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Economy & Business Lecture 1 Global Challenges

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What are some of the Challenges?The Communications DivideNatural Resources and the Ecological FootprintThe World of InequalityWorld Conflict and the Flow of RefugeesHIV/AIDS: The Plague of Our TimesTerrorism

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Слайд 1 Economy & Business Lecture 1 Global Challenges

Economy & Business Lecture 1    Global Challenges

Слайд 2What are some of the Challenges?

The Communications Divide
Natural Resources and

the Ecological Footprint
The World of Inequality
World Conflict and the Flow

of Refugees
HIV/AIDS: The Plague of Our Times
Terrorism
What are some of the Challenges?The Communications DivideNatural Resources and the Ecological FootprintThe World of InequalityWorld Conflict

Слайд 3The Communications Divide
Internet Usage 2011
19.8% of the world’s population had

access to the Internet in 2011. In North America 74.5

% of the population had Internet access.
Asia = 13.8%
Africa = 4.6%
Australia = 58.9%


The Communications DivideInternet Usage 201119.8% of the world’s population had access to the Internet in 2011. In

Слайд 4The Communications Divide
Globally 1 person in 5 has a mobile

phone.
The Chinese and the Vietnamese are not even putting in

landlines at this time, jump straight to mobile.
Kenya introduced mobile phones in rural areas in 2005
IT: Bridging the communications divide
What does the communication divide mean for business?

The Communications DivideGlobally 1 person in 5 has a mobile phone.The Chinese and the Vietnamese are not

Слайд 5The Digital Age
Convergence between computing and communications technologies and the

spread of the Internet.
Ongoing increase in the power of the

computing and communications technologies coupled with the decline in the cost of these technologies

The Digital AgeConvergence between computing and communications technologies and the spread of the Internet.Ongoing increase in the

Слайд 6The Digital Age
Emergence of ubiquitous point and click interfaces that

are based on open standards, are cheap to establish and

run and are truly global.
The anticipated rollout of broadband communications technologies over the next five to ten years across major parts of the world.

The Digital AgeEmergence of ubiquitous point and click interfaces that are based on open standards, are cheap

Слайд 7The Digital Age
The global shareholder is going to be an

ever-tougher taskmaster. It’s mathematically impossible for every company to be

No. 1 or 2 in its market and for every fund manager to be in the upper quartile. As performance becomes more transparent and information more accessible, the pressure on companies will only increase. There will be no rest no matter how great the weariness”.
Daniel Yergin.

The Digital AgeThe global shareholder is going to be an ever-tougher taskmaster. It’s mathematically impossible for every

Слайд 8Natural Resources and the Ecological Footprint
The Ecological Footprint is the

global measure of environmental sustainability
The footprint is the land and

water area (in hectares) needed to supply the resources one person consumes and to absorb the waste
The area available for every person is 1.8 hectares
Natural Resources and the Ecological FootprintThe Ecological Footprint is the global measure of environmental sustainabilityThe footprint is

Слайд 9Natural Resources and the Ecological Footprint
In 2009, on average, each

person was using 2.2 hectares
The burning of fossil fuels, the

growth and production of food and increased air travel has the greatest impact on the ecological footprint
At present, the average Australian uses 7.7 hectares. Australia has the 4th largest footprint globally
Natural Resources and the Ecological FootprintIn 2009, on average, each person was using 2.2 hectaresThe burning of

Слайд 10Natural Resources and the Ecological Footprint
China, the world’s largest population,

has a footprint of 1.5 hectares. This is due to

a combination of:- diet (green vegetables, rice and low meat intake), lifestyle (low levels in car ownership, energy usage and aeroplane travel).

Our demand for natural resources is exceeding supply.

If all of the world’s people consumed resources and produced waste at this rate, we would require 4.3 Earths to maintain our current lifestyle.

Natural Resources and the Ecological FootprintChina, the world’s largest population, has a footprint of 1.5 hectares. This

Слайд 11 The World of Inequality
In 2009, over 3 billion people lived

on less than $2.70USD a day.
Denial of basic human rights
114

million children do not receive a basic education
584 million women cannot read or write
3 million people die each year from Malaria
In 2009, nearly 4000 people were executed in 74 countries that still have the death penalty. 97% of these were executions in China, Iran, Vietnam and the USA.
The World of Inequality In 2009, over 3 billion people lived on less than $2.70USD a

Слайд 12 The World of Inequality
HDI – Human Development Index – is

used to measure the quality of life. (life expectancy, adult

literacy and years spent at school and the GDP In 2010 Norway was first and Niger was last.

GNI – in 2009 Japan had a GNI of $37,180USD, compared with $330.00USD a year in Tanzania.

More than 60% of the world’s working hours are carried out by women – India 32% of the workforce are women and they earn less than men.

What effect do these issues have on global business?
The World of Inequality HDI – Human Development Index – is used to measure the quality

Слайд 13World Conflict and the Flow of Refugees
In 2005 there were

12 major armed conflicts in 27 locations around the world.
Massive

destruction
Kill, injure and displaces thousands of people each year
Refugees globally

What does this mean for global business?

World Conflict and the Flow of RefugeesIn 2005 there were 12 major armed conflicts in 27 locations

Слайд 14World Conflict and the Flow of Refugees
Global Military Expenditure in

2009
More than US$1035 billion is spent on arms
US accounts for

44% of the world’s expenditure on arms
Australia is the 15th largest purchaser of weapons and spends US$10 billion annually

Do we see the above as a global business?
World Conflict and the Flow of RefugeesGlobal Military Expenditure in 2009More than US$1035 billion is spent on

Слайд 15 HIV/AIDS: The Plague of Our Times
HIV/AIDS leading cause of death

worldwide
UN predicts 70 million will die from AIDS over the

next 20 years.
In 2009 over 40 million people were living with HIV/AIDS
95% infected live in low or middle income countries.
HIV/AIDS: The Plague of Our Times HIV/AIDS leading cause of death worldwideUN predicts 70 million will

Слайд 16Global HIV/AIDS Statistics 2009
Approximately 1% of the total world population

is infected with HIV/AIDS
Approximately 12,000 people are newly infected with

HIV every day.
Every day 8500 people die from AIDS
More than 2.3 million children worldwide are HIV positive
There are 12 million AIDS orphans in Africa
Australia has 14, 840 people living with AIDS

Why is this situation a global business challenge?
Global HIV/AIDS Statistics 2009Approximately 1% of the total world population is infected with HIV/AIDSApproximately 12,000 people are

Слайд 17Global Challenge
What do we mean when we say that we

live in an increasingly global world?

Ideological change and technology revolution

are making globalisation one of the most important issues facing companies today
Global ChallengeWhat do we mean when we say that we live in an increasingly global world?Ideological change

Слайд 18Terrorism
Terrorism knowledge base
Sept. 11/2001
Indonesia
Bali twice
London
Spain
Etc
Security
What does Terrorism cost global business?

TerrorismTerrorism knowledge baseSept. 11/2001IndonesiaBali twiceLondonSpainEtcSecurityWhat does Terrorism cost global business?

Слайд 19Global Challenge
“Every business must be considered a global industry and

every business a knowledge business”

“Globalisation is no longer an option

but a strategic imperative for all but the smallest corporations”
Global Challenge“Every business must be considered a global industry and every business a knowledge business”“Globalisation is no

Слайд 20Akio Morita Co-founder of Sony

Advised companies to “Think Globally, Act Locally.”

His

philosophy was christened ‘Glocal’ and this led to the new

word ‘Glocalization’.
Akio Morita Co-founder of SonyAdvised companies to “Think Globally, Act Locally.”His philosophy was christened ‘Glocal’ and this

Слайд 21Henry Wendt former CEO Smith Kline Beecham

Cross border alliances will be

the potential savior of the American pharmaceuticals industry …He recognised

that internationally based strategic alliances would become important if not vital.

Advocate of the ‘Sprinkler Model for market penetration’.
Henry Wendt former CEO Smith Kline Beecham	Cross border alliances will be the potential savior of the American

Слайд 22Walter Wriston Former CEO Citibank
“Globalisation is an imperative not because

of management or business theories, but because of technological breakthroughs.”

Competition

between banks can no longer be based on banking services, but on acquiring better technology.

Effectively, the company that is able to make decisions quicker, often in the fraction of a nanosecond will be the winners.
Walter Wriston  Former CEO Citibank“Globalisation is an imperative not because of management or business theories, but

Слайд 23Citibank
John Reid (current CEO) a technologist, MIT graduate.

Rationale for the

appointment – “Hard to teach technology to an established banker,

but relatively easy to teach banking to a technologist.

Citibank currently the world’s largest bank.
CitibankJohn Reid (current CEO) a technologist, MIT graduate.Rationale for the appointment – “Hard to teach technology to

Слайд 24Relevant Question about Globalisation


Is your company a leader or a

laggard in engineering and exploiting ongoing globalisation of your industry?

Discuss
Relevant Question about GlobalisationIs your company a leader or a laggard in engineering and exploiting ongoing globalisation

Слайд 25Road Map for Smart Globalisation

“People must ensure that their company

leads the industry in identifying market opportunities worldwide and in

pursuing these opportunities by establishing the necessary presence in all key markets”
Road Map for Smart Globalisation“People must ensure that their company leads the industry in identifying market opportunities

Слайд 26Road Map for Smart Globalisation


“People must work relentlessly to convert

global presence into global competitive advantage”.

Road Map for Smart Globalisation“People must work relentlessly to convert global presence into global competitive advantage”.

Слайд 27Road Map for Smart Globalisation

“People must cultivate a global mindset”

Cultural

and geographic diversity must be viewed as opportunities

Road Map for Smart Globalisation“People must cultivate a global mindset”Cultural and geographic diversity must be viewed as

Слайд 28Road Map for Smart Globalisation
“People should constantly strive to reinvent

the rules of the global game”
Who are our target customers?
What

value do we want to deliver to these customers?
How will we create this value?
Road Map for Smart Globalisation“People should constantly strive to reinvent the rules of the global game”Who are

Слайд 29What is Globalisation?
Globalisation refers to growing economic interdependence among countries

as reflected in increasing cross-border flows of three types of

entities: goods, services, capital and knowledge”.

Is the world truly becoming more global?
What is Globalisation?Globalisation refers to growing economic interdependence among countries as reflected in increasing cross-border flows of

Слайд 30Global Markets
2006 2056
USA China
China India
Japan USA

How do you see the global markets developing in

the future?

Global Markets2006					2056USA					ChinaChina					IndiaJapan					USAHow do you see the global markets developing in the future?

Слайд 31 What is a Global Company?

What is a Global Company?

Слайд 32What is Driving Globalisation?

Globalisation is becoming more feasible

Globalisation is becoming

more desirable

What is Driving Globalisation?Globalisation is becoming more feasibleGlobalisation is becoming more desirable

Слайд 33What is Driving Globalisation?
An ever increasing number of countries are

embracing free market ideology
EU, NAFTA, ASEAN Mercosur
WTO
EURO and Dollarization

What is Driving Globalisation?An ever increasing number of countries are embracing free market ideologyEU, NAFTA, ASEAN MercosurWTOEURO

Слайд 34What is Driving Globalisation?
Technological advances continue their onward march

Economic center

of gravity is shifting from developed to the developing countries

What is Driving Globalisation?Technological advances continue their onward marchEconomic center of gravity is shifting from developed to

Слайд 35What is Driving Globalisation?
The opening of borders to trade, invest,

and technology transfers is rarely a one way street. While

it opens up new and much larger market opportunities for companies, it also opens up their home markets to competition from abroad.

“Global oligopolies are as inevitable as the sunrise”
Louis Galambos
What is Driving Globalisation?The opening of borders to trade, invest, and technology transfers is rarely a one

Слайд 36Why Globalisation is here to stay.

Global Village

Emerging digital era of

globalisation will continue to develop and grow

Why Globalisation is here to stay.Global VillageEmerging digital era of globalisation will continue to develop and grow

Слайд 37Implications for Companies
The economic map of the world will change

more radically in the next twenty years than it has

in the last twenty.

The regional composition of the world’s five hundred to one thousand large corporations will be different in twenty years from what it is today. As a consequence, industry competition will become significantly more intense.
Implications for CompaniesThe economic map of the world will change more radically in the next twenty years

Слайд 38Implications for Companies
The ongoing technology revolution will make real time

co-ordination of globally dispersed operations routine.

What must be (versus is)

the extent of your market presence in the world’s major markets, particularly the major emerging markets, for your products and services? How should you build the necessary global presence?
Implications for CompaniesThe ongoing technology revolution will make real time co-ordination of globally dispersed operations routine.What must

Слайд 39Implications for Companies
What must be (versus is) the extent to

which you capture the cost reducing and quality enhancing potential

of optimal locations around the globe for the execution of various activities for your company?
Implications for CompaniesWhat must be (versus is) the extent to which you capture the cost reducing and

Слайд 40Implications for Companies
What must be (versus is) the effectiveness with

which you are able to exploit global presence and turn

it into true global competitive advantage, as opposed to global mediocrity or even global mess?


Implications for CompaniesWhat must be (versus is) the effectiveness with which you are able to exploit global

Слайд 41Last Word

“Follow, Lead or Get Out of the Way”
Ted Turner

Last Word“Follow, Lead or Get Out of the Way”Ted Turner

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