17-01-2020

Introduction

Module 1

International Business

In this Session
 Why International Business
 Changing Economy and World
 Meaning of Globalisation & International
Business
 Why Companies go international
 Drivers of Globalisation
 Criticisms of Globalisation

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GDP PPP Share of Advanced

International Business

Economies Vs. Emerging + Developing

Economies
Emerging &
Developing Economies

Advanced
Economies

Source:
https://www.imf.org/external/datamapper/PPPSH@WEO/OEMDC/ADVEC/WEOWORLD
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International Business

Source:
https://www.pwc.com/gx/en/world-2050/assets/pwc-the-world-in-2050-full-report-feb-2017.pdf
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International Business

Source:
Dept. of Commerce, Govt of India – Annual Report 2018-19

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International Business

Source:
Dept. of Commerce, Govt of India – Annual Report 2018-19

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International Business

Source:
Dept. of Commerce, Govt of India – Annual Report 2018-19 16 R Sugant

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International Business

Globalisation
 Integration of world economies through the
reduction in barriers to the movement of
trade, capital, technology and people.
 The shift toward a more integrated and
interdependent world economy

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International Business

International Business
 All commercial transactions—including sales,
investments, and transportation—that take
place between two or more countries.
Primarily, they consist of
 Export & Import of products and services
 Foreign Direct Investment
o Manufacturing
o Services

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International Business

Criticisms of Globalisation
 Threats to national sovereignty
 Environmental stress
 Income inequality
 Job losses
 Tax evasion
 Power of MNCs over governments

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International Business

Why Companies go global?

 Sales expansion  Resource acquisition
 Opportunity for market  Gain new ideas about
diversification product, services and
 Serve customers that business methods
have relocated  Closer to supplier sources
 Earn higher margins  Risk reduction
 Confronting competition  Access to low cost
production
 Economies of scale
 Joint venture/ foreign
partner
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International Business
Factors responsible for increased
Globalisation
1. Declining trade and investment barriers
2. Increase in and expansion of technology
3. Development of services that support international
business
4. Growing consumer pressures
5. Increased global competition
6. Changing political situations
7. Expanded cross-national cooperation

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International Business
What factors should companies
consider?
 Political-legal factors
 Economic factors
 Cultural factors
 Entry strategy
 Market factors – Competition, customers
 Organisation structure & HR
 Logistics & SCM
 Financing
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International Business

To recap
 Why international business
 Meaning of globalisation & international
business
 Criticisms of globalization
 Why companies go international
 Drivers of globalization
 Factors companies should consider while
going global

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