INTERNATIONAL BUSINESS

1. INTERNATIONAL
BUSINESS
GEETA MALIK
Assistant Professor
Advanced Educational Institution
www.advanced.edu.in

2. Learning Objectives
To learn the definition of international
business.
To understand the nature, scope &
characteristics of international business.
To recognize the need & types of
international business.
To define the global links of various
international businesses.
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3. Learning Objectives
To understand the recent changes in
International Business.
Reasons for changes
Problems in International Business
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4. Meaning For International
Business…
A specific entity, such as a multinational
corporation or international business
company that engages in business
among multiple countries.
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5. Nature of International
Business
1. Accurate Information
2. Information not only accurate but
should be timely
3. The size of the international
business should be large
4. Market segmentation based on
geographic segmentation
5. International markets have more
potential than domestic markets
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6. Scope of International
Business
1. International Marketing.
2. International Finance and
Investments.
3. Global HR.
4. Foreign Exchange.
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7. Characteristics of
International Business…
Domestic Environment
 All the uncontrollable forces in the home country
that surround and influence the firm’s life and
development
 Shortage of foreign currency
 FDI in home country
 Foreign Environment
 All the uncontrollable forces originating outside
the home country that surround and influence the
firm
 different values (Conflict: bypass country A to serve B)
 difficult to assess (Clause: quality of welfare/life)
 Interrelated (Technology vs. mass labor)
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8. Characteristics of
International Business
International Environment
 Interaction between domestic and foreign
environmental forces
 Intl. Organizations (WTO, NAFTA…) affect businesses
 Decisions are linked to other subsidiaries (strike)
 Decision making more complex
 Prefer time off vs. more money
 Cultural differences
 Self-reference criterion: decisions based on your own
cultural values
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9. 9
Need for International
Business
• More and more firms around the
world are going global, including:
– Manufacturing firms
– Service companies (i.e. banks, insurance,
consulting firms)
– Art, film, and music companies
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10. Need for International
Business
International business:
causes the flow of ideas, services, and
capital across the world
offers consumers new choices
permits the acquisition of a wider
variety of products
facilitates the mobility of labor, capital,
and technology
provides challenging employment
opportunities
reallocates resources, makes
preferential choices, and shifts activities
to a global level
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11. Types of International
Business
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Export-import trade
Foreign direct
investment
Licensing
Franchising
Management contracts
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12. Global Links Today
International business has created a network
of global links that bind countries,
institutions, and individuals with trade,
financial markets, technology, and living
standards.
For example, a reduction in coffee production in
Brazil would affect individuals and economies
worldwide.
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13. Recent Changes in
International Business
•Total world trade declined dramatically after
2000, but is again on the rise.
•The rate of globalization is accelerating.
•Regionalization is taking place, resulting in
trading blocs.
•The participation of countries in world trade is
shifting.
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14. Reasons for Recent
International Business Growth
1. Expansion of technology
2. Business is becoming more global because
•Transportation is quicker
•Communications enable control from afar
•Transportation and communications costs are more
conducive for international operations
3. Liberalization of cross-border movements
4. Lower Governmental barriers to the movement of goods,
services, and resources enable Companies to take better
advantage of international opportunities
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15. Problems in International
Business
1. Political factors
2. High foreign investments and high cost
3. Exchange instability
4. Entry requirements
5. Tariffs, quota etc.
6. Corruption and bureaucracy
7. Technological policy
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16. CONCLUSION
We can conclude by saying that
International Business is a much wider
term and includes both trade and
production of goods and services across
frontiers.
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17. GEETA MALIK
Assistant Professor
Advanced Educational Institute
Advanced Educational Institutions,
70 km Milestone,
Delhi-Mathura Road, Dist. Palwal, Haryana-121105
+91–1275–398400, 302222
gmalik16@gmail.com
www.advanced.edu.in
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