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Intro to international business


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international business introduction

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Intro to international business

  1. 1. Presented by Sugihar to, SH. MM © SUGIHARTO, SH.MM GICI Business School
  2. 2. International Business - all commercial transactions between two or more countries Involves modes of business that differ from those at the domestic level Foreign conditions diversity company’s external environment © SUGIHARTO, SH.MM GICI Business School
  3. 3. International business consists of transactions that are devised and carried out across national borders to satisfy the objectives of : INDIVIDUALS COMPANIES ORGANIZATIONS © SUGIHARTO, SH.MM GICI Business School
  4. 4. 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 Re-allocates resources, makes preferential choices, and shifts activities to a global level © SUGIHARTO, SH.MM GICI Business School
  5. 5. Will an idea, good, or service fit into the international market Should trade or investment be used to enter a foreign market Should supplies be obtained domestically or abroad What product adjustments are necessary to be responsive to local conditions What are the threats from global competitors © SUGIHARTO, SH.MM GICI Business School
  6. 6. © SUGIHARTO, SH.MM GICI Business School
  7. 7. Expand sales greater purchasing power in the world as a whole Acquire resources of products, services, components also, foreign capital, technologies, information Diversify sources of sales and supplies, takes advantage of business cycle differences among countries Minimize competitive risk to prevent competitor from gaining advantages © SUGIHARTO, SH.MM GICI Business School
  8. 8. EXPANSION OF TECHNOLOGY transportation and communication are quicker and less costly Liberalization of cross-border movements Government barriers reduced because: desire for better access to greater variety of goods and services domestic producers forced to be more competitive lowered trade barriers to their own exports Development of supporting services by business and governments to: © SUGIHARTO, SH.MM GICI Business School
  9. 9. Development of supporting services by business and governments to: Ease the flow of goods and services sold abroad Reduce risks of International Business Increase in global competition, the firms have become more global to maintain competitiveness © SUGIHARTO, SH.MM GICI Business School
  10. 10. j MERCHANDISE EXPORTS AND IMPORTS Are the most common international economic transaction, especially for smaller companies. And … Major source of international revenue and expenditures for most companies SERVICE EXPORTS AND IMPORTS NONPRODUCT INTERNATIONAL EARNINGS Tourism and transportation Performance of services for a fee Use of assets by others - Licensing Agreements © SUGIHARTO, SH.MM GICI Business School
  11. 11. j INVESTMENTS - ownership of foreign property in exchange for financial return Foreign direct investment Investor gains a controlling interest in foreign company by joint venture or mixed venture another option is Portfolio investment International Companies the terminology Strategic alliance collaborative arrangement of critical importance to the competitive viability of one or more partners Multinational enterprise (MNE) © SUGIHARTO, SH.MM GICI Business School
  12. 12. j LICENSING - official or legal permission to carry on an activity A permit from an authority to own or use something, do a particular thing or carry on a trade through agreement between licensed entity (Licensee) and granting authority FRANCHISING - A marketing system revolving around a two-party agreement, whereby the franchisee conducts business according to the terms specified by the franchisor Single franchise owner Master franchisee © SUGIHARTO, SH.MM GICI Business School
  13. 13. OPERATIONS AND INFLUENCES External Influences The Operations PHYSICAL AND SOCIETAL FACTORS OBJECTIVES Political policies and legal practices Cultural factors Economic forces Geographical influences Sales expansion Resource acquisition Diversification Competitive risk minimization STRATEGY © SUGIHARTO, SH.MM GICI Business School
  14. 14. OPERATIONS AND INFLUENCES MEANS External Influences COMPETITIVE ENVIRONMENT Major advantage in price, marketing, innovation, or other factors Number and comparative, capabilities of competitors Competitive differences by country MODES Importing and exporting Tourism and transportation Licensing and franchising Turnkey operations Management contracts FUNCTION Marketing Finance Production Accounting Overlying alternatives Choice of countries Organization and control mechanisms Human resources Direct and portfolio investment © SUGIHARTO, SH.MM GICI Business School
  15. 15. MEASURING GLOBALIZATION Note: # learn anything about Globalization, the terms, the definition, and its History. Those will be part on Final examination Foreign Aid POLITICAL ENGAGEMENT Treaties Organizations Peacekeeping ECONOMIC INTEGRATION PERSONAL CONTACT International Trade Foreign Direct investment Travel and Tourism Telephone Transfer Payment Internet users TECHNOLOGICAL CONNECTIVITY Hosts Secure servers © SUGIHARTO, SH.MM GICI Business School
  16. 16. GLOBALIZATION Good OR Bad ? Threats to national sovereignty Economic growth and environmental stress Growing income inequality and personal stress Offshoring – transferring of production abroad is controversial in terms of who benefits when costs are reduced and whether the process exchanges good jobs for bad ones © SUGIHARTO, SH.MM GICI Business School
  17. 17. OPERATIONS AND INFLUENCES The EXTERNAL INFLUENCES Physical and societal factors P O L I T I C A L that affect whether and how International Business occurs DOMESTIC AND determines what managers can I N T E R N A T I O N A L L A W do in International Business ECONOMICS determines The types of investment G E O G R A P H Y determine location and availability of world’s resources © SUGIHARTO, SH.MM GICI Business School
  18. 18. OPERATIONS AND INFLUENCES The EXTERNAL INFLUENCES Physical and societal factors To operate within a company’s external environment, its managers must have : knowledge of business operations a working knowledge of social sciences …. and how they affect all functional business fields © SUGIHARTO, SH.MM GICI Business School
  19. 19. The EXTERNAL INFLUENCES OPERATIONS AND INFLUENCES Competitive environment Varies by industry, company, and country Strategies differ across companies e.g., importance of controlling labor cost e.g., influence of local and international competitors Size of market differs across countries © SUGIHARTO, SH.MM GICI Business School
  20. 20. Risk Minimization Evolution of Strategy in International Process PATTERNS OF EXPANSION Passive to active pursuit of International Business opportunities – initially wait for foreign opportunities Limited to extensive modes of operations – begin with importing or exporting operation foreign operations viewed as risky international commitments evolve gradually External to internal handling of International Business – rely on intermediaries at first Few to many foreign locations Similar to dissimilar business environments © SUGIHARTO, SH.MM GICI Business School
  21. 21. THANK YOU FOR LISTENING 1st Meeting International Business STIE GICI Business School January 2014 Background image provide by slide Factory Closing theme by A ha ‘Stays on These Roads’ Presentation created by Ace 013 Slides factory © MCX 2014 © SUGIHARTO, SH.MM GICI Business School