Introduction to International Business Chapter 1

8/3/2019 Introduction to International Business Chapter 1

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AN OVERVIEW OF INTERNATIONALBUSINESS


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Chapter ObjectivesDiscuss the meaning of internationalbusiness

Explain the importance of understanding

international businessIdentify and describe the basic forms of

international business activities

Discuss the causes of globalization

Comprehend the growing role of emergingmarkets in the global economy


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THE OLYMPIC


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The Business of the OlympicsIntense reflection of

international business

Government of games by IOC

Competition for hosting

Revenue sources for theOlympics

Broadcast rights

Corporate sponsorships


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What Is International

Business?Business transactions between parties from

more than one country

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall


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Who Are The PartiesInvolved?

Private individuals

Individual companies

Groups of companies

Governmental agencies


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How Does International Business

Differ from Domestic?Currency conversion

Legal systems

CultureAvailability of resources


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Activity:What are the currencies of Brunei, Thailand,

England and France?

Can you identify some cultural differencesbetween Malaysians and Arabs?

Can you think of various aspects to considerwhen doing business in Muslim countries?


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Why Study International

Business?Large organizations

Job assignment

Small businessesCompetitors

Business techniques and tools

Cultural literacy


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International Business

ActivitiesExporting and Importing(E&I)

International Investments(2Is)

Licensing, Franchising, andManagement Contracts(LFMC)


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Exporting and ImportingExporting: selling of products made in ones

own country for use or resale in othercountries

Importing: buying of products made in othercountries for use or resale in ones owncountry

WHO IS THE BIGGEST TRADE PARTNER FORMALAYSIA?

WHAT DO WE NORMALLY IMPORT AND EXPORT?


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Visible and Invisible

TradeTrade in Goods

Merchandise exports and imports

Visible tradeTrade in Services

Service exports and imports

Invisible trade


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International InvestmentsCapital supplied by residents of one country

to residents of another

Two categories:Foreign direct investments

Portfolio investments


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Other Forms of

International Business Activity

Management

contracts

FranchisingLicensing


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International LicensingContractual arrangement

Allow its intellectual property to be used byproviding license to secondary party

Secondary party will provide royalty in return.


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Management ContractOne countries agreed to operate facilities or

provide other management services to a firmin another country for an agreed-upon fee.


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International FranchisingA specialized form of international licensing.

However, primary party allow secondary party

to operate exactly as the parent company runtheir business.


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Contemporary Causes of

GlobalizationStrategic Imperatives

To leverage core competencies

To acquire resources and suppliesTo seek new markets

To better compete with rivals


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Environmental Change and

Globalization

Changes in

Political

Environments

Technological

Changes

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall


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Globalization and

Emerging MarketsBrazil / Argentina

RussiaIndiaChina

BRIC


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Globalization and

Emerging Markets (continued)Big Ten

Argentina Brazil China

South Korea Indonesia MexicoPoland Turkey India

South Africa

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Online AssignmentWhy does Aussie floods may affect TNBs fuel

costs?

ESSAY FORM IN ONE PAGE ONLY.

STANDARD REPORT WRITING.

Due date: 12/01/2011, Wednesday,12.00pm

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Introduction to International Business Chapter 1