MODULE 01 .

International Business

Meaning

Carrying Business Activities Across National Boundaries.

Good, Capital & Services.Technology, Skills, Transportation.Banking, Insurance, Finance etc.Now FII, FDI, Equity etc.Globalised Village.

Contd..

Need- No Country Produce Everything.Needs FE hence exports- BOP.Profit motives also- Coke/Pepsi.Merger and Acquisition.Firms Profit Strategy.Minimize Cost and Enhance Profits.Manufacturing Base in the Demand Markets.

Defination

Terpstra & Sarathy- Finding out what customer wants around the world and then satisfying these wants better then other competitor, both domestic and international.

Keegan- It is the process of focusing the resources – people, money and physical assets- and objective of an organisation on global market opportunities and threats.

Domestic Vs International

Taxes.Tariffs.Rules and Regulations.Cultural and Social Environment.Political and Legal Environment.Risk Factors.Less Management Control.

Role of MNC’s

FDI in Economy.Cluster of Firms.Common Ownership.Common pool of Resources.Respond to Common Strategy.

Development of IB

Trade.Assembly or Production.Integration of Policies.Rapid Technological Advancement.Emergence of Supportive Institution.Openness of Economies.Increase in Competition.

Globalisation

Bretton Wood Conference.Formation of GATT/WTO/IMF/WB/UN etc.Elimination of Tariffs.Reduction of Subsidies.World Exports grew from 8.5% in 1970 to

16% in 2011.Movement of Good, Services, Capital,

Technology without restrictions.

Impact of Globalisation

Fall of Protective Barriers.International Competition.Necessary to maximise reach.Reduce Cost.Improve Quality.Latest Technological Changes.Diversification of Product.Enhancement of Manpower Skills.

Benefits of Globalisation.

Industrial.Financial.Economic.Political.Competition.Ecological.Cultural and Social.Technological.Profits and Growth.

Disadvantages of Globalisation

Power of MNC- Coke/Pepsi Vs Thumps Up/ Campa Cola.

Poorer Countries Effect.Exploitation of Labour.Shift to Out Sourcing.Child Labour.Environmental Issues.FTA /Regional Blocks vs Developing

Countries.

Contd

Formation of Cartels.Mixing of Political agenda with Economic

agenda.Non Tariff Barriers.Antidumping Duties.Continuation of Subsidies under Red Box.Trade with certain Regional Block.

International Business Decisions

SWOT Analysis of the Company.Market Selection Decision.Entry and Operating Decision.Marketing Mix Decision.International Organisation decision.

Types of International Business

Trading.Manufacturing and Marketing.Sourcing and Marketing.Global Sourcing and Marketing.Market Entry and Operations.

- Exporting –Direct & Indirect.- Contractual- Licensing/ Franchising/Contract Manufacturing etc.- Production and Assembly Facilities

Global Sourcing

Lower Prices.Better Quality.Only Source Available.More Advanced Technology.More Consistent Attitude .More Cooperative Delivery.Counter Trade Requirement.