5. Ancient International Business V. Gordon Childe -“Man Makes Himself” 6000 – 4000 BC Animal imports from Asia by Sahara People 3000 BC – Trade between India, Mesopotamia & Egypt 5 th BC - Indian merchants Colony in Egypt & SE Asia 100 BC - Silk Route - Xian to Rome Exports: Food Items, Craft Work, Pepper & Spices Imports: Luxury items, Exotic stones etc.
8. Post WW II Developments - 1945 WB (IBRD+IDA) 186 countries - 1945 UN 192 members - 1945 IMF 186 member countries - 1947 GATT now WTO 153 members Change in attitudes – Reconstruction & Self- reliance Bi-polarisation of Geopolitics Creation of Trade Barriers – tariff & non-tariffs 1944 - Britton Woods Agreements & Need for Multilateral Org. for revival & growth of trade 1980 - Disintegration of USSR/End of Cold War
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10. Reasons of Recent International Growth Rapid Increase in Technology Liberalization, Privatization & Globalization Development of Institutions supporting & facilitating International Trade Consumers/Customers Pressure Increased Global Competitiveness
31. Stages of Domestic to Global MGMT. EMPHASIS FOCUS Marketing Strategy Structure Management Style Manufacturing Stance Investment Policy Performance Evaluation STAGE - I DOMESTIC Domestic Domestic Domestic Domestic Mainly Domestic Domestic Domestic Market Area STAGE - II INTL. Ethnocentric Extension International Centralized Top Down Mainly Domestic Domestic used Worldwide Against home Country Mkt. Share STAGE – III MULTINATIONAL Polycentric Adaptation Worldwide Area Decentralized Bottom Up Host Country Mainly in Each Host Country Each Host Country Mkt. Share STAGE - IV GLOBAL Geocentric Extension Adaptation creation matrix/mixed Integrated Lowest Cost Worldwide Cross Subsidization Worldwide
41. PORTER’S DIAMOND MODEL Competitive Advantage of Nations ( Diamond Porter) CHANCE Government FACTOR CONDITIONS DEMAND CONDITIONS Firm Strategy, Structure, and Rivalry Related and Supporting Industries
42. Factor Conditions -Country creates its own skilled resources & technological base - Stock of factors needs to be upgraded and deployed - Disadvantages in factors force innovation Demand Conditions - Local demanding market leads to national advantage - Trend-setting strong local market supports local firms anticipate global trends Related & Supporting Industries - Firms having local supporting competitive industries, enjoy more cost effective & innovative inputs - This effect is strengthened when the suppliers themselves are strong global competitors Firm Strategy, Structure & Rivalry - Local conditions affect firm strategy: . German companies tend to be hierarchical . Italian cos. tend to be small & run more like extended families - Such strategy & structure helps to determine in which types of industries a nation's firms will excel. - While at a single point in time a firm prefers less rivalry, over the long run more local rivalry is better because it puts pressure on firms to innovate and improve. - In fact, high local rivalry results in less global rivalry.
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45. PORTER’S DIAMOND MODEL Competitive Advantage of Nations (aka Diamond Porter) CHANCE Government FACTOR CONDITIONS DEMAND CONDITIONS Firm Strategy, Structure, and Rivalry Related and Supporting Industries
46. Factor Conditions -Country creates its own skilled resources & technological base - Stock of factors needs to be upgraded and deployed - Disadvantages in factors force innovation Demand Conditions - Local demanding market leads to national advantage - Trend-setting strong local market supports local firms anticipate global trends Related & Supporting Industries - Firms having local supporting competitive industries, enjoy more cost effective & innovative inputs - This effect is strengthened when the suppliers themselves are strong global competitors Firm Strategy, Structure & Rivalry - Local conditions affect firm strategy: . German companies tend to be hierarchical . Italian cos. tend to be small & run more like extended families - Such strategy & structure helps to determine in which types of industries a nation's firms will excel. - While at a single point in time a firm prefers less rivalry, over the long run more local rivalry is better because it puts pressure on firms to innovate and improve. - In fact, high local rivalry results in less global rivalry.
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