INTERNATIONAL BUISNESS

BY: DEEPSI KHANDELWAL

What is international buisness

International business is business whose activities are carried out across national borders. This definition includes :

not only international trade and foreign manufacturing but also the growing service industry in areas such as transportation, tourism, advertising, construction, retailing, wholesaling, and mass communications.

Types of international buisness

1) International buisness2) Foreign buisness3) Multi domestic buisness4) Global company5) International company

INTERNATIONAL BUISNESS

Is a business whose activities are carried out across national borders. These include not only international trade and foreign manufacturing but also the growing servise industry in areas such as tranportation, tourism, advertising, construction retailing, wholesaling, and mass communications..

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FOREIGN BUSINESS

Denotes to the oprations of company outside its home or domestic market; may refer to this as business conduct within a foreign country.This term sometime is used interchangeably with international business.

MULTIDOMESTIC BUISNSS

Is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

Global company

Is an organization that attempts to standardize and integrate operations worldwide in most or all functional areas.

INTERNATIONAL COMPANY

It is simply a global or multidomestic company.

Nature of international buisness

1) Accurate Information2) Information not only accurate but should be timely3) The size of the international business should be large4) Market segmentation based on geographic segmentation5) International markets have more potential than domestic markets

Scope and need of international buisness

1. International Marketing2. International Finance and Investments3. Global HR4. Foreign Exchange

5. To achieve higher rate of profits

 

 Availability of technology and managerial competence. Cost of manpower, transportation. Nearness to raw material. Liberalisation, Privatisation and Globalisation (LPG). To increase market share. Increase in cross border business is due to falling trade barriers (WTO), decreasing costs in telecommunications and transportation; and freer capital markets

10. Nearness to raw material11. Liberalization, Privatization and Globalization (LPG)12. To increase market share13. Increase in cross border business is due to falling trade barriers (WTO), decreasing costs in telecommunications and transportation; and freer capital markets

Reasons for Recent International Business Growth

1. Expansion of technology2. Business is becoming more global because•Transportation is quicker•Communications enable control from afar•Transportation and communications costs are more conducive for international operations3. Liberalization of cross-border movements4. Lower Governmental barriers to the movement of goods, services, and resources enable Companies to take better advantage of international opportunities

3. Liberalization of cross-border movements4. Lower Governmental barriers to the movement of goods, services, and resources enable Companies to take better advantage of international opportunities

Contract element and treaties

The law of contract affects every single transaction between buyers and sellers. It is a legally binding relationship between two or more people that is enforceable by law. There are eight simplified essential element of valid contract.Simplified Essential Elements of a Valid Contract

Offer: An offer is a proposal to give or do something and, when accepted, there is said to be an agreement. It must be clear and may be implied by conduct e.g. taking goods to the checkout

Acceptance: This is a positive unqualified assent to all terms of the offer e.g. a house buyer makes an offer of price for a house and seller is happy to accept.

Consideration: : This refers to whatever is exchanged between the parties -It must be real -It need not be adequate-It must be legal

Intention to contract : The Person must want to create legal relations. Therefore the parties signing a contract must know that they are entering a legal agreement that cannot be broken

Capacity to contract: This is the power of a natural person to enter into a contract.

The following parties do not have the capacity to enter a contract.

– Minors- people under 18 except for necessities e.g. food

– Persons under the influence of alcohol or illegal drugs

– Persons of unsound mind.

Consent to contract: A person must enter into a contract of their own free will. There should be no use of force or lies. e.g. a groom only married his pregnant wife after he was threatened by her father. One month later the marriage contract was cancelled.

Legality of form: This refers to the manner in which the contract is made. It can be oral (simple contract) or written. E.g. when buying a house a contract must be written.

Legality of purpose: This means that legally binding contracts can only be for legal transactions. e.g a judge will not award compensation to a bank robber whose getaway driver did not show up as agreed!!

Problems in International Business

1. Political factors2. High foreign investments and high cost3. Exchange instability4. Entry requirements5. Tariffs, quota etc.6. Corruption and bureaucracy7. Technological policy

GLOBALIZATION

The most common definition and the one used in international business is that of economic globalization —the tendency toward an international integration of goods, technology information, labor, and capital, or the process of making this integration happen.