Business Assignment #2-Perfecto

For this assignment:

Please reply to 3 classmate’s post that is below.

150 words or more

APA format

3 scholar references

In cite citation

Response 1

Key Term and Why You Are Interested in It

I chose the key term Developed Nation because it describes countries who are the most involved on how the world is run. Currently the world is going through a lot of elections in developed countries which brings attention to what might change. Also, countries like Russia who many people would consider to be developed is actually developing. These countries are up to date with the latest technology and resources which attracts outsiders who are willing to help it grow. It is much easier to visit a developed country than visit a weak corrupt nation where violence can take place at any time.

Explanation of the Key Term

Developed Nations have great wealth and are good with managing their resources in order to take care of its own people. A lot of nations have climbed into the developed category because of technology growing lately. Also it is interesting because vacation areas are becoming developed due to tourists bringing in a great amount of money allowing for places like Barbados to access healthcare and technology.(Satterlee, 2015, p.93) Countries that have attractions can use it to their advantage to lure in money and put it towards things like education which will help build technology and resources. A nation might be small but as long as its economy is stable and things like healthcare and technology keeps growing along with its people, it will be defined as developed.

Major Article Summary

Japan has been classified as a developed country but in recent years its economy and ability to grow has taken a turn. In order for a country to be able to stay developed they must have a stable working class. Japan currently has a shortage of workers due to a low birth rate and not enough immigration taken place. Because of their low birth rate the nation is experiencing a time where there is not a lot of spending taken place which hurts its economy. Japan currently has the worlds oldest population which explains why spending is down. In order for companies to sell their product they are now investing in selling their products overseas rather than at home which creates a deficit. It is hard for a nation to remain stable if they have to rely on doing business overseas. There is discussion about raising sales tax but the last time it was imposed consumer spending fell sending japan into a recession. Also, it would not be a good idea to lower sales tax because even though people might purchase a lot more resources money will still be lost. Japan is not an ideal vacation location so it is hard to bring in money by advertising family getaways. This article points out that Japan needs to find a way to raise lower their population age limit by either producing more or welcoming immigrants that are willing to work. Having a younger population will increase money being spent which will help local businesses and could stop companies from focusing on exporting resources. Wages have remained fragile due to low domestic spending making it hard to raise income. In order to grow your income money has to be spent and a boost in tourism would help provide that needed source. In order to continue developing Japan needs to create jobs that will attract young immigrants which will result in money being spent. The banks can not keep putting themselves at risk in order to spark inflation for a short period of time.

Discussion

Japan was a good nation to discuss for a developed nation because of its risk factors as of now. Their is a bunch of decision making taking place with thriving businesses trying to expand their product. I cited an article about how President Trump is now trying to reconstruct NAFTA which will affect jobs in three different countries. The reconstruction would take away jobs from two countries in order to keep growing one. Canada will have to figure out how they will remain a developed nation after losing resources that kept them stable along with Mexico. Another cited source is about how Malaysia is trying to transform themselves into a technological nation by investing in education. Investing in education is something that will help build a more educated workforce. I read an article about how Canada is leading developed countries in many ways and one reason is it has a generous bounty of resources.(NuWire, 2010) This provides them with an option of exporting goods for money but also keeping their taxes low for domestic spending. Japan is the opposite because they have to rely on other nations due to less domestic spending. The last reference explains how the top ten most developed countries in the world maintain growth and how each of them differ in strengths.

Response 2

Communication Technology

 

Key Term

            The key term I’ve decided to discuss is Communication Technology. I am interested in communication technology due to our modern world and international business having a strong reliance on it. We are exposed to communication technologies on a daily basis and it is important having the knowledge of what it is we are exposed to. Author Brian Satterlee (2014) states that the key concept is used by global business professionals in processing and the transfer of messages and information (pg. 17). Any type of communication including radio, television, cell phones, computers, and so on relate to the key concept. Essentially, our current world would not be as advanced without the use of communication technology and it interests me further to learn more and discuss the concept. We use the concept of communication technology in business and trade with other countries to help satisfy our domestic needs; which is another important factor for my interest in the key term.

Explanation

            According to Satterlee (2014), innovation in networking technologies has reduced the barriers of communication between global operating locations; additionally, communication technology is composed of television and radio broadcasting, multimedia applications, internet, advertising, journalism, and mass media. Knowing the type of methods used for the key term leads to a better understanding of its use and application in the business world. We use communication technologies to implement an access to information and product offerings so that business can take place internationally. I believe without communication technology, there would not be international business as a result due to the lack of exchanging information and ideas globally.

Major Article Summary

            The major article I’ve chosen is “Concentration of Access to Information and Communication Technologies in the Municipalities of the Brazilian Legal Amazon” composed in 2016 by Brito et al., with a study that fills demand for data on a region with economic, political, and social problems. The study uses the 2010 Brazilian Demographic Census to compile data on urban and rural households with computers and internet access as well as mobile and fixed phones as part of how they communicate domestically and internationally (Brito et al., 2016). They use the data to analyze the factors that influence income, education, use of electricity, and population size. In addition, the results show that for urban households, the average concentration in parts of the amazon for computers and internet access as well as fixed phones is lower than in other regions of the country (Brito et al., 2016). The final results of the study show that education and income are determinants of inequality in accessing communication technologies in different Brazilian locations (Brito et al., 2016).

            Social media plays a key role in communication technology and with the adoption of the internet, media and information technology tools has attracted the attention of many academicians and practitioners per author Amarna Raman (2016). Additionally, the founders and the managers of nonprofits look forward to information and communication technologies to aid in organizational effectiveness and societal missions (Raman, 2016). Nonprofit organizations have adopted communication technologies to further develop and grow as well as meet their needs and missions. Another author, primarily from Australia, Inge Kral mentions communication technology practices have developed in accordance with broadband, satellite, or Wi-Fi availability to lead indigenous youth to come of age and grow in social practice, communication, and learning (2014). There are many positive aspects to the rapid development of technology in indigenous countries and I believe it will lead to growth for the nations that use it.      

Discussion

The major article I’ve chosen to focus on directly relates to communication technology due to data analysis on access and use of information and communication technologies in Brazil and other countries. In the article, traditional and digital uses of the key concept include mobile phones and the web among other methods. The research I’ve conducted taught me that there is more to communication technologies and the use of which will help learn more about a nation, lead to its development, and help in conducting business locally and internationally. Essentially, communication technology can be referred to information technology as all equipment and programs are used to transmit information. Communication technology influences international business by making the exchange of ideas and information more efficient on a global scale. In addition, professionals in the field specialize in developing, installing, and servicing the hardware and software needed in a world that depends on remaining connected for business and social purposes.

The major cited work and the articles that follow have many factors in common such as the direct use of communication technologies and how it impacted the countries as a result. The major article, as well as the four articles, relate communication technologies with the use of the internet, multimedia, cellphones, and telephones having a positive impact on society. Each article analyzes the design and use of communication technologies directly affecting the needs of a specific business market or industry; such as, the use of cell phones to conduct transactions, make important calls, set up meetings, organize events, etc. The countries in reference include Brazil, India, Australia, Nigeria, and the United States. Essentially, all the listed countries have used communication technology to conduct business with other nations and have been impacted positively. The key concept keeps all that use it connected as information is easily gathered and exchanged. In conclusion, countries will continue to develop if they use communication technologies.  

Response 3 

Why Export Financing?

            Export financing is an ever more important tool today in the world international trade. With more businesses doing more business across borders the cost of cost of capital as well the timeliness of return can be an even more important stressor or companies. Last week I wrote about barriers to trade and in that theme this is one of the tools that could be used in order to combat so of those barriers. With the access to capital becoming more easier to get and more companies willing to lend money even small businesses are finding a way to finance their export endeavors. The internet has probably been the single largest driver in the expansion of global trade and has also allowed easier access to export financing.

What is Export Financing?

            One of the most important aspect of most businesses is receiving the payments for the good and services they provide. When a company decides to export goods receiving a return on those goods become more complicated. Foreign currency exchange, regulations, and sheer geographical distance can delay the time in which the exporter received the proper compensation for their product. It is no secret that businesses need access to cash in order to continue their operations and export helps fill the gap when timeliness of payments becomes an issue. Banks and other financial institutions will loan money to companies so that they can maintain the necessary cash flow needed for operations. Of course these entities do not loan the money out of the kindness of their hearts. There are several way in which companies get paid for financing of exports. They can be as simple as a flat fee all the way to complex contracts involving the purchase the liability.  

The State of Export Financing

            As mentioned in the beginning of this discussion with the advent of the internet smaller and mid-size companies have been able to compete more with the big guys. It has also become easier for these smaller companies to gain access to export financing (Varley, 2012). In 2010 State of the Union address President Barrack Obama announced the National Export Initiative (Varley, 2012). The goal of this was to double the United States’ Exports by the year 2014 (Varley, 2012). This was two years into the Great Recession and this was another attempt by the executive branch to try and spark some economic growth. The main burden of this new initiative fail on the US’s export credit agency, the Import-Export Bank (Varley, 2012).

            In regards to the recession’s effect on export financing Varley believes it is a mixed bag (2012). As far as the structure of the import and export market not much changed with the downturn or the initiative (Varley, 2012). With some of the world’s local economies being depressed some of the companies looked across borders to sell their goods (Varley, 2012). So in some way there were some increases in export financing as businesses tried to find a market to sell their goods and therefore looked for ways to finance these endeavors (Varley, 2012). The largest impact that the recession had on the financing of exports, and imports for that matter, was that with all of the loss around the globe from defaults credit became tighter (Varley, 2012). Major credit insurance companies tightened their reigns on the underwriting of their policies and therefore made export financing more difficult for smaller and mid-size businesses (Varley, 2012). As of 2012 this issues was just starting to clear up and see the clamped down credit insurance policy (Varley, 2012). In addition, there is more competition in this market driving rates to become more attractive (Varley, 2012).

Discussion

            How Does the Status of Export Financing Tie Into the Overall Concept?

            Export financing is ever increasing as the world we trade in becomes smaller and smaller. Understanding the dynamics of what can affect export financing is paramount to staying ahead and hedging against the risk of exporting goods and services. The products and instruments used to finance these often complex agreements are ever changing with the regulatory and market factors that affect them. When Varley, as part of a company that provides export financing, is looking into the future of the company and/or trying to forecast he has to take into account what he think will affect their business. Like technical barriers to trade discussed in week 1’s post there many nuances and competing interests that even though they are not made to make trade more difficult the end result is that they do. So when looking at export financing it is not enough to just understand the concept, but need to know what factors may cause affect export financing.

            Tying Together Additional Resources

Kawas states it best when he describes export financing as, “A letter of credit is the written assurance of a bank, on the instructions of a buyer, to pay a seller a specific amount provided that the seller submits stipulated documents in conformity with the terms and conditions of the letter of credit” (1997, p. 61) This resource is good for getting a good understanding of the basic concept. David Griffith gives good insight into why export financing is so important (2010). United States was not the only company that tried to use exports to boost their economy (Goldberg, 2012). Japan used an intuitive to try and spark and increase (Goldberg, 2012). This was to tie into Varley’s analysis of the status of exports. From Chatham Newstex is discusses the shift of smaller companies being able to get into the export game and gain access to the financing needed to do so (Unknown, 2015).