1. Datta Meghe Institute of Management Studies 1 Teaching Innovation - Entrepreneurial - Global The Centre for Technology enabled Teaching & Learning, N Y S S, India DTEL DTEL (Department for Technology Enhanced Learning)

2. Datta Meghe Institute of Management Studies INTERNATIONAL BUSINESS UNIT 1: INTERNATIONAL TRADE MBA DEPARTMENT 2

3. Datta Meghe Institute of Management Studies SYLLABUS International Trade: Origin, Need & Importance 3

4. Datta Meghe Institute of Management Studies Learning Objectives To study the concept of international business and international trade. To study the need and importance of doing international business. To study the concept of international business and international trade. To study the need and importance of doing international business. 4

5. Datta Meghe Institute of Management Studies INTRODUCTION Did you know the tea you drink might be prepared from the tea powder produced in Sri Lanka, the spares and hard disk of the computer you operate might have been produced in the USA, the perfume you apply might have been produced in France, the television you watch might have been produced with the Japanese technology, the shoe you wear might have been produced in Taiwan, but remarketed by an Italian company and so on so forth. Most of you have the experience of browsing internet and visiting different websites, knowing the products and services offered by various companies across the globe. This process gives you the opportunity of transacting in the international business arena without visiting or knowing the various countries and companies across the globe. Did you know the tea you drink might be prepared from the tea powder produced in Sri Lanka, the spares and hard disk of the computer you operate might have been produced in the USA, the perfume you apply might have been produced in France, the television you watch might have been produced with the Japanese technology, the shoe you wear might have been produced in Taiwan, but remarketed by an Italian company and so on so forth. Most of you have the experience of browsing internet and visiting different websites, knowing the products and services offered by various companies across the globe. This process gives you the opportunity of transacting in the international business arena without visiting or knowing the various countries and companies across the globe. 5 UNIT I

6. Datta Meghe Institute of Management Studies INTRODUCTION You get all these even without visiting or knowing the country of the company where they are produced. All these activities have become a reality due to the operations and activities of International business. “thus international business is the process of focusing on the resources of the globe and objectives of the organizations on global business opportunities and threats” You get all these even without visiting or knowing the country of the company where they are produced. All these activities have become a reality due to the operations and activities of International business. “thus international business is the process of focusing on the resources of the globe and objectives of the organizations on global business opportunities and threats” 6 UNIT I

7. Datta Meghe Institute of Management Studies CONCEPT OF INTERNATIONAL BUSINESS In simple terms, international business implies the conduct of business activities beyond the national boundaries. It is a much wider term comprising all the commercial transactions taking place between two countries. These transactions, including sales, investment, and transportation may take place by government or private companies with or without an objective to make profit. International Business may be defined as: “all those business activities that involve cross border transactions of goods, services, and resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services”. In simple terms, international business implies the conduct of business activities beyond the national boundaries. It is a much wider term comprising all the commercial transactions taking place between two countries. These transactions, including sales, investment, and transportation may take place by government or private companies with or without an objective to make profit. International Business may be defined as: “all those business activities that involve cross border transactions of goods, services, and resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services”. 7 UNIT I

8. Datta Meghe Institute of Management Studies INTERNATIONAL TRADE It refers to exports and imports of goods and services by a firm to a foreign based buyer (importer) or from a seller (exporter). 8

9. Datta Meghe Institute of Management Studies WHY STUDY INTERNATIONAL BUSINESS? To keep the youngster prepared to accept jobs in multinational corporations. To be aware of international brands To manage various factors of production. (e.g. production in China, labor from India, machines from US, resources/raw materials from Tanzania and marketing & services all over the world) To get a proper and appropriate perspective about the role of political environment on global business To keep the youngster prepared to accept jobs in multinational corporations. To be aware of international brands To manage various factors of production. (e.g. production in China, labor from India, machines from US, resources/raw materials from Tanzania and marketing & services all over the world) To get a proper and appropriate perspective about the role of political environment on global business 9 UNIT I

10. Datta Meghe Institute of Management Studies NEED AND IMPORTANCE OF INTERNATIONAL BUSINESS To achieve higher Rate of Profits Expanding the Production Capacities beyond the Demand of the Domestic Country Severe Competition in the Home Country Limited Home Market Political Instability Availability of Technology and Managerial Competence High Cost of Transportation Nearness to Raw Materials To achieve higher Rate of Profits Expanding the Production Capacities beyond the Demand of the Domestic Country Severe Competition in the Home Country Limited Home Market Political Instability Availability of Technology and Managerial Competence High Cost of Transportation Nearness to Raw Materials 10 UNIT I

11. Datta Meghe Institute of Management Studies NEED AND IMPORTANCE OF INTERNATIONAL BUSINESS Availability of Quality Human Resource at Less Cost Liberalization and Globalization To avoid Tariffs and Import Quotas Uniqueness of product or service Risk Spread Availability of Quality Human Resource at Less Cost Liberalization and Globalization To avoid Tariffs and Import Quotas Uniqueness of product or service Risk Spread 11

12. Datta Meghe Institute of Management Studies STAGES OF INTERNATIONALISATION DOMESTIC COMPANY INTERANTIONAL COMPANY MULTINATIONAL COMPANY GLOBAL COMPANY TRANSNATIONAL COMPANY DOMESTIC COMPANY INTERANTIONAL COMPANY MULTINATIONAL COMPANY GLOBAL COMPANY TRANSNATIONAL COMPANY 12 UNIT I