1. International Business
Globalisation

3. Definitions Globalisation:
The broadening set of interdependent relationships among people from different parts of the world that happens to be divided into nations
The integration of world economies through the reduction of barriers to the movement of trade, capital, technology and people
Daniels J D et al (2009)

4. Examples Kia Sorrento - Korean Car
Japanese firm furnishes CD player in the car
Optical pick-up units made in China
Thailand adds electrical components
Assembly in Mexico
Transported from US port to Korea
Installed in vehicle and transported around the world

5. International business Definition
All commercial transactions - including sales, investment and transportation that takes place – between two or more countries private companies undertake such transactions for profit; governments undertake them for either profit or political reasons

6. Forces Driving Globalisation
Economic – international trade and investment
Technological - internet connectivity, and broadband
Personal contact – international travel and tourism, international telephone traffic and personal transfers of funds internationally
Political – participation in international organisations and government monetary transfers
Question :Which countries are the most globalised?
Singapore and Hong Kong most
India and Iran least Economic
US 1st on technological scale but 71st on the economic scale

7. Factors in increased Globalisation
Increase in expansion of technology
Liberalisation of cross-border trade and resource movements
Development of services that support international business
Growing consumer pressures
Increased global competition
Changing political situations
Expanded cross-national cooperation

8. Why companies engage in international business
Expanding sales - higher sales create value, as long as costs of sales doesn’t increase disproportionately
Acquiring resources - lower costs, new or better products, additional operating knowledge
Minimising risk - smoothing sales and profits, preventing competitors from gaining advantage

9. Is Offshoring good Strategy?
offshoring is the process of shifting production to a foreign country
If offshoring succeeds in reducing costs it’s good
Example: branded clothing companies offshore to have work done by cheaper sewing machine operators

10. Modes of operation in international business
Merchandise exports and imports - are usually a country’s most common international transaction (Visible and tangible)
Service exports and imports – non product sales and purchases, travel, transportation, banking, insurance and the use of assets such as trademarks, patents and copyright
Investments – Foreign Direct Investment – takes a controlling interest in a foreign company, or if shared ownership it becomes a Joint Venture
Portfolio investment – non-controlling interest of a foreign operation – stock in a company or loans to a company (or country)