IB AJESH MUKUNDAN

8/8/2019 IB AJESH MUKUNDAN

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INTRODUCTION

TO

INTERNATIONAL BUSINESS

PRESENTED BY

AJESH MUKUNDAN P

3RD SEMESTER



Definition

Business transactions

that take place across national borders

Includes the very small firm that exports (or imports) asmall quantity to only one country, as well as the very

large global firm with integrated operations and

strategic alliances around the world

9/22/2010 Ajesh [email protected],9947426820

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International business include

Product presence in different markets of the world

Production bases across the globe

Investment in international services like banking ,

advertising, retailing and construction

Transactions involving intellectual properties such

as copy rights , patents , trade marks and processtechnology

9/22/2010 Ajesh [email protected],9947426820

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Internationalization of business can be viewed

as a four dimensional construct based on thepremise that an enterprise can be global along

each of major characteristics

9/22/2010 Ajesh Mukundan [email protected],9947426820

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Globalization

Of supply chain

Globalizationof capital

Globalizationof market

presence

Globalization

of corporate

mindset



Globalization of Market Presence

Refers to the extent which a company targets

customers in all major markets within its

industries throughout the world.

On this count the presence of companies vary

from low to high.


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World view (Percentage Regional Distribution of IT Sales for selected

companies in 1993)

Corporate North America Europe Asia

IBM 41 33 16

Fujitsu 6 26 65

HP 51 34 9

NEC 6 4 88

Compaq 45 38 5

Canon 30 29 37

Sun Microsystems 51 24 25

NTT 0 0 100

Microsoft 56 30 9


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Globalization of supply chain

Refers to the extent to which the company is

accessing the most optimal locations for the

performance of various activities in the supply chain.It may be possible for a firm to have a fairly regional

market presence and yet a highly globalized supply

chain


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Globalization of capital base

Refers to the extent to which the company is

accessing optimal sources of capital on a

world wide basis.

± Example :- China.com while operating in Hong

Kong and China .yet in the same year, the

company got itself listed on the US based Nasdaq


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Globalization of corporate mindset

Refers to the ability of the company to

understand and integrate diversity across

cultures, and markets

± Example :- GE serves as a good example of a firm

with an increasingly global mindset. The human

capital is highly globalised-strong worldwide

corporate culture and the composition of theleadership


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MAIN DRIVERS

Technological innovation

Political change

Economic policy


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Technological innovation

Improved the speed of transportation

Lowered their costs ± Jet engines

± containerization in international shipping

± information and communications technology

± new tradable products


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Political change

Chinas economic reforms


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Economic policies

Deregulation

Reduction or elimination of restrictions on

international trade Foreign investment and financial transactions


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Economic Political Technological




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Why International Business ?

Expand Sales

Acquire Resources.

Diversify Sources of Sales and Supplies.

Minimize Competitive Risk


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Reasons for Recent International

Business Growth

Expansion of Technology

Liberalization of Cross-BorderMovements

Development of Supporting Services

Increase in Global Competition

Exports are goods and services


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Advantages and challenges

Productivity

C

onsumers Employment

Monetary and Fiscal Conditions:

Sovereignty


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FACTORS TO BE CONSIDERED


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POLITICAL SYSTEMS

Collectivism and Individualism

Democracy and Totalitarianism


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Democratic political systems

freedom of opinion, expression, press, andfreedom to organize

elections in which voters decide who is to

represent them limited terms for elected officials

an independent and fair court system with highregard for individual rights and property

a nonpolitical bureaucracy defense infrastructure

accessibility to the decision-making process.


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Totalitarianism

Fascism (Mussolini's Italy)

Authoritarianism


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ECONOMIC SYSTEMS

Market Economy

Command Economy

Mixed Economy

State-Directed Economy


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LEGAL SYSTEMS

Property Rights

Intellectual Property

Product Safety and Product Liability

Contract Law

Patents


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MODES OF INTERNATIONAL BUSINESS

Merchandise Exports and Imports

Service Exports and Imports

±

Tourism and Transportation ± Performance of Services

± Use of Assets

Investments

± Portfolio Investment:

± FDI


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Reasons for Expanding into International

Markets

Domestic Market Saturated

Increase market size and extend product life cycle

Enhance your return on invested capital

Enhance location advantages for suppliers orcustomers

Higher Sales, Economies of Scale, RiskDiversification, transfer of knowhow, global

brands etc. Growth Opportunities

Globalization of Market

9/22/2010 Ajesh Mukundan [email protected],9947426820 27



Tom Travis, Managing partner

Sandler, Travis & Rosenberg, PA.

International trade and customs consultantuses the Six Tenets when giving advice on how

to globalize one's business.




1.Take advantage of trade agreements:

think outside the border

± F amiliarize yourself with preference programs and

trade agreements.

± Read the fine print.

± Participate in the process.

± Seize opportunities when they arise.




2.Protect your brand at all costs

± Y ou and your brand are inseparable.

± Y ou must be vigilant in protecting your intellectual

property both at home and abroad.

± Y ou must be vigilant in enforcing your IP rights.

± Protect your worldwide reputation by strict

adherence to labor and human rights standards.




3.Maintain high ethical standards

± Strong ethics translate into good business.

± F orge ethical strategic partnerships.

± Understand corporate accountability laws.

±Become involved with the international business self-regulation movement.

± Develop compliance protocols for import and export operations.

±

Memorialize your company's code of ethics and compliance practices in writing.

± Appoint a leader.




4.Stay secure in an insecure world

± Security requires transparency throughout the

supply chain.

± Participate in trade-government partnerships.

± Make the most of new security measures.

± Secure your data.

± Keep your personnel secure.




5.Expect the Unexpected

± T he unexpected will happen.

± Do your research now.

± Address your particular circumstances.




6.All global business is personal

± Go to the source.

± Keep communications open.

± Keep the home office operational.

± F ly the flag at your overseas locations.

± Relate to offshore associates on a personal level.

± Be available to overseas clients and customers24/7.





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