International Business refers to the trade of goods, services, technology, capital and/or knowledge at a global level. It involves cross-border transactions of goods and services between two or more countries.

1. Globalization
&
International Business

3. Characteristics of Globalization
 Connectivity
 Borderless Globe
 Free trade
 Cultural Diversity
 Mobility
 Information Technology changes

4. Types of Globalization
 Economic
 Social
 Cultural
 Political
 Environmental
 Ecological
 Technological

5. Causes of Globalization
 Improved Communications
 Improved Transport
 Free Trade Agreements
 Global Banking
 The Growth of MNCs

6. Pros & Cons of Globalization
Pros
 Increases wealth and
 efficiency in developed
and developing nations
 Creates jobs in developed
and developing nations
 Advances developing
 nations’ economies
 Decreases poverty in
 developing nations
Cons
Globalization: Pros & Cons

7. International Business
International Business refers to the trade of goods, services,
technology, capital and/or knowledge at a global level. It
involves cross-border transactions of goods and services
between two or more countries.

8.  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 of IB

9. • International Marketing
• International Finance and
Investments
• Foreign Exchange
• Global HR
Scope of IB

10. 1. Earn foreign exchange
2. Optimum utilization of
resources
3. Achieve its objectives
4. To spread business risks
5.Improve organization's
efficiency
Importance of IB
6. Get benefits from
Government
7. Expand and diversify
8. Increase competitive
capacity

11. Ethnocentric
Polycentric
Regiocentric
Geocentric
Approaches of IB

12. Entry Strategy of IB
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

13. Entry Strategy of IB
4. Foreign Assembly
• Subsidiary
• local assembly
5. Turnkey Operation
• Staff of an operating facility
• foreign buyer
6. Foreign production subsidiary
• Establishment
• Purpose

14. Entry Strategy of IB
7. International Firm
• Significant portion
• In foreign countries
8. Multinational Corporation
• Parent country
• host country
9. Joint Venture
• Property rights

15. Entry Strategy of IB
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

16. Types of International Organizations
 Multinational enterprises (MNEs)
 take a global approach to markets and production
or have operations in more than one country
 Sometimes they are referred to as
 multinational corporations (MNCs)
 multinational companies (MNCs)
 transnational companies (TNCs)

17. Types of International Organizations
 In foreign markets, companies often have to adapt
their typical methods of doing business
 foreign conditions may dictate a particular method
 operating modes may be different from those used
domestically

18. Decision to Go Global

19. 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)

20. 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)

21. Pros & Cons Of IB
 Advantages
‾ Faster growth
‾ Access to cheaper inputs
‾ Increased quality and
efficiency
‾ New market opportunities
‾ Diversification
 Disadvantages
‾ Increased costs
‾ Foreign regulations and
standards
‾ Delays in payments
‾ Complex organizational
structure

22. Impact of globalization on IB
 Rise in Competition
 Rise in Technology and
Know How
 Rise in Opportunities
 Rise in Investment
Levels
 Meeting consumer
expectations and tastes
 Globalization of
markets
 Economic Development
 Economies of scale
 Choice of location
 Information transfer
 Increased mergers and
joint ventures
 Multi-national and
multi-cultural
management
 Procurement and
Outsourcing

23. Thank You.