Overview of International Business

1. 1-1
chapter 1
An Overview
of
International
Business
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
International
Business,
6th
Edition
Griffin & Pustay

2. 1-2
What Is International
Business?
• Business transactions between
parties from more than one country
• Parties may include:
– Private individuals
– Individual companies
– Groups of companies
– Governmental agencies
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

3. 1-3
How Does International Business
Differ from Domestic?
• Currency conversion
• Legal systems
• Culture
• Availability of resources
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

4. 1-4
International
Business Activities
• Exporting and Importing
• International Investments
• Licensing, Franchising, and
Management Contracts
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

5. 1-5
Figure 1.1 Exports as a % of GDP
82.9
39.7
31.8
28.8
21.4
17.8
10.8
14.5
27.1
35.7
75
44.1
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Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

6. 1-6
Figure 1.2 World Exports
as a % of World GDP
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

7. 1-7
Figure 1.3 Foreign Direct
Investment Relative to World GDP
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

8. 1-8
The Era of Globalization
Globalization: the inexorable integration
of markets, nation-states, and
technologies…in a way that is enabling
individuals, corporations and nation-
states to reach around the world farther,
faster, deeper, and cheaper than ever
before
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

9. 1-9
Contemporary Causes of
Globalization
Strategic Imperatives
• To leverage core competencies
• To acquire resources and supplies
• To seek new markets
• To better compete with rivals
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

10. 1-10
Environmental Change and
Globalization
Changes in
Political
Environments
Technological
Changes
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

11. 1-11
Why Study International
Business?
• Large organizations
• Foreign-owned subsidiaries
• Small businesses
• Competitors
• Business techniques and tools
• Cultural literacy
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall