1. International
Business

2. MEANING
The exchange of goods and services among businesses
in multiple countries is expressed as International
Business.
International Business is all transactions – private and
governmental – between two or more countries.
Simply when business cross the border of one
country and enters to another, it becomes the International
Business.

3. OBJECTIVES FOR INTERNATIONAL
BUSINESS
To Expand Sales
To Acquire Resources
To Minimize Risk

4. MODES OF INTERNATIONAL BUSINESS

5. Import/Export
 Import – Commodities brought into the country.
 Export – Commodities sent to the other country.
 Example :
Jindal Home Products Pvt. Ltd. is the exporter of LPG
Burners and Kitchen Gas Stoves. Its exporting network
is in West Indies, Ghana, United States etc.

6. Licensing
 To grant the permission to use the trademarks, copyrights,
patents and technology in return for fees/royalty.
 It allows the licensee to use, make or sell the copies of the
original commodities.
 Example :
The Ford Motor Company manages more than 300
licensees worldwide. It has licensing programs for
brands such as Ford Trucks, Ford Blue Oval, Vintage
Vehicles etc.

7. Franchising
 It is a form of business organization in which a firm that has
already a successful product or service enters into a continuing
contractual relationship with other businesses which use its
trade name.
 Example :
Mc. Donald's, Dominos Pizza

8. Foreign Direct Investments
 Foreign direct investments is one that gives the investor a
controlling interest in a foreign company.
 It can be done through Joint Ventures, Mergers, or
Acquisition.
 Example :
ICICI Prudential, MetLife India Life Insurance

9. Management Contracts
 Agreements in which one company provides personnel
to perform general or specialized management functions
for another company.
 Example :
The East India Hotels manage their international
business in Dubai and Morocco by the way of
Mgt. Contracts.

10. EVOLUTION OF STRATEGY IN THE
INTERNATIONALIZATION PROCESS
The companies generally follow the
usual pattern of strategies for being global. It starts
its operations at domestic level and then expands to
international level.

11. Internal v/s External
Impetus for foreign operations
international business handling
HIGH
A B
Company handles its
Active search for
opportunities MEDIUM own foreign operations
LOW Other firms
handle external
Passive contracts
response to
proposals
DOMESTIC
BUSINESS
Quite Limited
similar foreign
functions, Limited Mode of
Moderately
One Export foreign prod. operations
similar
import & multiple
E Very Extensive C
functions
dissimilar prod.
Degree of
Several abroad with
similarity
FDI & all
between
functions
foreign &
domestic Many
countries
No. of foreign
D countries in which
a firm does business