globalEDGE Blog Archive April 2018

This Spring globalEDGE held our first ever blog competition at Michigan State University, where we asked students studying international business to submit blog posts to potentially be featured on the globalEDGE blog. Over the past few weeks, the globalEDGE team has been reviewing the many student submission and we are proud to announce that Lauren Kuiper, Xiyou Xu, and Pujitha Kasipuram are the three winners to have their blogs featured on the site this week.

Our team would like to congratulate the three winners and thank the many other students who took the time to submit entries.

Online streaming services are spreading all around the world and are eating away from the traditional cable service. With access to the internet around the world becoming easier as ever and subscription prices to video streaming services dropping every year, there is no reason why online video streaming companies will soon be the norm around the world. Amazon Prime, Netflix, Hulu, and HBO NOW are some of the common names that fall under the streaming bucket in the US. However, we now see some of these companies begin to dominate also in international markets as both Netflix and Amazon are now present in more than 190 countries, which represents 97% of the global market.

New exporting modules were recently published in the globalEDGE Online Course Modules.  These modules were created in cooperation with the US Commercial Service, based on content published by the Commercial Service.  Topics covered in these modules range from a general overview on beginning to export to rules of origin on specific free trade agreements.  These modules will be of interest, especially to small business owners. 

Modules of specific interest might be our Developing a Marketing Plan module, Methods and Channels for Exporting, Preparing Your Product for Export, and the Selling Overseas and Aftersales Service module.  Each of these modules offers its own range of information that will benefit any business professional who takes the time to listen to them. 

To access the exporting modules you can use this link.

China has been the world's number one importer of waste for the past 20 years. However, in an effort to address their growing pollution problem, 2018 marked the year China would begin banning imported recyclable waste from other nations. This ban applies to 24 types of materials including plastics, unsorted paper, textiles, and scrap metal and is predicted to include 32 more types by the end of 2019. As a result, countries around the world are scrambling to figure out how and where to dispose of their piling waste.

There is no doubt that companies are leaping into new international markets. There are benefits when going global and expanding including greater revenue potential, access to new talent, exposure to foreign investment opportunities, and much more. Below you will find a few important steps companies have to execute in order to enter into new international markets.

The cacao seed, which is used for the production of cocoa butter, cocoa powder, and chocolate, has seen several spikes in its supply over the past five years due to climate change, insects, and fungal infections. Paired with fluctuations in demand, the market has experienced a volatile commodity price for several years. Forecasts in 2014 predicted that the demand for cacao would outweigh its supply by 2020 and cause a global shortage. However, estimates have become even bleaker as scientists now predict that cacao may become extinct by 2050, as the main countries that produce the world’s supply of cacao will become unsuitable for cultivation due to climate change and deforestation. Even though this prognosis is still over 30 years away, is important now more than ever for countries and companies all around the world to increase their efforts to clean up the cocoa supply chain for a more sustainable future.

One of the world’s favorite beverages and a major source of caffeine for many students and employees, coffee continues to be an integral factor in society’s daily routine.  According to Business Insider, coffee is the second most sought-after commodity in the entire world, with an industry that is worth over $100 billion across the globe.  In terms of exporting alone, the industry is valued at $20 billion and continues to be on the rise—on average, 500 billion cups of coffee are consumed on Earth every year.

Private equity refers to the acquisition of equity in companies that don’t trade on public markets. This finance industry is relatively young in comparison to other sectors of commerce. The first firms, J.H. Whitney & Co. and the American Research and Development Corporation were both founded in 1946.

The technology industry is made up of skilled workers from all over the world, and the success of this industry largely relies on the ability to share and develop different ideas. When countries enforce strict immigration laws, or prevent travel in and out of the country, it hinders the technology industry. This is pertinent considering the possible changes in immigration laws in the United States under the Trump administration which may include reducing visas, increasing deportation, and focusing efforts on what used to be considered sanctuary cities. Multiple technology companies have expressed complaints with these policies, including Microsoft, Amazon, Google, and Apple.

Genetically modified has become a common term in society, especially in the crop industry. Genetic modification is part of the biotechnology industry which encompasses the exploitation of biological processes, especially that of the genetic manipulation of microorganisms for the production of crops, antibiotics, and hormones.

Tech firms have been innovating and growing freely with no strings attached for the past few decades. However, governments and politicians in the America and Europe have been growing a negative sentiment towards the freedom of the giant tech firms. Companies that fall under the social media, search engine, and e-commerce buckets have been specifically put under the microscope. The whole world is currently watching Mark Zuckerberg’s, the Founder and CEO of Facebook, testimony where he has been drilled with 100s of questions revolving around Facebook’s business model, monopolistic power, and the company’s lack of responsibility and respect towards its users data. The real question here is: should governments intervene and regulate these industries?

If you were born in 1900, you were expected to live a mere 50 years. Today, the average global life expectancy is 72.8 years. The good news is that people are living longer. The bad news is that many of the resources necessary to care for the aging population are dwindling. Of all the demographic trends in the world today, preparing for and managing the implications of the aging population might be the most important. 

The first thing a visitor to China notices is how fast most things move.  It seems every week or so, a new high-speed rail line is opening somewhere in the country.  Building construction takes place around the clock, with new housing blocks rising out of what were empty lots the last time you looked.

Artificial limbs, manufacturing machines, and transportation drones all share one common trait: the implementation of robotics.  One of the fastest growing sectors in the world, robotics and its applications are revolutionizing the way society conducts our lives.  The recent data boom has produced a newfound excitement around all technology, using the benefits of mass statistics to carefully craft new innovative products.  Robotics has been one of the largest, if not the largest, benefactors from this trend, using systems like cloud storage, artificial intelligence, and responsive programming to evolve into a highly intelligent and efficient tool.  Currently, technology stocks are growing tremendously compared to past years and robotics seem to be on the cutting edge of a new era.

Mauritius is an island nation flourishing economically and socially. The population has origins from the European and African continents, as well as from India and China which makes it unique for its social peace and multi-cultural society. Mauritius is the fastest growing economy in sub-Saharan Africa. Moreover, it has one of the highest GDP per capita incomes in Africa.  All of these facts make Mauritius a prosperous country in diversified ways.   

It is no surprise that the proposed Chinese tariffs looming over American agricultural industries such as soybeans, fruit, nuts, wine, and pork have the potential to greatly affect not only the companies and farmers that they target but the everyday Chinese consumers who purchase those products as well. If the duties are imposed, they will raise the cost of American imported goods in China to a point that exported goods from other countries may become a more valuable and competitive option than those from the United States.

As The Masters, one of golf most prominent tournaments approaches, we took a look at the state of the golf industry which is played by many individuals around the world.

Ms. Sheila Khama serves as the Practice Manager for the World Bank’s Energy and Extractive Industries Global Practice with a focus on eastern and southern Africa, Latin America and the Caribbean, southern Asia, Europe and central Asia, and the Extractives Global Programmatic Support Trust Fund. Khama previously worked as the Director of the African Resources Center at the African Development Bank (AfDB). With these along with her other positions, Khama focused on the development of African countries from the use of natural resources.

With evolving technology comes a growing number of sophisticated data breaches aimed at obtaining emails, credit card numbers and addresses for shoppers worldwide. In the last five years, there has been multiple high-profile breaches including Under Armor and the MyFitnessPal app, Target, Whole Foods Market, Chipotle Mexican Grills, and most recently Hudson’s Bay Co. which is home to Saks Fifth Avenue and Lord & Taylor.

In simple terms, inflation rates measure what has happened to consumer prices over the latest 12-month period. But what increases inflation? Well, economic growth is generally followed by a stronger and growing labor market, which means that unemployment is down and wages are increasing. This increases consumer’s disposable income and increases the cost of wages for companies. Both of those factors push prices up for consumers, which in turn, increases inflation rates. This is where interest rates, inflation’s best friend, comes into play. Shortly after inflation increases, interest rates begin to increase to control inflation (generally to 2%). Governments increase interest rates to incentivize people to save a larger chunk of their disposable income and decrease discretionary spending, in turn, decreasing consumer prices.