globalEDGE Blog Archive November 2015

2015 has been a tough year for international trade, as new statistics show this year is on pace to be the worst year for trade since 2009. The numbers were a surprise compared with earlier projections, and have led to worries among some economists about the health of the global economy. The IMF had expected a 3.1% increase in trade volume compared to last year, but through three quarters of 2015, trade has only grown 0.7%. Analysts have highlighted lower demand from the Eurozone as well as an economic slowdown in China as major factors in the low trade numbers.

El Niño is a weather and climate phenomenon which is characterized by unusually warm sea and surface temperatures and can be measured by ocean temperatures and atmospheric convection activities. The change in the sea temperature can affect the timing of when the heat transfers from the oceans into the atmosphere, which can affect temperature and rainfall patterns. Historically, El Niño has immediately impacted the agriculture sector, but its effects can also be felt later in the global marketplace.

The ever-changing oil industry is currently facing a downturn, as the price of oil per barrel has been cut roughly in half since June 2014, the lowest since the economic recession in 2009. Over the last decade, oil prices were normally around $90 or $100 per barrel. On Tuesday, the international standard of Brent crude oil was trading at around $46 per barrel while American oil was trading at around $43 per barrel.

Over the past month, there has been a surge in global terrorism. Major terrorist incidents include the downing of a Russian plane over the Sinai Peninsula, deadly assaults on Paris, and suicide bombings in Turkey, Lebanon, and Nigeria. There have also been several other attacks, mainly concentrated across the Middle East and Northern Africa. While these devastating attacks are first and foremost a humanitarian issue, they undoubtedly have business consequences, ranging from physical damage to property to potential long term alterations in consumer behavior. This being said, what impact does terrorism, and more specifically the recent surge in global terrorism, have on the global travel and tourism industry?

For businesses seeking to further understand what it takes to expand operations internationally, CORE™ does just this for you. CORE™ is a self-assessment tool that will allow you to determine your company’s readiness to operate internationally and export a particular product. Upon completion of a questionnaire, CORE™ is able to identify a company’s strengths and weaknesses concerning exporting. These responses by CORE™ are separated into organizational readiness and product readiness to portray a company’s international readiness for the firm as a whole, or for an individual product.

Do you need to find the U.S. Export Assistance Center (USEAC) that covers a certain ZIP code area in the United States? Then this new globalEDGE resource is just what you need. The new ‘Look Up’ tool, located in the Trade Contacts page of the Insights by State section, helps you search for any ZIP code within the U.S., and provides you with the contact information of the USEAC office(s) that covers that particular ZIP Code area. There are more than 100 USEACs located across the United States, and the centers assist U.S. businesses that are new to exporting, want to expand to additional export markets, or want to increase their market share in existing markets. USEACs also connect local U.S. companies with additional international trade resources, as well as work closely with the Small Business Administration (SBA) and the U.S. Export-Import Bank to counsel clients on export finance options.

One of the many great resources available on globalEDGE is the export tutorials. This resource is located in the Reference Desk section of the globalEDGE website. The export tutorials offer information and helpful tips for individuals or companies looking to take their products internationally. There are five main headers: export readiness, government regulations, financial considerations, sales and marketing, and logistics. Under each header are important questions relating to that particular topic, accompanied by answers to those questions.

2015 has been a huge year for mergers and acquisitions, with current projections predicting the total value for the year will be the highest since pre-recession levels. Well-known industry leaders such AbbVie and Pharmacyclics, Royal Dutch Shell and BG Group, and Kraft and Heinz have all announced mergers this year, creating huge international corporations to compete in the global market. Several sectors have seen a large share of the activity, one being the technology industry, especially in the electronics and semiconductor area. The semiconductor industry is the backbone of the technological industry, producing the chips used in computers, cell phones, and appliances.

If you are looking to prepare for the Certified Global Business Professional Credential, find educational resources for your classroom, or learn more about all aspects of international business, look no further than globalEDGE's Online Course Modules. Our website contains over fifty modules, each with information on various issues in international business. Topics covered include country culture, exporting, microfinance, and doing business in different regions of the world, such as Africa, China, and the European Union. Along with knowledge on the selected material, our modules include interactive slides, quizzes, and relevant case studies. Our exporting modules, a product of a cooperation with the U.S. Commercial Service, also contain downloadable podcasts.

Located in the Global Resource Directory, globalEDGE’s culture resources provide information about greetings, etiquette, and gestures in order to increase cultural understanding and cross-cultural communications. The information provided can be useful for a businessperson or casual traveler, and these resources contain information regarding the business culture of a wide variety of countries. This particular section also provides globalEDGE online course modules that cover the topics of culture, international negotiations, and world religions to prepare a businessperson to do business abroad.

Are you looking to take your business global? Are you looking for ways to expand your business’s trade opportunities in the international marketplace? Are you simply looking to expand your international trade and business knowledge? If your answer to any of these questions is yes, globalEDGE has numerous resources that can be of great assistance to you and your business. Over the next few days, the globalEDGE blog will feature resources available on globalEDGE that can help any business maximize its potential in the global business arena.

Expanding a company abroad can provide a number of advantages for a company. The sales life of products and services can be extended by finding new markets to sell them in, thereby reducing dependence on domestic markets. Additionally, there is an increased ability to even out sales by tapping into new markets that may have different fluctuations if your business is troubled by seasonal changes or fluctuating demand cycles in the native country. Still, many countries assume that these benefits will be guaranteed immediately following the entrance of their business, and overlook a number of important factors that could have benefited the business. Some common mistakes made when taking a company global are listed below. 

The once mighty emerging markets of Brazil, Russia, India, and China are currently experiencing the negative consequences that come with the title "Emerging Markets". Brazil and Russia are experiencing terrible recessions, China is attempting to control a stagnant market, and India is struggling with economic reforms. To give an indication of the severity of the situation, Goldman Sachs, whose former chief economist coined the title given to the BRIC countries, has recently pulled its BRIC fund after years of continued losses. 

Over the duration of its rather short history, Bitcoin has gained popularity and economic clout but also its fair share of skeptics. The peer-to-peer lending system utilizes data mining, based on the idea that there is a finite number of bitcoins, and flaunts its decentralized network. Basically, there is a certain point in time when all existing bitcoins will be extracted and there is no single entity, like a central bank, that has the ability to generate more. This important distinction has led to its designation as a commodity by the Commodity Futures Trading Commission (CFTC) in the United States. Regardless of its status, the digital currency has been rallying for about two months now, thanks in part to acceptance by financial institutions like Morgan Stanley and Goldman Sachs. With a current buy price of about  $400, the money system has a record $1 billion invested in it.

A new segment has just been added to the resource tab of the country pages within the global insight section of globalEDGE. For all countries with available information, the U.S. International Trade Administration (ITA) Offices resource has just been added and now provides user with contact and address information for almost 200 ITA centers worldwide. For example, the United States resource tab has information for every ITA office located within the U.S. The ITA provides companies with advice on exporting, international sales, logistics, finance, and trade dispute resolutions. This has the potential to become a very useful resource for globalEDGE users of any kind. From a company trying to contact an ITA office for advice or help to a student doing research, having access to the ITA offices around the world opens many doors and allows globalEDGE to bring even more global business knowledge to its users.

Back in the 18th century, Europe was considered one of the most powerful technology innovation centers in the word. However, over the past decade, its technology industry growth has been lagging far behind that of the U.S., Israel, or even emerging markets such as China and India. This blog will discuss some reasons that contribute to the poor growth in the technology industry in Europe, as well as present some strategies being put in place by governments and European local businesses to re-boot the European technology industry.

Expanding a business overseas is a great way to gain access to new customers and can lead to tremendous growth for a company. However, it is important to weigh the potential risks and rewards to determine the viability of expanding a business internationally. In order to be successful in foreign markets, businesses must develop a market strategy, operating model, and product that are specific to the market or markets that are being targeted. The following paragraphs identify four tips that business owners can use to determine if expansion overseas is a good strategy, and if so, which markets to target.

Just this week, Nissan Motor Co. announced its quarterly earnings, which revealed that its profits had experienced a 37 percent surge during the first half of the fiscal year. Because of this revenue spike, Nissan's net income through March is now projected to reach $4.44 billion, an unprecedented level in the company's history. Nissan is now experiencing its fastest sales growth in over ten years, citing rising demand in the United States and Western Europe as a significant part of its success. This is an important record for the popular manufacturing company, but it may not last too much longer. 

China has a problem. In fact, China has multiple problems, but perhaps the most concerning issue is its greying populace. Throughout the world, advances in technology and knowledge in the general population of birth control, have left advanced countries facing demographic crises. China is no different, and while not considered an advanced country, it faces similar issues that are plaguing its population.

The globalEDGE team is excited to announce that we have successfully added new trade blocs, as well as redesigned the layout for many of the sections related to trade blocs. If you look at the Global Insights by Trade Bloc page, you will notice that there are 10 new trade blocs: ANCOM, APTA, the Arab League, CEFTA, EAC, EAEU, ECCAS, EFTA, OECS, and SAARC. By clicking on each individual bloc, you will also notice that we have redesigned the Introduction, History, Membership, Related Agreements, and Statistics pages. Users will now be able to gain an in-depth perspective of how much aggregated trade occurs because of these blocs, as well as how much each member country contributes to the bloc as a whole. Make sure to check out this new section today!

A month ago, I wrote about how the Volkswagen Emissions Crisis could affect the German Economy. Recently in Australia, Bannister Law filed two class action lawsuits in federal court on behalf of Australian citizens who purchased the defective Volkswagen vehicles. More than 100,000 cars in Australia had been sold with software that manipulated pollution controls.

The globalEDGE team is excited to introduce a new resource that has been added to the site. The International Property Rights Index 2014 is an economic index study on the correlation between economic success and property rights. The study includes physical and intellectual property rights data for 94 countries. There has been ever increasing evidence of the strong correlation between economic freedom and the protection of property rights, and The 2014 International Property Rights Index demonstrates this correlation. Developing countries tend to struggle with individual property rights, while developed countries lead the way with intellectual and physical property rights. Individually, country rankings can be found in the indices section of the country pages. The complete list of data can be found by gaining access to The Database of International Business Statistics (DIBS).

The low oil prices have had both positive and negative effects in the short-term, but the long-term effects are less known and are thought to have wide and long-term impacts on the global economy. Low oil prices have reduced gas prices and have allowed people to save money at the pump. Lower gas prices can help people who have lower incomes and can also reduce costs on energy bills for those who live in cold climates. The automotive industry has sold more cars while gas has been less expensive, which has caused total vehicle sales to climb from 12 million per month to nearly 18 million. In addition, transportation companies benefit from lower fuel costs, as does any business that has to pay fuel bills to power its operations.