AN OVERVIEW OF INTERNATIONAL BUSINESS

Chapter Objectives

Discuss the meaning of international

business Explain the importance of understanding international business Identify and describe the basic forms of international business activities Discuss the causes of globalization Comprehend the growing role of emerging markets in the global economy

THE OLYMPIC

The Business of the Olympics

Intense reflection of

international business Government of games by IOC Competition for hosting Revenue sources for the Olympics Broadcast rights Corporate sponsorships

What Is International Business?

Business transactions between parties from

more than one country

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Who Are The Parties Involved?

Private individuals Individual companies Groups of companies Governmental agencies

How Does International Business Differ from Domestic?

Currency conversion Legal systems Culture Availability of resources

Activity:
What are the currencies of Brunei, Thailand,

England and France? Can you identify some cultural differences between Malaysians and Arabs? Can you think of various aspects to consider when doing business in Muslim countries?

Why Study International Business?

Large organizations Job assignment Small businesses Competitors Business techniques and tools Cultural literacy

International Business Activities

Exporting and Importing

(E&I) International Investments (2Is) Licensing, Franchising, and Management Contracts (LFMC)

Exporting and Importing

Exporting: selling of products made in ones

own country for use or resale in other countries Importing: buying of products made in other countries for use or resale in ones own country WHO IS THE BIGGEST TRADE PARTNER FOR MALAYSIA? WHAT DO WE NORMALLY IMPORT AND EXPORT?

Visible and Invisible Trade

Trade in Goods Merchandise exports and imports Visible trade Trade in Services
Service exports and imports Invisible trade

International Investments
Capital supplied by residents of one country

to residents of another Two categories:

Foreign direct investments Portfolio investments

Other Forms of International Business Activity

Management contracts Licensing Franchising

International Licensing
Contractual arrangement Allow its intellectual property to be used by providing license to secondary party Secondary party will provide royalty in return.

Management Contract
One countries agreed to operate facilities or

provide other management services to a firm in another country for an agreed-upon fee.

International Franchising
A specialized form of international licensing. However, primary party allow secondary party

to operate exactly as the parent company run their business.

Contemporary Causes of Globalization

Strategic Imperatives To leverage core competencies To acquire resources and supplies To seek new markets To better compete with rivals

Environmental Change and Globalization

Changes in Political Environments

Technological Changes

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Globalization and Emerging Markets

Brazil / Argentina Russia India China

BRIC

Globalization and Emerging Markets (continued)

Big Ten Argentina Brazil South Korea Indonesia Poland Turkey South Africa China Mexico India

10

Online Assignment
Why does Aussie floods may affect TNBs fuel costs? ESSAY FORM IN ONE PAGE ONLY. STANDARD REPORT WRITING. Due date: 12/01/2011, Wednesday, 12.00pm