2. INTRODUCTION
International Business conducts business
transactions all over the world. These transactions
include the
transfer of goods, services, technology,
managerial knowledge, and capital to other
countries.
International business involves exports and imports.
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3. INTERNATIONAL BUSINESS
International business is defined as commercial
transactions that occur across country borders.
When a company sells products in the US, Japan
and throughout Europe, this is an example
of international business.
All commercial transactions—including sales,
investments, and transportation—that take place
between two or more countries
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4. DEFINATION OF INTERNATIONAL
BUSINESS
• IB means carrying on business activities( like
goods, capital) beyond national boundaries.
• IB is defined as the organization that buys /sell
goods and services across two or more
national boundaries, even if management is
located in a single country.
• International Business is also known as Global
Business
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6. NATURE OF INTERNATIONAL BUSINESS
Involvement of commercial activity
Surrounded with political risk
Proactive or Reactive
Differs from domestic business
Large scale operations
Sensitive nature
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7. FEATURES
Large scale operations
Integration of economies
Focus by developed countries and MNCs
Benefits to participating countries
Keen competition
Special role of technology
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8. IMPORTANCE OF
INTERNATIONAL BUSINESS
Increased socio –economic welfare
It opens new opportunities
It gives new technologies
Optimum utilization of resources
Provides quality products
It helps in earning foreign exchange
High living standards
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9. MODES OF OPERATION IN INTERNATIONAL
BUSINESS
Merchandise exports and imports
Service exports and imports
Tourism and Transportation
Service Performance
Asset Use
Investments
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10. TYPES OF INTERNATIONAL BUSINESS
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Export-import trade
Foreign direct
investment
Licensing
Franchising
Management contracts
11. EXPORT-IMPORT TRADE
An import in the receiving country is an export from
the sending country.
Importation and exportation are the defining financial
transactions of international trade.
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12. FOREIGN DIRECT INVESTMENT
A foreign direct investment (FDI) is a controlling
ownership in a business enterprise in one country
by an entity based in another country.
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13. LICENSING
A business arrangement in which
one company gives
another company permission to
manufacture its product for a specified
payment . There are few faster or more
profitable ways to grow your business than
by licensing patents, trademarks,
copyrights, designs, and other intellectual
property to others.
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14. FRANCHISING
According to the International Franchise
Association (IFA), franchising is defined as an
agreement or license between two legally
independent parties which gives:
A person or group of people (the franchisee) the
right to market a product or service using the
trademark or trade name of another business (the
franchisor)
The franchisee the right to market a product or
service using the operating methods of the
franchisor
The franchisee the obligation to pay the franchisor
fees for these rights
The franchisor the obligation to provide rights and
support to franchisees
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15. MANAGEMENT CONTRACTS
Agreement between investors or owners of
a project, and a management company hired for
coordinating and overseeing a contract. It spells out
the conditions and duration of the agreement, and
the method of computing management fees.
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16. INTERNATIONAL BUSINESS
ENVIRONMENT
Economic environment( per capita/economic
development)
Legal environment(methods to regulate business
practices)
Political environment( changes in government
policies)
Social environment( importance of society)
Cultural environment(beliefs ,values)
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17. ENVIRONMENTAL CHALLENGES OF
INTERNATIONAL MANAGEMENT
Economic system: most
countries today are
moving toward market
economies.
Natural resources:
different countries have
various availability of
natural resources.
Infrastructure: the
schools, hospitals, power
plants, railroads,
highways, ports,
communication systems,
air fields, and commercial
distribution systems of a
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19. RECENT CHANGES IN INTERNATIONAL
BUSINESS
Total world trade declined dramatically after
2000, but is again on the rise.
The rate of globalization is accelerating.
Regionalization is taking place, resulting in
trading blocs.
The participation of countries in world trade is
shifting.
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20. GLOBALIZATION
Because of globalization, for the first time in history,
the availability of international products and services
can be accessed by individuals in many countries,
from diverse economic backgrounds.
Globalization means integration with the world economy .
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23. GLOBALIZATION OF MARKET
Refers to the process of integrate the world market
in to a single market
Ex- A no of consumers products have global
acceptance like coca –cola, Pepsi, levis jeans.
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24. REASONS FOR GLOBALIZATION OF MARKET
Increase profits
Growth opportunity
Risk reduction
Competition
To cater the demand of the foreign market
Mass production
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25. TRENDS IN GLOBALIZATION
Cooperation among countries
Liberalization of cross border movements
Transfer of Technology
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31. BENEFITS OF GLOBALIZATION
Increase in Employment & Income
Balanced Human development
Lower price with higher quality
Free flow of technology
Increase in production and consumption
Transportation
Goods and services
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32. PROCESSES OF GLOBALIZATION (CONT’D)
Strategic alliance: a
cooperative arrangement
between two or more firms for
mutual gain.
Joint venture: a special type of
strategic alliance in which the
partners share ownership of a
new enterprise.
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33. PROCESSES OF GLOBALIZATION (CONT’D)
Direct investment: when a firm headquartered in
one country builds or purchases operating facilities
or subsidiaries in a foreign country.
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