Chapter 1-1

What Is International Business?

 International business consists of business

transactions between parties from more
than one country
Boundaries

Currencies
International
Business Cultures
vs.
Domestic Legal Systems
Business
Availability of Resources

Skills & Knowledge

Chapter 1-2
Why Study International Business?

 Provides the knowledge and skills that are

essential for your career in today's
business environment
 Helps you make better career assessments
 Compete successfully with peers and
future competitors
 Stay abreast of the latest business
techniques and tools
 Obtain cultural literacy

Chapter 1-3
International Business Activities

Exporting & Importing

International Investments

International Licensing

International Franchising

International Management Contract

Chapter 1- 4
International Business Activities:
Exporting and Importing

 Exporting: selling  Trade in goods:

of products made in tangible products
one’s own country  Trade in services:
for use or resale in intangible products
other countries.
 Importing: buying
of products made in
other countries for
use or resale in
one’s own country.

Chapter 1-5
International Business Activities

Chapter 1-6
International Business Activities:
International Investments

Foreign Direct Foreign Portfolio

Investments Investments
(FDI) (FPI)

Chapter 1-7
International Business Activities:
Other Forms

 International licensing
Intellectual Property
 International franchising
The Franchisor
The Franchisee
 International management contract
Management Services

Chapter 1-8
International Business Activities:
An International Business

 Multinational Corporation (MNC)

 Multinational Enterprise (MNE)
 Multinational Organization (MNO)

Chapter 1-9
Contemporary Causes of Globalization

 What is Globalization?
 Manifestation of globalization
Intensification of the role of international
trade
Growing importance of FDI
 Causes of Globalization
Strategic Imperatives
The Environmental Causes of Globalization
 Globalization and Emerging Markets

Chapter 1-10
Contemporary Causes of Globalization:
Strategic Imperatives

 Leveraging a firm’s core competencies

 Acquiring resources at low cost
 Expanding into new markets
 Competing with industry rivals

Chapter 1-11
Contemporary Causes of Globalization:
Environmental Causes

 Changes in the Political Environment

Reduction of trade and investment barriers
The collapse of European Communism
The ideological and policy changes
undertaken by China and India
 Changes in the Technological Environment
Advances in Transportation
Improvements in Information Processing
Changes in Communications Technology

Chapter 1-12
Contemporary Causes of Globalization:
Globalization and Emerging Markets

Emerging
Markets ?

Non-High
BRIC
Big Ten Income
Countries
Countries

Chapter 1-13
Contemporary Causes of Globalization

Chapter 1- 14
Contemporary Causes of Globalization

Chapter 1- 15
New challenges

INDIA
INDONESIA

Chapter 1- 16