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7/31/2019 Griffin IB6e PPT 01B
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chapter 1
An Overview
ofInternational
Business
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Internatio
nalBusines
s,6th
Editio
n
Griffin & Pustay
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Chapter Objectives
Discuss the meaning of internationalbusiness
Explain the importance of understandinginternational business
Identify and describe the basic forms ofinternational business activities
Discuss the causes of globalization
Comprehend the growing role ofemerging markets in the global economy
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The Business of the Olympics
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The Business of the Olympics(continued)
Intense reflection of international
business
Government of games by IOC
Competition for hosting
Revenue sources for the Olympics
Broadcast rights
Corporate sponsorships
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What Is InternationalBusiness?
Business transactions between
parties from more than one country
Parties may include:
Private individuals
Individual companies
Groups of companies
Governmental agencies
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How Does International BusinessDiffer from Domestic?
Currency conversion
Legal systems
Culture
Availability of resources
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Why Study InternationalBusiness?
Large organizations
Foreign-owned subsidiaries
Small businesses
Competitors
Business techniques and tools
Cultural literacy
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InternationalBusiness Activities
Exporting and Importing
International Investments
Licensing, Franchising, and
Management Contracts
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Exporting and Importing
Exporting: selling of products made
in ones own country for use or
resale in other countries
Importing: buying of products made
in other countries for use or resale
in ones own country
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Visible and Invisible Trade
Trade in Goods
Merchandise exports and imports
Visible trade
Trade in Services
Service exports and imports
Invisible trade
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International Investments
Capital supplied by residents of one
country to residents of another
Two categories:
Foreign direct investments
Portfolio investments
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Figure 1.1 Exports as a % of GDP
82.9
39.7
31.828.8
21.417.8
10.8
14.5
27.1
35.7
75
44.1
0
10
20
30
40
50
60
70
80
90
Nethe
rland
s
Thail
and
Germ
any
China
Cana
da
Mex
ico
Unit
edKing
dom
Fran
ceInd
iaJap
anBr
azil
Unite
dStat
es
PercentageofGDP
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Other Forms ofInternational Business Activity
Management
contracts
FranchisingLicensing
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Licensing
Licensing is a contractual
arrangement in which a firmin one country licenses theuse of its intellectual propertyto a firm in another country in
exchange for a royaltypayment.
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Franchising
Franchising is a specialized formof licensing which occurs when afirm in one country authorizes a
firm in another to utilize itsoperating systems as well as itsbrand names, trademarks, andlogos for a royalty payment.
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Multinational Corporations(MNCs)
Engage in foreign direct investment
Own and control foreign assets
Buy resources in multiple countries
Create goods and services in multiple
countries
Sell goods and services in multiple
countries
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Table 1.1 TheWorlds LargestMNCs
Wal-Mart
Exxon Mobil
Royal Dutch Shell
BP
Toyota Motor
Chevron
ING Group
Total
General Motors
ConocoPhillips
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The Era of Globalization
Globalization: the inexorable integration
of markets, nation-states, and
technologiesin a way that is enabling
individuals, corporations and nation-
states to reach around the world farther,
faster, deeper, and cheaper than everbefore
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Figure 1.2 World Exportsas a % of World GDP
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Figure 1.3 Foreign DirectInvestment Relative to World GDP
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Contemporary Causes ofGlobalization
Strategic Imperatives
To leverage core competencies
To acquire resources and supplies
To seek new markets
To better compete with rivals
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Environmental Change andGlobalization
Changes in
Political
Environments
Technological
Changes
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Globalization andEmerging Markets
BRIC
Brazil / Argentina
Russia
India
China
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Globalization andEmerging Markets (continued)
Big Ten
Argentina Brazil China
South Korea Indonesia Mexico
Poland Turkey India
South Africa
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Framework of Book
The Worlds Marketplaces
International Environment
Managing International Business
Managing International Business
Operations
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All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical,photocopying, recording, or otherwise, without the priorwritten permission of the publisher. Printed in the United
States of America.
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publishing as Prentice Hall
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http://images.businessweek.com/sli
deshows/europe/
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