Slides on International business

1. INTERNATIONAL
BUSINESS

2. INTRODUCTION
 Any business with international sales, sourcing
or investment.
 International business consists of transactions
that are devised and carried out across national
borders to satisfy the objectives of individuals,
companies, and organizations.
 It includes international trade and foreign
manufacturing.
 It also includes a growing service industry in
areas such as: transportation, tourism,
advertising, construction, retailing, wholesaling,
and mass communication.

3. International Business is all business
transactions that involve two or more
countries.
International Business comprises a
large and growing portion of the
world’s total business.
International Business usually takes
place within a more diverse external
environment.
International trade is a vital part of the
economy. Trade has contributed to
world wide economic growth.

4. COMPONENTS OF INTERNATIONAL BUSINESS:
International trade/Sales (Import/
export)
International Investment (Direct &
portfolio Investment)
International Transportation

5. DIMENSIONS OF INTERNATIONAL BUSINESS
 Many types of parties can enter into the
international business activities.
 Government of nations are the permanent
institutions that can also get involved in such
activities, whereas the business firms are already
into international business conventionally.
 G2B
 G2G
 B2B
 B2G
 B2C

6. CHARACTERISTICS OF INTERNATIONAL BUSINESS
 Multiple countries involved in business
 Resulting from economic interdependence among
the countries.
 Use of Multiple currencies exchanged with
international currencies
 Based on Free Market Economy
 Involved in movement of products across borders
 Based on free flow of factors of production
 Impact of different economic systems
 Resulting in standardized technology
 Concerned with MNCs with global image.

7. IMPORTANCE OF INTERNATIONAL BUSINESS
Economies of scale
Access resources·
Better opportunities
Distribution of risk/Risk reduction
Development of managerial skills
experience
liberalization
New technology
Market expansion
Networking

8. FACTORS CONTRIBUTING TO RAPID GROWTH OF
INTERNATIONAL BUSINESS
 Increase in and expansion of technology
 Liberalization of cross-border trade and resource
movements
 Development of services that support international
business
 Growing consumer pressures
 Increased global competition
 Changing political situations
 Expanded cross-national cooperation

9. CHALLENGES OF INTERNATIONAL BUSINESS
Need of new strategies
Competition
Information gaps
Management skills

10. INTERNATIONAL BUSINESS VS DOMESTIC
BUSINESS
 Difference in Legal system
 Difference in political system
 Difference in social environment
 Difference in currencies
 Difference in business practices
 Difference in technology
 Difference in wider market
 Difference in high transportation cost.

11. INTERNATIONAL BUSINESS CAN DIFFER FROM DOMESTIC
BUSINESS FOR A NUMBER OF REASONS, INCLUDING THE
FOLLOWING:
 Use of Currency: The countries involved may use different currencies,
forcing at least one party to convert its currency into another.
 Legal System: The legal systems of the countries may differ, forcing one or
more parties to adjust their practices to comply with local law.
 Resources: The availability of resources differs by country; the way
products are produced and the types of products that are produced vary
among countries.
 Distance: The distance involved in export of goods in external trade is
generally greater than on the domestic trade.
 Language differences: There are differences in the languages of the nations
of the world. The overseas traders should be very careful in preparing the
publicity material in the languages of the trading country.
 Cultural difference: A producer should have full knowledge about the
market of his products. For exporting goods particularly a thorough research
is undertaken.