Essay Writing: International Business Trend (Essay Sample)
Based what you have learned in class, please do the following:
• International Business Trend Analysis:
Select an INTERNATIONALLY operated company (Feelfree to use the company you had in Assignment 1) and:
A) Select 2 Global Business Trends (EG. Oil Price Change, Financial Crisis, SARS Disease, Emerging Market, Green Revolution, etc.) and explain what they are in terms of:
a) Where their origins are (how did it start)b) How it impacted the Canadian Economy
• International Business Trend Responses:
B) Use the 2 Global Business Trends that you had in PART A), and create (make it up) 2 scenarios (situations) for EACH of the Trends that:
a) Positively influenced the company of your choice, then explain, as an international business owner, your potential ACTIONS.
b) Negatively influenced the company of your choice, then explain, as an international business owner, your potential SOLUTIONS.
Businesses are continuously influenced and shaped by consumer incentives together with economic developments. There are constant evolutionary changes in the world of business today. These changes can affect the performance of businesses in positive and negative ways depending on how they respond to them. The 2008 financial crisis and the changes in oil prices are some of the recent trends that shaped businesses to a great extent.
2008 Financial Crisis
Financial crisis that began in 2007 was precipitated by development of real estate bubbles, rapid credit growth, abundant liquidity, and low risk premia (Wei, Payne, & Shirley, 2015). What triggered the financial crisis was huge debt owed to banks and amount of money that flowed into the economy as the banks gave out too much money in loans (Mansbach, & Pirro, 2016). The banks used the money to push up house prices and take risks on the financial market. As much money was leant to the property market, housing prices shot up and levels of personal debts increased. Debts owed were rising quicker than income made limiting the abilities of some people to keep up with repayments of loans and these people eventually stop paying loans making banks faced with the possibility of going into bankruptcy causing the financial crisis (Spiegel, 2011). In response, banks refused to lend, lending only when they were sure they will be repaid but at the same time, the people owing had to make repayments. In the end, the amounts being repaid to the banks were greater than the amount of loans the banks were giving out causing money to be drained from the economy. This forced the economy to slow down and prices to increase. As a result, a fall was experienced in wages and prices while the amount of money people had to pay on debts remained constant making the debts to become more expensive making everyone to suffer and causing recession (Srivastava, 2015).
The financial crisis never affected the Canadian economy as much as it affected the U.S and the rest of the world but its effects were still significant. Importantly, there was reduction in output and several people lost their jobs as the Canadian economy fell into recession and the Canadian policy makers had to respond with good policies.
Fluctuating Oil Prices
The prices of oil have been falling and the earnings for companies that previously enjoyed stronger positions have seriously declined. What has caused the oil prices to decline are stronger U.S dollars, oversupply of oil, OPEC, Iran Nuclear Deal and reduction in demand of oil. The U.S dollar is on a 12-year high against the Euro (Baffes et al., 2015). The pressure on commodities has been high because of the strong dollar causing the value of these commodities to fall. Besides, the market has seen an oversupply in oil whereas the demand for oil has been declining, thus creating a surplus. The Iran nuclear deal has also enabled the government to export more oil and the investors fear
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