GFOB 9/7/2012

TWO Practical Insights Ex. Mickey Ds trying to adjust to the local culture of India, Argentina, France, etc. Find an article to writ e a 3 page paper. 1st page: summarize article 2nd page: explain topics mentioned 3rd page: what do I think? Does this tactic work? Is it right or wrong? How has reading this article help you further understand the topics discussed in class.

Global Business Plan (GROUP) Project Select a country and an industry within that country. Form groups, select country, select industry. TIP: dont go for developed countries. We want to present growth of countries less known of. Think latin America, Africa, Eastern Europe, Asia.

G-Pitch (GROUP) 5 minute business idea How quickly can you think and present your own business idea? A business idea that addresses a social problem. Ex. Social Problems: water shortage, food shortage, education facilities, diseases, medical care, health care.

YOU ARE A MANAGER. Lol. Learn something, doe. Course Participation is considered by your punctuality, preparedness, active learning, etc.

Globalization
No business is purely domestic. What goes on internationally in business affects businesses domestically. Thus, ALL businesses should at least THINK internationally.

International Business
1.

(def.)

International Trade: Import/Export

ex. Nike: an American company whose products are made in China and imported to America. ex. Honda: accords and civics made in America and made by parts source in the states. Japanese company because HQ are located there. Money Out, Import IN EXPORT OUT, MONEY IN ex.Boeing

2. International Investment:
a.

Foreign Direct Investment:

ex. FIAT invests resources in the business day-to-day activites outside its home country, revenues come directly back to Italy bc ownership of the hugo HQ in Serbia actually belongs to Italy. ex. Wholly owned, joint-venture, strategic alliance

b.

Foreign Portfolio Investment

ex. Let fidelity manage savings (investing in Russian oil industry) going through fidelity and no control over day to day operations means not a direct investment! ex. Stocks/bond, this is called your portfolio of investments -if you invest enough to become a board member and important shareholder and attain the right to vote, you still dont run the company or have the say in day-to-day control of business activities.

9/10/12

International Business was known TRADE: IMPORT/EXPORT First international company was the EAST INDIA TRADING COMPANY barter system that traded something of value with gold or silver. The richest country is the country with the most gold. Countries with fewer gold reserves thus traded other things of value. When business IN the United States are in demand the value of the US dollar goes up.

When do you say a company is an international company?

-When you have operations in another country. Ex. Coca cola sold in 240 countries ex. Company in 2 different countries.

The question is exactly HOW international you are.

1. -Import to another country. Ex. Pier 1 imports

2. -outsources to different countries Ex. Nike makes its shoes in china but sold in the America Ex. Boeing has its HQ in Chicago and manufactureing companies in WA but the planes itself come from 42 different countries. Boeing is international because it SOURCES its products internationally

What is the need to become international? To make more money. India, china. America is a fixed piece of the pie. By going INTERNATIONAL, businesses increase the opportunity to ALSO, countries are interdependent due to natural resources.

Ex. Saudi Arabia = richest oil reserves, South Africa = diamonds

ALSO, some countries are specialized in certain products.

Ex. Olive oil = Italy, feta cheese = Greece,

ALSO, some businesses need to outsource to stay competitive ex. Nike gets competition: reebok, new balance, adidas. Its profit margins decreased with all this new competition. SO, it needed to increase sales by expanding to avoid reducing cost substantially. By going international, it maintained the integrity of its products, the quality. By going outsourcing in China, which were made there at a fraction of the cost, mike increased its profit margin. Nike stayed competitive due to OUTSOURCING.

Profit margins of companies are higher outside of the united states than domestically. ex. Mercedes is a luxury brand in the united states ex. KFC in Japan is a delicacy, armed KFC in India ex. Biggest McDonalds in Russia ex. Delivery services (separate from the companies itself)

GLOBALIZATION of MARKETS
Specialized form of international business. Ex. Coca cola: sold in 204 countries. But not everybody in those countries drink coke. HOWEVER, if you ask whoever drinks coke and asks why they drink coke and collect the responses, the answer is quite similar. Its REFRESHING:) so all they have to do is standardize coca cola to sell it across the board. By standardizing, coca cola makes a lot more money by being the most efficient.

Economies of Scale.

Fixed costs:rent variable cost: labor, supplies,

MADE IN CHINA FACTS: wal mart has control of 5% of Chinas GDP To stay competitive, wal mart outsources in china

The most global markets are not consumer markets The most global markets are for industrial goods and materials that serve a universal need the world over