Griffin IB6e PPT 01B

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

http://www.olympic.org/


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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.

Copyright 2010 Pearson Education, Inc.

publishing as Prentice Hall


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http://images.businessweek.com/sli

deshows/europe/

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Griffin IB6e PPT 01B