2. Reasons to Enter into IB
Individual Angle Government Angle
1. Managing the product life cycle 1. Earning valuable foreign exchange
2. Geographic expansion as a growth
strategy
2. Interdependency of Nations
3. The adventurous spirit of the
younger generation
3. Trade theories and their impact.
(Absolute advantage, comparative
advantage etc)
4. Corporate ambition 4. Diplomatic relations
5. Technology advantage 5. Core Competency of nations
6. Building corporate image 6. Investment for infrastructure.
7. Incentives and business impact 7. National Image
8. Labour Advantage 8. Foreign trade policy and targets
9. New business oppurtunities 9.WTO and International Agencies
10. Emergence of SEZ’s , EOU’s , AEZ
3. Benefits of International Business
New Markets for domestically produces goods
Introduction of new products into domestic markets.
Access to different resources,
More economic and efficient production
Increased domestic security and independence
Reduces its dependence on domestic crops.
Helps in stabilizing market fluctuations.
Economic Development
Optimum use an allocation of resources
Employment
Healthy Competition
Technological Progress
Efficiency
Increase in Investment
Enhancement of Consumer Welfare.
4. Certain Disadvantages
High Initial Costs of entering a new foreign market
Strict International Trade Laws
Challenge for domestic producers
5. International Trade Risks
Poor Quality Risk
Transportation Risk
Political Risk
Legal Risk
Unforeseen Risk
Credit Risk
Exchange Rate Risk
Quality of the products should be
assured or else chances of getting
rejected in high
Theft ,damage, goods not arriving on
time etc.
Government policy or political
instability
International laws and regulations
change frequently.
Terrorist attack , natural disaster etc
Checking the creditworthiness and
reputation of an importer
Uncertainty of future value of currency
6. Challenges of International Trade
Global Trade Practices
Role of Culture and
Language
Foreign Politics
Economic and Financial
Challenges
Social Factors
Natural Environment
Exchange Rate
movements.
Methods of managing business
should be good.
Different attitudes, culture ,
language, acceptance etc.
Change in foreign government can
change our action plans.
International financial crisis, oil
rate changes etc.
Population levels, youth etc
Water and air should be retained
7. Challenges of International Trade
Global Trade Practices
Role of Culture and
Language
Foreign Politics
Economic and Financial
Challenges
Social Factors
Natural Environment
Exchange Rate
movements.
Methods of managing business
should be good.
Different attitudes, culture ,
language, acceptance etc.
Change in foreign government can
change our action plans.
International financial crisis, oil
rate changes etc.
Population levels, youth etc
Water and air should be retained
Editor's Notes
1. Im high and exports low – deficit and vice versa.2. we depends on crude oil for gulf. They depends us for tea rice etc. 3. This plays a vital role in usage of resources. 4. Indian embassies and high commissions in all countries 5. Wool from Australia, Rubber products from Malaysia etc. (main strength ) 6. infrastructure related trade activities. Hong Kong etc invets in such things. 7. Made in INDIA, Japan etc 8. Agenda and action plan on production promotion and competitiveness. 9. regulatory bodies of business