Introduction to International Business

1. INTERNATIONAL
BUSINESS
Presented by
Simran Kaur
MBA 2nd year
IGICM

2. Introduction of IB
• Business activity or transaction that transcends the national boundary
• According to Terpstra and Sarathy,” finding out what customers want around
the world and then satisfying these wants better than other competitors, both
domestic and international”.
• Dual aspects: Foreign market and Global market

3. Why Go International?
• Profit advantage
• Growth opportunities
• Competition
• Spin-offs of IB
• Strategic vision

4. Types of IB
• Trading
• Manufacturing and marketing
• Sourcing and marketing
• Global sourcing for production
• Market entry and operating forms

5. IB decision
• IB decision
1. Company objectives
2. Company resources
3. Market potential
4. Environmental factors
• Market selection decision

6. IB decision(contd.)
• Entry and operating decision
• Marketing mix decision
1. Promotion
2. Product
3. Distribution
4. Price

7. IB decisions(contd.)
• International organization and HR decisions

8. Globalization of markets
• IMF defines “growing economic interdependence of countries worldwide”.
• Global village combines technological and communication revolutions.
• Views the entire world as a single market.

9. Stages of Globalization
• Stage 1: Service activity of linking up with local dealers and distributors
• Stage 2: Company takes over these activities on its own.
• Stage 3: Domestic based company to carry out in the key foreign markets.
• Stage 4: Company moves to full insider position.
• Stage 5: Company moves towards a genuinely global mode of operations.

10. Essential conditions of Globalization
• Business freedom
• Infrastructural facilities
• Government support
• Resources
• Competitiveness
• Orientation

11. Ill-effects of Globalization
• Global dominance of industries by MNCs is an increase
• Many countries are indiscriminate in liberalizing foreign investment
• Some countries allow high foreign stake even where not required
• Takeover of national firms by foreign firms
• Nexus between MNCs and Governments cause large foreign exchange
• Replacement of traditional and indigenous products by modern products

12. Ill-effects of Globalization(contd.)
• Technology brought may not be suited to host country
• MNCs dump obsolete technology to developing world
• Demand-supply factor
• Some of developing countries will lose because of removal of MFA

13. Benefits of Globalization
• Foreign capital can rise economic development of the nation
• Productivity grows quickly
• Increase in competition
• Inflation is less likely to derail economic growth
• Enhance consumer choice
• Brings fresh ideas from abroad

14. Benefits of Globalization(contd.)
• Export jobs pay more than other jobs
• Enormous domestic and global opportunities
• Chances of developing countries benefiting from trade

15. Challenges of Globalization
• Unrealistic to expect pattern of flow to be different
• Increases economic inequality
• Serious challenge to Governments to ensure fair competition
• Favorable political mandate
• Economy growth should be fast to absorb displaced labour

16. THANK YOU!!!