legal business environment among others (Iyer, 2009). The notion of international business and marketing is often acknowledged as global or international marketing which deals with various business transactions such as exports as well as imports, transfer of goods, technologies and services to other nations (Ajami & Goddard, 2006). The different facets of international business encompass international or global restrictions, superior market competition and large-scale business operations (Francis, 2010). The other characteristics of internal business and marketing comprise incorporation of economies of different nations, decisive role of technologies and commoditisation of products or services globally (Yucel & et. al., 2009). World trade or international trade has been noted to influence broad array of activities that include jobs, fight against poverty and consumption among others. Moreover, it also affects the business environment as well as the relations amid different nations by a significant level. It can be affirmed that the various issues relating to world trade can generate crucial financial problems throughout the globe. It has been viewed that this significant concern i.e. world trade majorly affects the prices of the products and thus imposes extensive impact upon the economies of various nations on a global basis (OECD, n.d.). In this discussion, the assessment of the trends that have been occurring in the pattern of world trade in terms of the prominence of newly industrialising economies entailing resource-rich countries will be taken into concern. Moreover, the reasons behind the prominence of resource-rich nations in the newly industrialising economies and its implications for international business and marketing will also be depicted in the discussion. Assessment of the Trends Occurring in the Pattern of World Trade In order to assess the trends occurring in the pattern of world trade, It has been viewed that the growth or the progression in world trade slowed down its pace in the year 2011 as compared to previous years due to the weakening of economies especially of the developed nations. In this similar context, this deceleration in the growth of world trade ultimately adversely affected the merchandise trade by a greater extent. This can be better understood with the help of this graphical representation. Fig 1: Below-Trend Growth of World Merchandise Trade, 2002-2013 Source: (United Nations, n.d.) Contextually, it has been identified that in the year 2010 the global trade particularly in services became much stable as compared to merchandise trade within the circumstance of shifting trends happening in the pattern of world trade. In this regard, the key service exporters amid the developing as well as transition economies have been noted to attain further improvements in their overall ranking during the years 2006-2010. This can be better explained with the help of the following pictorial illustration that has been provided hereunder. Fig 2: World Trade In Services Source: (United Nations, n.d.) With regard to the assessment of the trends occurring in the pattern of world trade, it has been recognised that international trade has dramatically recovered after experiencing the worldwide financial crisis. Due to certain imperative factors such as increased level of globalisation, nationalisation, changing patterns of business markets and appearance of extreme market competition, the visualisation of the new patterns of world trade has emerged by a significant level. It is anticipated that there will be increasing trends in the pattern of world trade in the upcoming years through considerable transformations in world geography, international business as well as marketing, exports along with imports and other different arenas. By taking into concern the increasing trends in the pattern of world trade, it has been projected that by the year 2020, international trade particularly in service sector will become doubled, amounting to nearly about US$6t. Moreover, exports of China to Europe will expand rapidly and become large in comparison with the exports of the US to Europe. In addition, the trade of the intra-regions belonging to Europe will become significantly greater than the trade of the intra-regions of Asia. Finally, the exports of Europe to Africa as well as the Middle East will become approximately 50% greater than the exports of Europe to the US. From the viewpoint of the geographical changes, the rising trends in the pattern of world trade anticipate that the business markets particularly of the Asia-Pacific area will increase rapidly in terms of global trade by the year 2020. Besides, it has also been projected that trade will be increased by a greater extent in around various regions of the world that include the Middle East, Africa and Asia advocating that the chief geographical locations for the organisations in these regions will change. The rising trends in the pattern of world trade also postulate that there are certain sectors that will make greater contributions towards business trade in the upcoming years. The sectors include transport equipments and machineries that encompass the products relating to consumer electronics such as washing machines, computers, industrial goods and televisions among others (Ernst & Young, n.d.). One of the main trends occurring in the pattern of world trade is the movement or transfer of products from one particular region to the other. It has been observed that the movement of different goods or services within the circumstance of international trade is generally performed through various transportation modes such as airplanes, ships, trains and trucks among others. In this connection, the airplanes as well as the ships are broadly used for carrying huge quantities of freight over large distances, whereas, the trucks along with the trains are mainly used for carrying the goods domestically or to the neighbouring countries. In order to assess the changing trends in the pattern of world trade, it has been viewed that the advancement of airfreight in the form of international competitor is regarded as one of the changing trends in overall trade patterns. In this similar context, due to the changing trends in the pattern of world trade, the modern aircrafts have enhanced dramatically both in terms of their capability to lift huge weights of cargos as well as ability to carry huge quantities of cargos over long distances. The modern aircrafts have been identified to improve their operational functions as the goods can be transported rapidly over large distances through aircrafts as compared to other transportation modes. However, there involve certain drawbacks in employing the aircrafts in transporting the cargos over huge distances. One of the important drawbacks is regarding the cost. The movement of goods through aircrafts is quite expensive in comparison with other travelling modes. Thus, on the basis of the above discussion, it can be stated that the increasing transforming trends in the pattern of world trade impose considerable impact upon the progression of aircrafts as a global competitor relating to the movement of goods or cargos over large distances (Stewart, n.d.). With regard to assess the increasing g trends in the pattern of world trade, it has been viewed that global trade as well as investment has augmented rapidly in present day context due to various value-driven factors. The factors include growth of new as well as chief emerging business markets, need for broad assortment of products, larger incorporation of the world economy, dynamic advancements in the process of supply chain, incessant trade liberalisation and most importantly decrease in communication along with transportation expenditures. Apart from rapid development in the international trade as well as investment, the intensification of global supply chain also increased by a greater extent in recent era. The worldwide economic crisis that occurred in the year 2009 adversely affected international trade in terms of reduction in total exports as well as imports, deterioration in the manufacturing process of various products such as machineries and vehicles among others and shortage in the trade finances. Moreover, apart from global trade, worldwide investment was also observed to be adversely affected due to the crisis. In this regard, the international investment declined by 37% in the year 2009 owing to the reason of lessening in cross-border mergers and acquisitions (M&As). On the basis of long-term projections, it has been suggested that certain shifts as well as changes will be observed in world trade in future. This would be owing to the reason of increased level of globalisation along with internationalisation of business markets, emergence of significant portion of middle-class groups in the emerging markets, introduction as well as development of pioneering technological advancements and additional liberalisation of business trade. On the basis of the above discussion, it can broadly be stated that the increasing trends in the pattern of world trade would ultimately lead towards effective distribution of Gross Domestic Product by a greater extent on a global basis (BIS, n.d.). Reasons behind the Prominence of Resource-Rich Countries in the Newly Industrialising Economies Newly Industrialising Economies (NIEs) refer to those countries that have been experiencing a dramatic breakthrough especially in the manufacturing procedure and export-led financial development. The countries include Hong Kong, South Korea, Singapore and Taiwan among others. These countries are also acknowledged as ‘tiger economies’ due to the reason of their rapid rate of intensification. It has been apparently observed that the governments regularly monitor as well as direct the various operational functions relating to industrial development which are performed by these nations and also encourage the industries to export more manufactured products in different developed as well as richer nations throughout the globe. The decisive facets of NIEs comprise rapid development in the productivity as well as profitability, speedy industrialisation, significant degree of investments along with capital formation and favourable production facilities. There are several reasons behind the growth of the aforementioned countries belonging to NIEs. One of the imperative reasons is population growth. It has been viewed in this context that the augmentation rates particularly in terms of population of these countries relating to NIEs declines more speedily as compared to other regions of the developing world. Moreover, the other reasons include utilisation of imported technologies as well as cheap labours, considerable investments and quickly mounting human capital (Slideshare Inc., 2013). Resource-rich countries within the background of NIEs are typically regarded as those countries that are bestowed with precious natural resources in huge quantities which facilitate them to accomplish significant goals linked with financial development. The different resource-rich countries are Russia, the United States, Saudi Arabia, Canada and Iran among others (International Monetary Fund, 2012). There exist several important reasons or factors behind the prominence of resource-rich nations in the NIEs. The factors encompass fiscal policy, infrastructure along with development and policy interventions among others. From the viewpoint of the factor concerning fiscal policy, it has been noted that the resource-rich countries have paid much attention or concentration towards developing their respective fiscal policies in order to attain their predetermined financial targets. The aforesaid resource-rich countries largely consider the development of fiscal policies as one of the effectual instruments for long-term financial development. Moreover, they strongly believe that greater efficiency as well as productivity growth especially in the field of trade can be attained by developing the fiscal policies at large. Due to the emergence of worldwide financial crisis, the resource-rich countries have had to face several unfavourable circumstances that include high prices in the commodities and low-international interest charges. However, with the introduction as well as the development of the fiscal policies, the countries have mitigated the aforementioned unfavourable situations by a certain extent (Scribd Inc., 2013). Thus, it can be stated that the establishment as well as the implementation of effective fiscal policies is duly regarded as one of the vital reasons for the prominence of resource-rich nations in the NIEs. The other significant reason for the prominence of resource-rich countries in the NIEs is infrastructure and development. In this similar context, it can be stated that infrastructure along with development can be regarded as a key indicator of financial development. It represents various sorts of capital goods that mainly serve different activities of several industries in an efficient manner. A superior infrastructure quality can directly affect the financial development of different nations by a greater degree as it plays a decisive role in developing their internal business and marketing. In this similar concern, it has been noted that the various resource-rich counties are quite able to export several commodities through adequate infrastructures (Rao, 2010). The different policy interventions are also viewed as other key reason behind the prominence of resource-rich countries in the NIEs. These encompass keeping the deposit charges quite low, preserving the borrowing prices in order to raise profits as well as retained earnings and supporting various governmental banks. Additionally, the other policy interventions include making substantial public investments, developing the institutions relating to export marketing and sharing valuable information between public and private business segments (Slideshare Inc., 2013). Finally, the other factors or reasons behind the prominence of resource-rich countries in the NIEs encompass legal reforms, governmental regulations, political stability, entrepreneurship and privatisation of different state-owned enterprises (SOEs) (Rao, 2010). Implications of Prominence of Resource-Rich Countries for International Business and Marketing The prominence of resource-rich countries possesses certain broader implications for international business and marketing. Due to various significant factors such as increased level of globalisation, introduction as well as development of innovative technological advancements, augmented liberalisation and the emergence of numerous multinational companies (MNC), resource-rich nations have been viewed to promote foreign investments as one of the indispensable constituents for financial development. This is owing to the reason that Foreign Direct Investment (FDI) benefits the resource-rich countries in several ways that comprise facilitating them towards effectively accessing international business markets as well as technology, enhancing enterprise development and generating competitive business setting. All these significant factors eventually contribute in creating greater financial development which is regarded as one of the imperative tools for lessening poverty by a considerable level (Amini, n.d.). Research-rich countries often face various challenges that restrict them to make sustainable development in future. In this regard, the challenges include limited access towards international business markets, shortage of domestic capital and low per-capita income. These challenges ultimately impose negative implications for international business and marketing. In order to determine the implications of prominence of resource-rich countries for international business and marketing, it can be stated that resource-rich nations can deliver immense opportunities especially for financial development. Besides, the resource-rich countries can also lift themselves from the significant concern of poverty as they possess substantial amount of precious natural resources (International Monetary Fund, 2012). The implications of prominence of resource-rich countries for international business and marketing can be better understood by emphasising upon the need for conducting international business as well as marketing. In this similar context, there lies the greater requirement of carrying out international business as well as marketing for maintaining effective flow of services, capital and ideas throughout the globe. Moreover, the notion of international business and marketing facilitates the customers with new product choices, enables in improving accessibility of labour, technology along with ensuring capital mobility, delivering challenging opportunities relating to employment and facilitating the acquisition of broad assortment of products. One of the resource-rich countries i.e. the US has been recognised to develop its international business as well as marketing by broadening market-based transactions throughout the globe, increasing the flow of capital and products or services across cross-cultural boundaries or national borders and paying much attention towards international transportation as well as cooperation among others. These imperative factors of the resource-rich nations ultimately make favourable implications for international business and marketing at large. It is worth mentioning that the recent changing patterns in the world trade deeply affect the international business and marketing by a considerable extent. The recent transformations that are observed in international business and marketing include the fact that the involvement of the nations especially in world trade is dramatically shifting, globalisation rate is accelerating and most significantly total world trade is rapidly deteriorating. The implications of the prominence of resource-rich countries for international business and marketing can be explained on the basis of macro and micro-economic levels. From the perspective of macro-economic level, international business and marketing is quite important in terms of balancing trade accounts. With regard to micro-economic level, partaking in international business and marketing can aid different firms to attain economies of scale that cannot be accomplished in domestic business markets. Another significant implication of the prominence of resource-rich countries for international business and marketing is globalisation. Due to the factor of globalisation, the populaces can broadly access different internationalised products or services in several nations belonging to diverse financial backgrounds (Jansson, 2007). Conclusion After acquiring a brief idea about the increasing trends in the pattern of world trade, it can be stated that the businesses need to revise their strategies in order to mitigate different challenges or issues resulting from the changes in world trade patterns. During the last few years, there have been enormous changes in the global trade that include deindustrialisation in several advanced economies and increase in the share of manufacturing exports among others. It has been viewed that the financial development of the resource-rich nations has been considerably affected due to limited access towards international business markets, low per-capita income and improper utilisation of valuable resources due to shifting patterns in the global or international trade. There exist several reasons or factors behind the prominence of resource-rich countries in the NIEs that include formulation of attractive policy interventions, execution of effective fiscal policies and rapid progression in infrastructure as well as development. Moreover, the other aspects include governmental regulations, legal reforms and political stability. The implications of the prominence of resource-rich nations for international business as well as marketing are manifold. One of the major implications which can be viewed for international business and marketing is FDI. This is owing to the reason that the factor of FDI supports the resource-rich countries in strengthening their financial development by a greater extent. Thus, it is to be concluded that the increasing trends in the pattern of world trade will ultimately impose considerable impact upon international business and marketing at large. References Ajami, R. A. & Goddard, G. J., 2006. International Business: Theory and Practice. M.E. Sharpe. Amini, C., No Date. Introduction. FDI and Property Rights in Resource-Rich Countries. BIS, No Date. Trends in World Trade and Investment. Global Context - How Has World Trade And Investment Developed, Whats Next? [Online] Available at: http://www.bis.gov.uk/feeds/~/media/CF74302356974335A4EDA4855FBFAA87.ashx [Accessed January 25, 2013]. Ernst & Young, No Date. By 2020. Trading Places: Changes in Geography, Supply, Sectors. 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