2. • The exchange of Goods & Services, Resources, Knowledge, & Skills,
among individuals & businesses in two or more countries.
• Transaction that are carried out across national borders to satisfy the
objectives of individuals and organization
• All Commercial transactions that take place between two or more
countries.
1. Private & Government
2. Sales
3. Investments
4. Logistics
5. Transportation
What is International Business ?
3. • Large scale operations
• Integration of economies
• Dominated by developed countries and MNCs
• Benefits to participating countries
• Keen competition
• Special role of science and technology
• International restrictions
Features
4. Strategic Process
1. Strategic Formulation
2. Strategic Implementation
3. Strategic Evaluation and Control
Strategic Choices
6. Ethnocentric approach
• Under this approach, target market is own country , Excessive
production will export due to change in customer taste, preferences
IB Approaches
7. Polycentric approach
• Under this approach, the companies customizes the marketing mix to
meet the taste, performance and needs of the customers of each
international market.
IB Approaches
8. Regiocentric approach
• Under this approach, the company operating successfully in a
foreign country thinks of exporting other neighboring countries of the
host country.
• At this stage, the concerned subsidiary considers the regional
environment ( such as laws, culture, policies etc.) for formulating the
policies & strategies.
IB Approaches
9. Geocentric approach
• Under this approach, the company analyses the tastes,
preference and needs of the customers in all foreign markets
and then adopts a standardized marketing mix for all the
foreign markets.
IB Approaches
10. • Political factors
• High foreign investments and high cost
• Exchange instability
• Entry requirements
• Tariffs, quota etc.
• Corruption and bureaucracy
• Technological policy
• Quality Management
Problems
11. Entry Strategy
1. Exporting
• Indirect & Direct
2. Licensing
• Agreement
• Patent, trademark, copy right, technology, production
processes, and product
• licensee’s fee
3. Franchising
• by franchisers to franchisee
• Usage
12. Entry Strategy
4. Foreign Assembly
• Subsidiary
• local assembly
5. Turnkey Operation
• Staff of an operating facility
• foreign buyer
6. Foreign production subsidiary
• Establishment
• Purpose
13. Entry Strategy
7. International Firm
• Significant portion
• In foreign countries
8. Multinational Corporation
• Parent country
• host country
9. Joint Venture
• Property rights
14. Entry Strategy
10. Foreign Direct Investment
• Arrangement in which a firm buys or establishes tangible
assets
• In another country
• Through direct investment
• By buying a company stock in capital markets
15. • Faster growth
• Access to cheaper inputs
• Increased quality and efficiency
• New market opportunities
• Diversification
Advantages
16. • Increased costs
• Foreign regulations and standards
• Delays in payments
• Complex organizational structure
Disadvantages
17. 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
• Lower Governmental barriers to the movement of goods, services,
and resources enable Companies to take better advantage of
international opportunities
Reason for recent growth in IB
18. Reason for recent growth in IB
General agreement on Tariff and trade
(GATT)
• An international organization formed to reduce or
eliminate tariff and other barrier to international
trade
• An international financial organization that lend
money to countries in conducting international
trade
International Monetary Fund (IMF)
19. Reason for recent growth in IB
World Bank
• An international financial organization that lend
money to underdeveloped and developing
countries for development
Economic Communities
• World Trade Organization (WTO)
• European Community (EC)
• North American Free Trade Agreement (NAFTA)
• Asian Free Trade Agreement (AFTA)
