1. International Business – Objectives (an overview)
To define International Business and describe how it differs from Domestic Business
To define & discuss basic terms relating to International Business
To explain the major motives of companies for engaging in international Business & why its growth has accelerated

2. International Business – Objectives(an overview) (Contd…)
To introduce different means a company can use to accomplish it global objectives
To illustrate the role social sciences disciplines play in understanding the environment of International Business
To provide an overview of the primary patterns for companies’ international expansion.

3. International Business – Objectives(an overview)(Contd…)
To describe the major countervailing forces that affects the performance of International Business

4. What is a Business?

5. What is a Business?
It is any activity that seeks profit in providing needed goods and services to others

6. Q1-What is International Business?
A question for you?

7. International Business - Definition
It is any business transaction which involves a cross border transaction

8. Q1-What is International Business?
It is all business transactions – Private & Government! – that involve two or more countries.
Private companies undertake such transactions for profit; Government may or may not do it for profit.

9. Q3-What is the goal of a private Business and why it is different to Government ?

10. It is to make profit for the owners This is different to government
Q3-What is the goal of a private Business and why it is different to Government ?
It is to make profit for the owners
This is different to government
as they may may not do those transactions for profit

11. What are the transactions involved in international Business
A question for you?

12. What are the transactions involved in international Business
Buying raw materials and inputs
Shipping of inputs and outputs
Building a plant in another country
Borrowing money etc

13. Who are the parties involved in international business
A question for you?

14. Who are the parties involved in international business
Private individuals
Individual Companies
groups companies
Non profit organizations
Public sector organizations
Multinational organizations

15. What is a organization?

16. What is a organization?
It is a system of consciously coordinated activities of two or more people

17. What is a Non Profit organization?

18. What is a Non Profit organization?
It is an organization whose goals do not include making a personal profit for its owners

19. Why people Trade with other nations ?

20. Why people Trade with other nations ?
No country is self sufficient
Other countries need products
that prosperous countries
produce
There is a world imbalance of natural resources and technological skills

21. What are the modes of international Business?

22. What are the modes of international Business?
When operating internationally a business should consider its modes of operations which are not the same for domestic businesses
They should consider how to export and import as well as the diversity and complexity of the environment

23. Why should you study International Business?

24. Why should you study International Business?
International Business comprises large, and a growing portion, of the world’s total business.
Today almost all companies – large or small are affected by Global Events and Global competition.

25. Q-4When operating internationally a business should consider its
Global competition and Global Events,modes of engagement such as importing and exporting and physical social and competitive environment and some of the complexities involved.

26. Why should you study International Business? (Contd...)
Most companies sell outputs and secure supplies from foreign countries and/or compete against product and services that come from abroad.

27. Why should you study International Business? (Contd...)
Because all companies engage in International Business; may be engaged in either importing or exporting and
Differ from those done at domestic level which they are accustomed to.

28. Why should you study International Business? (Contd...)
To operate effectively managers must understand these different modes.
International Business takes place in a more diverse external environment than is found domestically.
The physical, societal and competitive environment affect the way business functions such as marketing is carried out.

29. International Business affects…
Company profits
Employment security and wages
Consumer prices and
National security
( Company’s international operations and Governmental regulation of International Business has a bearing on these factors)

30. A better understanding of International Business will help
To make more informed decisions such as
Where you want to work
What Governmental policies you want to support
To understand some of the complexities involved.

31. How does international business differ from domestic business
A question for you?

32. How does international business differ from domestic business
The countries involved may use different currencies
The legal systems may differ
The cultures may differ
Te availability of resources may differ

33. Why companies engage in International Business

34. Why companies engage in International Business
Four major operating objectives
To expand sales
To acquire resources
To diversify sources of sales & supplies
To minimize competitive risk.

35. Q5- What is meant by “Expand sales”

36. Q5- What is meant by “Expand sales”
Companies sales are dependent on customers interest in their products or services and the consumer’s willingness and ability to buy them
The number of people and the amount of their purchasing power is higher for the world as a whole than for a single country,so companies may increase sales by defining markets in international arena

37. What is meant by “acquire resources”
Manufacturers and distributors seek out products services and components produced in foreign countries
They also look for foreign capital,technologies and information they can use at home
Sometimes they do this to reduce their costs so as to increase profits or to pass the benefit to consumers
Some times they do this to improve quality or to have access to something that is not available

38. What is meant by “diversify sources of sales and supplies”
Diversifying is done to help avoid wild swings in sales and profits and many companies seek out to foreign markets to take advantage of the timing of business cycles, recessions and expansions which takes place at different times
Also to avoid the full impact of price swings or shortages in any one country

39. What is meant by “minimize competitive risk”
Many companies move internationally for defensive reasons
They seek to counter advantages their competitors gain from operating in foreign markets and in turn could use those against others in their markets

40. International Business – operations & influences
External influences
Objectives
Physical & societal functions
Strategy
Competitive Environment
Means
Modes
Functions
Tactical Alternatives

41. Q6- Reasons for recent International Business Growth.

42. Q6- Reasons for recent International Business Growth
Rapid increase in and expansion of technology
Liberalization of governmental policies regarding cross border movement of trade and resources.
Development of the institutions needed to support and facilitate international trade.
Increased global competition.

43. Q-7 Reasons why there is a global government trend in lowering trade restrictions

44. Q-7 Reasons why there is a global government trend in lowering trade restrictions
Citizens have expressed their desire for better access to a greater variety of goods and services at lower prices
They reason that their domestic producers will become more efficient as a result of foreign competition.
They hope to induce other countries to reduce their barriers to international movements.
With the enactment of world trade organization in 1995 their has been optimism that restrictions will continue to diminish

45. Modes of International Business
Importing & exporting
Tourism & transportation
Licensing & franchising
Turnkey operations
Management contracts
Direct and portfolio investments.

46. What are International Companies
Multinational Enterprise
Multinational Corporation

47. What are Multi national and transnational corporations
Multinational Enterprises takes a global approach to markets and production. They are sometimes referred to as multi national corporations (MNCs) or
Transnational corporations
(TNCs)

48. External Influences on International Business
Political policies + legal practices
Values, attitudes and beliefs
Economic forces
Geographic influences

49. External Influences on International Business
To operate within a company’s external environment its managers must have not only knowledge of business operations but also a working knowledge of the basic social sciences , history,political science , law, anthropology, sociology, psychology, economics, and geography

50. Competitive Environment
Advantages in Pricing, Marketing, Innovation or other factors
Number and relative capabilities of competitors.
Competitive differences by country

51. Evolution of strategy in Internationalization Process
Pattern of expansion
Passive to active expansion
External to internal handling of operation
Deepening modes of commitment
Geographic diversification
Leapfrogging of expansion

52. Countervailing forces
Globally Vs Nationally
standardized responsive practices
Country Vs Company competitiveness
Sovereign Vs Cross National Relationships

53. Countervailing forces
Countervailing forces influence the conditions in which companies operate and their options for operating internationally. A company’s quest for maximum global profits is inhibited by different conditions in foreign countries, rivalry among countries, cross national treaties and agreements, and ethical dilemmas

54. What is meant by globalization
Globalization is defined as the process towards the integration of national economies in to one global economy through the free movement between national frontiers of goods and services , factors of production such as capital labour and technology
The heart of globalization lies in the rapid reduction in transportation cost and the revolution in information technology

55. q8-What are the supporting services that may be required in a country for a business to successfully engage in international business

56. q8-What are the supporting services that may be required in a country for a business to successfully engage in international business
Communications Manufacturing
Financing Packaging
Banking Labour supplies
Importing Marketing
Clearing Documentation
Handling Airlines
Warehousing Shipping
Transporting Docking
Registration Merchandising

57. q9-What is the difference between merchandise exports and imports and service exports and imports

58. q9-What is the difference between merchandise exports and imports and service exports and imports
Merchandise exports and imports usually are a country’s key international economic transactions They are tangible goods sent out or brought in and are visible
Service exports and imports are international earnings other than those derived from the exporting and importing of tangible goods
They cannot be seen and are termed invisible

59. Service exports and Imports
Service exports and imports are international earnings other than those derived from the exporting and importing of tangible goods Earnings received are called service exports and earnings paid are service imports They are also referred to as invisibles
Examples are Tourism and Transportation
Performance of services and
Use of assets

60. q 10-What is meant by Tourism and Transportation

61. q 10-What is meant by Tourism and Transportation
Tourism is about travel and transportation is about movement of goods and people
It requires involvement of many organizations
International tourism and transportation are important sources of revenue for airlines shipping companies travel agencies and hotels
Some countries economies depend heavily on these sectors – e.g. Greece and Norway

62. What is meant by Performance of services
Performance of services are judged by the customers and it could be gauged by the fees they are willing to pay for the services they receive
Some services such as banking insurance engineering and management services net companies earnings in the form of fees that is payments for te performance of those services
At international level Fees are paid for engineering services that are handled through Turn key operations and fees for management services that often result from management contracts

63. What is meant by use of assets
The use of assets such as trademarks, patents, copyrights or expertise under contracts are known as licensing agreements which generate earnings called royalties
Royalties are also paid for franchise contracts