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Transcript of IB AJESH MUKUNDAN
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INTRODUCTION
TO
INTERNATIONAL BUSINESS
PRESENTED BY
AJESH MUKUNDAN P
3RD SEMESTER
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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
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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
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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
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Globalization
Of supply chain
Globalizationof capital
Globalizationof market
presence
Globalization
of corporate
mindset
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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
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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.
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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.
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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.
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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.
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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.
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5.Expect the Unexpected
± T he unexpected will happen.
± Do your research now.
± Address your particular circumstances.
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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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