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 buisness
 2) Foreign buisness
 3) Multi domestic buisness
 4) Global company
 5) 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..

,
 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 Information
2) Information not only accurate but should be
timely
3) The size of the international business should be
large
4) Market segmentation based on geographic
segmentation
5) International markets have more potential than
domestic markets
 Scope and need of
international buisness
 1. International Marketing
2. International Finance and Investments
3. Global HR
4. 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 material
11. Liberalization, Privatization and
Globalization (LPG)
12. To increase market share
13. 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 technology
2. Business is becoming more global because
•Transportation is quicker
•Communications enable control from afar
•Transportation and communications costs are more
conducive for international operations
3. Liberalization of cross-border movements
4. 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 movements
4. 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 factors
2. High foreign investments and high cost
3. Exchange instability
4. Entry requirements
5. Tariffs, quota etc.
6. Corruption and bureaucracy
7. 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.