Chapter Discussion

Appreciate the relevance to businesspeople of four elements of geography: (1) location, (2) topography, (3) climate, and (4) natural resources.
Throughout this chapter, we present practical examples to show you why these four geographical elements are relevant to businesspeople. Frequently, you will find a section headed “Relevance for Businesspeople.”

Understand the importance of a country’s location in political and trade relationships.
A nation’s location is a significant factor in its political and trading relationships. Austria for example, located on the borders of both Eastern and Western Europe, has become the financial intermediary between the two regions as well as regional headquarters for numerous international firms that have Eastern European operations. Two major trading partners of the United States, Canada and Mexico, are located on its borders.

Understand how surface features contribute to economic, cultural, political, and social differences among nations and among regions of a single country.
Mountains divide nations into smaller regional markets that often have distinct cultures, industries, and climates. Sometimes even the languages are different. Deserts and tropical forests act as barriers to people, goods, and ideas.

Comprehend the importance of inland waterways and outlets to the sea.
Bodies of water attract people and facilitate transportation. Water transportation has increased even after the building of railroads and highways. Various European firms are shipping goods in barges on the Rhine waterway instead of using highways.

Recognize that climate exerts a broad influence on business.
The difference in climatic conditions among a firm’s markets can significantly affect its marketing mix. A product sold for use in northern Canada may need protection against cold weather, while the same product used in the tropics may require extra cooling to resist the heat. Heavy seasonal rains can require the firm to carry large inventories because of the difficulty in replenishing stock in inclement weather.

Understand why managers must monitor changes in the discovery and the use of mineral resources and energy sources.
The discovery of a new energy source or the reduction in the cost of producing an alternative source may offer a company an opportunity to economize on its use of energy. A new oil or mineral find might provide a country with new income, which in turn could make it a valuable customer for international firms, as occurred in the Middle East when crude oil prices tripled. On the other hand, imagine what would happen to the income of oil-producing nations if hydrogen became an economical fuel.

Understand why managers must be alert to changes in a nation’s infrastructure.
New roads, bridges, and canals often open new market in developed and developing countries.

Appreciate the impact of industrial disasters such as the Alaskan oil spill and the Bhopal accident on global and multinational firms.
Industrial accidents such as the Bhopal disaster and the Alaskan oil spill have caused both developed and developing nations to be more concerned about the protection of natural resources. International chemical manufacturers are reassessing their positions concerning joint ventures when they cannot control the choice of equipment, plant safety, and maintenance.