Transcript Chapter 1 PPP - College of the Canyons in Santa Clarita

chapter 1
An Overview
of
International
Business
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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
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The Business of the Olympics
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The Business of the Olympics
(continued)
Intense reflection of international business
Government of games by IOC
Competition for hosting
Revenue sources for the Olympics
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Broadcast rights
Corporate sponsorships
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What Is International
Business?
Business transactions between parties
from more than one country
Parties may include:
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Private individuals
Individual companies
Groups of companies
Governmental agencies
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How Does International Business
Differ from Domestic?
Currency conversion
Legal systems
Culture
Availability of resources
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Why Study International
Business?
Large organizations
Foreign-owned subsidiaries
Small businesses
Competitors
Business techniques and tools
Cultural literacy
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International
Business Activities
Exporting and Importing
International Investments
Licensing, Franchising, and
Management Contracts
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Exporting and Importing
Exporting: selling of products made in
one’s own country for use or resale in
other countries
Importing: buying of products made in
other countries for use or resale in
one’s own country
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Visible and Invisible Trade
Trade in Goods
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Merchandise exports and imports
Visible trade
Trade in Services
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Service exports and imports
Invisible trade
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International Investments
Capital supplied by residents of one
country to residents of another
Two categories:
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Foreign direct investments
Portfolio investments
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Figure 1.1 Exports as a % of GDP
90
80
82.9
75
Percentage of GDP
70
60
50
44.1
39.7
40
35.7
31.8
28.8
30
27.1
21.4
20
17.8
14.5
10.8
10
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Other Forms of
International Business Activity
Management
contracts
Franchising
Licensing
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Variations of Organizations
Multinational Corporation
Multinational Enterprise
Multinational Organization
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Multinational Corporations
(MNCs)
Engage in foreign direct investment
Own and control foreign assets
Buy resources in multiple countries
Create goods and services in multiple
countries
Sell goods and services in multiple
countries
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Table 1.1 The World’s Largest
MNCs
Wal-Mart
Exxon Mobil
Royal Dutch Shell
BP
Toyota Motor
Chevron
ING Group
Total
General Motors
ConocoPhillips
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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
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Figure 1.2 World Exports
as a % of World GDP
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Figure 1.3 Foreign Direct
Investment Relative to World
GDP
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Contemporary Causes of
Globalization
Strategic Imperatives
To leverage core competencies
To acquire resources and supplies
To seek new markets
To better compete with rivals
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Environmental Change and
Globalization
Changes in
Political
Environments
Technological
Changes
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Globalization and
Emerging Markets
BRIC
Brazil / Argentina
Russia
India
China
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Globalization and
Emerging Markets (continued)
Big Ten
Argentina
Brazil
China
South Korea Indonesia Mexico
Poland
Turkey
India
South Africa
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Framework of Book
The World’s Marketplaces
International Environment
Managing International Business
Managing International Business
Operations
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Pearson Education,
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Prentice Hall
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without the prior written permission of the publisher. Printed in the
United States of America.
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