BUSINESS & GLOBAL

ECONOMY– 6
Richie Santosdiaz
They will also be your group teams for
the group presentation

Comprehensive strategic analysis of a chosen company with industry insights and

actionable recommendations.

15-minute maximum presentation (with a visual ideally ppt) on the topic

2 pages max of an executive summary (on word) of your business plan

Focus on Asia and/or the Middle East

Choose one
ASIA/MIDDLE EAST BORN COMPANY: COMPANY EXPANDING INTO ASIA/MIDDLE
EAST:
Qatar Airways Disney
Emirates Airlines Subaru
Tata Louie Vuitton
McDonalds
Huawei
Google
Tiktok Levis
Alibaba Carrefour
HSBC P&G
Facebook
Singapore Airlines
GM
Etisalat H&M
BHP Group (Australia) Costco
Visa
DP World
Toyota
Jollibee
ASUS
 This class’s
topics

 An overview of economic
integration
 Example one: EU
 Example two: GCC
 Example three: ASEAN
Government Intervention Tools?

Why do governments intervene often in international trade?

Protectionism – to protect domestic industries (i.e. tariffs or taxes on imports,

nontariff trade barriers which would be policies that restrict trade, and
investment barriers that achieve political, social or economic objectives) – is it a
good thing?

Can it harm the economy more than do good?

Aims for free trade agreement

http://europa.eu/pol/pdf/flipbook/en/trade_en.pdf
Aims for free
trade agreement

http://europa.eu/pol/pdf/flipbook/en/trade_en.pdf
Overview - Levels of Economic Integration
Overview - Levels of Economic Integration

USCMA
Example: South Korea

 Do you see a link with economic development and

democracy?

 Would it have been a “Four Tiger” had it followed a

different route?

*Four Tiger refers to Hong Kong, Singapore, South Korea & Taiwan that was fueled by
exports and rapid industrialisation from the 1960s
 Example:
Overview of the
European Union
 Politico-economic union
 27 member states (UK left after
Brexit formally 28)
 European integration after WWII to
prevent future conflicts
 1952 – European Coal and Steel
Community
 Belgium, France, West Germany,
Italy Netherlands, Luxembourg
 “contribute to the expansion of
the economy, the development of
employment and the
improvement of the standard of
living' of its citizens”
Overview of the
European Union
 1957 – Treaty of Rome – 1958
created European Economic
Community (EEC)
 Customs union in member
states
 1973, Britain, Ireland and
Denmark joined.
 1980s - Entry of Spain, Portugal
and Greece
 1995 - Austria, Sweden and
Finland
Overview of the
European Union
 Maastrict Treaty – signed in 1992 –
Created the European Union and
introduced the Euro
 2002 – Euro was implemented in many
EU countries
 Sound fiscal policies, debt limited
to 60% of GDP and annual deficits
no greater than 3% of GDP.
 2004 – ten countries joined: Poland,
Hungary, Slovenia, the Czech
Republic, Slovakia, Cyprus, Malta,
Estonia, Latvia and Lithuania
 2016 – Brexit vote (UK left in 2020)
Overview of the European Union – Eurozone
Law Making in the EU

http://www.civitas.org.uk/eufacts/download/OS.2a.Lawmaking%20Dia.pdf
Responsibilities

 Euro
 External trade negotiations
 Overseeing single market
 Competition policy
 EU budget
 Operates various funds
 Responsibilities in justice & home
affairs, foreign policy, social
policy
 Regulates areas of peoples’ lives –
environment and consumer
protection

http://www.civitas.org.uk/eufacts/OS/OS1.php
EU Economy
Overview
 World’s largest economy
 Largest Importer and Exporter
 7% of world’s population but
25% of world’s wealth
(measured by GDP)

http://europa.eu/pol/pdf/flipbook
/en/trade_en.pdf
EU – Trade in Goods

In 2020, China took over the position as the EU’s main trading partner in goods from the US, with an
overall share of 16.1% compared with 15.2% for the US. Since the UK left the EU, it has become the
EU’s third trade partner for goods, accounting for 12.2% of all trade in goods. Other important trade
partners for goods, in descending order, are Switzerland (6.9%), Russia (4.8%), Turkey (3.6%), Japan
(3.0%), Norway (2.5%), South Korea (2.5%) and India (1.8%)[2].
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/wdn-20210405-1
https://www.europarl.europa.eu/factsheets/en/sheet/160/the-european-union-and-its-trade-partners
EU – GLOBAL FDI FLOWS

https://www.europarl.europa.eu/factsheets/en/sheet/160/the-european-union-and-its-trade-partners
 Example:
Gulf Cooperation
Council (GCC)
 Political and economic alliance of
Saudi Arabia, Kuwait, the United Arab
Emirates, Qatar, Bahrain, and Oman
 Established in May 1981
 The purpose of the GCC is to achieve
unity among its members based on
their common objectives and their
similar political and cultural
identities, which are rooted in Arab
and Islamic cultures. Presidency of
the council rotates annually.
 GCC agreements typically focus on
either security or economic
coordination

https://www.britannica.com/topic/Gulf-Cooperation-Council
Example:
Gulf Cooperation
Council (GCC)
“The alliance was formed to
strengthen relations among its
member countries and to promote
cooperation among the countries’
citizens. The GCC also has a
defense planning council that
coordinates military cooperation
between member countries.”

https://www.britannica.com/topic/Gulf-Cooperation-Council
GCC & Trade

China was the largest trading partner to the GCC

representing 15.8% of total trade in goods with the
world in 2020

The EU was in 2nd place representing 12.3% of total

trade in Goods

The EU ranked as the GCC’s number one import partner

https://ec.europa.eu/trade/policy/countries-and-regions/regions/gulf-region/
In focus: The UAE

The five biggest non-oil trading partners of the UAE –

China, Saudi Arabia, India, the US and Switzerland –
accounted for 37.1 per cent of the UAE’s total trade,
worth Dhs244bn ($66.48 billion)

Top five nationalities (precovid) visiting Dubai –

India, KSA, UK, China, Oman

https://gulfbusiness.com/uae-non-oil-trade-reaches-dhs658-3bn-in-h1-2020/
https://www.globalmediainsight.com/blog/dubai-tourism-statistics/
Poll
Have you been to Dubai?
Clusters

 Firms from the same industry gather together in close proximity.

 Banking centres in cities such as London and New York
 Use neighborhood's pool of expertise and skilled workers
 Easy access to component suppliers (Toyota's suppliers generally cluster round
the mother company's factories, wherever they may be);
 Modern high-tech clusters often gather round prestigious universities on
whose research they can piggyback.

http://www.economist.com/node/14292202
 Example:
Association of South East
Asian Nations (ASEAN)

 10 members – Brunei Darussalam,

Cambodia, Indonesia, Lao PDR,
Malaysia, Myanmar, Philippines,
Singapore, Thailand, Vietnam
 Established in August 1967


https://www.britannica.com/topic/Gulf-Cooperation-Council
 https://www.youtube.com/watch?v=VDTdXDDzJ1k

ASEAN information
 ASEAN trade in goods

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=ASEAN-EU_-_international_trade_in_goods_statistics
Case Study: The Auto Industry & GM &
ASEAN

https://www.aseanbriefing.com/news/asean-case-study-auto-
industry-gm/
Advanced, Emerging and Developing
Economies

What are the differences?

Examples ?
If I was a large multinational what would
attract me to an emerging economy?
Drawbacks to an emerging economy?
Family Conglomerates
Advice in doing business in an emerging
economy?
Real life internationalisation exercise!

 India
 UAE
 Saudi Arabia
 China
 Australia
 Singapore
First: Understand the business-friendly environment of it
and recollect any business etiquette tips

 India
 UAE
 Saudi Arabia
 China
 Australia
 Singapore
 Exercise

 Tesla is looking to set up a new

car production facility that will be
producing a new state-of-the-art
autonomous electric vehicle in
the Asia-Middle East region –
where should it set that up?
 Exercise

 Harrods wants to set up its first

department store outside of
London to cater to the affluent
Asia-Middle East region – where
should it set up its first
international department store?
 Exercise

 A very reputable medium-size

Canadian law firm who is a is
looking to enter a new market in
the Asia-Middle East region to
grow its international legal
business (which it already does
business via its US and UK branch)
– what market would be the most
suitable for them?
 Exercise

 SP Jain School of Management is

looking to expand and create a
new campus (sorry Mumbai,
Singapore, Sydney and Dubai!) –
where in the Asian-Middle East
region should they look to create
the fifth campus?
 Exercise

 A fintech company (financial

technology) with its headquarters
in London, which is a leading
payments solution provider, is
looking to set up its first-ever
regional headquarters in the Asia
or Middle East region – where
should they set up that office?
 Exercise

 You are the Head of HR and

Recruitment for a leading
accountancy firm based in
Geneva, Switzerland and you are
running a global MBA graduate
scheme. For the final round the
CEO said you need, to save costs,
instead of flying candidates from
Asia and the Middle East to
Geneva to have it in a centralised
location in the region. Where
would you have the final round of
interviews for the candidates?
 Exercise

 As a result of Brexit, HSBC wants

to rebrand itself and be non-
European and go back to its Asian
roots or be Middle Eastern. Where
should they set up its new global
HQ?
 Exercise

 Qatar is looking to add an

additional daily flight from Doha
to somewhere in Asia/Middle East
– which one should it choose?
 Exercise

 Qatar Development Bank is

looking to outsource some of its
back office – where should it do
so?
Thank you

Class 6