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International Business

Session Time Topics

One 1000 -1330Relevance in presentday environmentInfluences oninternational businessTypes of International

BusinessOrganizationsfacilitating internationalbusiness

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Levis

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Objectives

To define International Business

To understand factors that affectinternational business

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Organizational compulsions ofinternational expansion

Spreading of risk: Periodic cyclic downturnsand upward swings

To strengthen bottom line: Limitation ofdomestic population

To strengthen resource base: Increased in

inexpensive resource base

Personal ambitions of the policy making

body/individual: Bias

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Bandwagon Effect

Denial of First Mover Benefits to theCompetitors

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Technological developments and their

rapid diffusion at global scale

Dismantling of trade barriers

Emergence of business facilitators

Increasing limitation in terms of growth

presented by domestic markets

Influences on InternationalBusiness

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Conducting of InternationalBusiness

Goods

Services

Portfolio Capital

Direct Investment

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Exports and Imports

Visible exports and imports

Service exports and imports Tourism and Transportation Performing Services Assets Utilization

Portfolio Capital Marketable Securities Non - Marketable Investments

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Direct Investments

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Global and Multi Domestic

Organizations

Organization can be both

Global in some operational domains and

multidomestic in other operationaldomains

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Environments

Internal environments

External environments

Proximate environments

Distant environments

Constituents of external environments

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Environment & InternationalBusiness

Geography History

Psychology Economics

Social Sciences Legal system Political system

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The Perspective of

Competition

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Competitive Environment

Every firm operates within its competitiveenvironment

Competitive factors

1. Product Homogeneous

Compete more on price

Strategies emphasize cost saving by

Superior equipment, technology, economies of scale -Steel

Differentiated

Shakira and Pt. Ravi Shankar

Innovative

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2. Organization Size

Larger the organization

larger theresources relative to competitors

>Coke and Royal Crown

3. Market Size

Larger domestic market size invitescompetition less incentive for goinginternational

>Whirlpool from USSmaller market size needs expansionstrategy and investment in overseasmarkets

> Electrolux from Sweden

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4. Nature of Competition

International Boeing and Airbus

Local

Wal Mart in India competing with next door

grocer

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Firm Process ofInternationalization

Innovative Related Models

Sequential development

No regular export activity

Export through independentrepresentatives or agents

Establishment of an overseas salessubsidiary

Overseas production facility

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Psychic Distances

Uppsala Models

Totally disinterested firm

Partially interested firm Exploring firm

The experimental firm, undertaking

exports on experimental basis Experienced small exporting firm

Experienced large exporting firm

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Leapfrogging

Extent and intensity of commitment Transferability of experiential

knowledge

Collaborative arrangements

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Environmental ForcesComplicating Decision-makingin International Business

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