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Block 2: Competing in a global context (Economic & Financial flows…
Block 2: Competing in a global context
Economic & Financial flows
Balance of payments
Current Account
Payments
Imports
Exports
Incomes / Transfers of money
Capital Account
Transfers of Capital to / from abroad
Financial Account
Financial inflows
Claims / Liabilities
Direct Investments
Portfolio Investments
Reserve Assets
Currencies
Commodities
Financial Capital
Foreign Direct Investments
Investments made by companies
International Ops
Internationalisation of Supply Chain
Across multiple countries
Supply Chain Management
Efficiency
Bullwhip Effect
Potentially unstable
Outsourcing
Vertically Integrated
Global Trade Environment
Events i.e. selling
Russia - Oil
Columbia - coffee
Competition among business organisations
Diamond model (Porter, 1990)
Factor conditions
Related and supporting industries
Demand conditions
Structure of firms & rivalry
Comparative Advantage
Relative Comparative Advantage
i.e. Buy from specialised country
Absolute Comparative Advantage
i.e. Buy from cheapest supplier
Five Forces model (Porter, 1980)
Industry competitors
Substitutes
Buyers
Suppliers
Potential Entrants
Tax
Transfer pricing
2 International companies in same group i.e Coca Cola
Arms-Length principle
Transfer mispricing
Does Globalisation allow?
Convergence
Using similar values across business in different countries
Divergence
Takes on local ideas / cultures
Human Resource Management
Essential for 'Globalisation'
United 'Multi-national' workforce
Work closely with other business functions i.e Ops & Marketing
International Finance Reporting Standard
Global Accountancy Standard of IASB