copyright pearson education inc. publishing as prentice hall chapter 1 an overview of international...
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Copyright Pearson Education Inc. publishing as Prentice Hall
chapter 1
An Overview ofInternationa
l Business
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Chapter ObjectivesDiscuss the meaning of international businessExplain the importance of understanding international businessIdentify and describe the basic forms of international business activitiesDiscuss the causes of globalizationComprehend 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 businessGovernment of games by IOCCompetition for hostingRevenue sources for the Olympics Broadcast rights Corporate sponsorships
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What Is International Business?
Business transactions between parties from more than one countryParties may include: Private individuals Individual companies Groups of companies Governmental agencies
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Copyright Pearson Education Inc. publishing as Prentice Hall
How Does International BusinessDiffer from Domestic?
Currency conversionLegal systemsCultureAvailability of resources
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Copyright Pearson Education Inc. publishing as Prentice Hall
Why Study International Business?
Large organizations Foreign-owned subsidiariesSmall businessesCompetitorsBusiness techniques and toolsCultural literacy
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Copyright Pearson Education Inc. publishing as Prentice Hall
International Business Activities
Exporting and ImportingInternational InvestmentsLicensing, 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 countriesImporting: 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 Merchandise exports and imports Visible trade
Trade in Services Service exports and imports Invisible trade
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Copyright Pearson Education Inc. publishing as Prentice Hall
International Investments
Capital supplied by residents of one country to residents of anotherTwo categories: Foreign direct investments Portfolio investments
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Copyright Pearson Education Inc. publishing as Prentice Hall
Figure 1.1 Exports as a % of GDP
82.9
39.7
31.828.8
21.417.8
10.8
14.5
27.1
35.7
75
44.1
0
10
20
30
40
50
60
70
80
90
Nether
lands
Thaila
nd
German
y
China
Canad
a
Mex
ico
United
Kin
gdom
France
Indi
a
Japa
nBraz
il
United
State
s
Per
cen
tage
of
GD
P
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Copyright Pearson Education Inc. publishing as Prentice Hall
Other Forms of International Business Activity
Managementcontracts
FranchisingLicensing
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Variations of Organizations
Multinational Corporation
Multinational Enterprise
Multinational Organization
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Multinational Corporations (MNCs)
Engage in foreign direct investmentOwn and control foreign assetsBuy resources in multiple countriesCreate goods and services in multiple countriesSell goods and services in multiple countries
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Table 1.1 The World’s Largest MNCs
Wal-MartExxon MobilRoyal Dutch ShellBPToyota Motor
ChevronING GroupTotalGeneral MotorsConocoPhillips
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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 ImperativesTo leverage core competenciesTo acquire resources and suppliesTo seek new marketsTo better compete with rivals
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Environmental Change and Globalization
Changes in Political
Environments
TechnologicalChanges
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Globalization and Emerging Markets
BRICBrazil / ArgentinaRussiaIndiaChina
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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 MarketplacesInternational EnvironmentManaging International BusinessManaging International Business Operations
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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