International Business and Trade Theories

This course is designed for undergraduate students majoring in business and entrepreneurship

1. International Business and Trade Theory S1 Dina Ayman Tutorial 1 October 2022

2. Intended Learning outcomes (ILO) of tutorial 1… Introduce students to concepts of International business such as globalization, international trade theories Stimulate students thought asking WHYs? Or pauses for thought Introducing Zara case study supported by Youtube as a reference

3. My classes will…………… 1) Deliver case studies and reflect on concepts from lectures through mind-mapping 2) Deliver debates & role-exchanging models to stimulate empathy and emotional intelligence skills 3) Organize teams to invo ke in you communication and leadership skills 4) Deliver individual pause for thought to stimulate critical thinking skills! HOW TO THINK NOT WHAT TO THINK

4. My classes will (continued)….. 5) THE HIGHEST combined scorers for the tutorials will receive a gift to his/her doorstep through amazon. 6) Organize self-reflection sessions. So that you monitor your own progress! U SHOULD BE BETTER THAN URSELF! 7) Expect exhibiting a tutorial identity by adding you to an online group; Linkedin or twitter or simply email 8) Tutorials’ content will be sent to you the day after it is concluded, so don’t overstress now, just take notes but don’t copy each phrase

5. Tips and Tricks on your learning curve….Master anything! Concepts at the beginning will be overwhelming Take your time to process “understand” / “digest” the information Always pause, think & reflect. The Aha moment! Use mindmapping , draw, colours Identify your learning method that makes your comfortable Youtube or reading? Google it

6. What is international Business? (IB) The study of transactions taking place across national borders for the purpose of satisfying the needs of individuals and organizations. Why IB? “it’s a small world after all” “the world became a tiny village”

7. Zara & Nike……Outsourcing their value chain activities (production process) You are ZARA / NIKE manager, WHY is outsourcing important for you? Approximately 1000 people for the design in La Coruña and Barcelona Call centers are based in India “ labour ” is mostly developing countries. WHY? Manufacturing of Zara products is mostly external, as internal manufacturing comprise of 40% while the rest is outsourced from other companies in Europe and Asia.

8. Zara and Nike are examples of…………

9. International trade theories…A comparative approach of economic ideologies…. Mercantilism (16 th ) Absolute advantage (18 th ) Comparative advantage (19 th century) Factor endowment (20 th century) International Product Life Cycle theory Definition Encouraging exports rather than imports to stimulate wealth of nations. The currency was gold & silver or diamond in south Africa, depending on the riches of a nation, or the natural resources a country has Therefore, colonialism to loot other countries’ riches By specializing in certain goods nations can increase their wealth against your competitors Adam Smith is the leader of such thought Specializing in goods whereby a nation has a greatest relative advantage ,* in comparison to others* depending on what? Labour hour per unit of production WHY? David Ricardo is the leader of such thought Not just labour , but expanded to other “factors of production” (FOP) Land, labour , capital and entrepreneurship, So you have better of which, labor or capital China & India have labour , westerns have capital Not only FOP, but extended to “ know-how” People are not labour but HUMAN CAPITAL Why is this important? It fits our era that’s called…………..”

10. Absolute Advantage…Theory and Practice U can produce more using less resources or total production This is called efficiency & specialization of labour Rule is total output per unit labor, (to know how much each will produce) Scenario: (using less resources) Then, who does what now? The idea is who produces more with less resources Country/input Whisky Corn Scotland 2 hours * 1 unit = 2 4hrs *1 unit=4 US 5 hrs * 1 unit = 5 3 hrs * 1 unit =3

11. Comparative advantage...Theory and practice Built on opportunity cost concept ; what did you give up in order to gain goods and services. So, what did you lose in order to gain the other. Comparative advantage = output A / output B in relative to output B/ output A

12. Trade, currency and power…. In trade now, Who dominates the global currency? IS there balance of powers? What is national competitiveness? What about emerging economies? Russia, China etc What's the cost of living crisis in UK now? WHY? Why is there war trade between Europe and China? What did trump do?

13. Additional references for deeper understanding… AlMehairi , R (2021), Retrieved from https://www.youtube.com/watch?v=uBz8Jj4UqGY Professor Dave Explains, (2021). Retrieved from https://www.youtube.com/watch?v=rv6Sq0fmclY Carnegie endowment for international peace. (2021), Retrieved from https://carnegieendowment.org/2021/09/16/u.s.-china-trade-war-has-become-cold-war-pub-85352