Submitted by Chakar Ali

Submitted to Malik Dad

Semester 8th

Program BBA

Course Title International Business

Department Management Sciences

UNIVERSITY OF TURBAT
Question no 1 : What factors have contributed to the growth of globalization in recent decades?

I.INCREASE IN AND EXPANSION OF Technology

• One of the explanation is the populace development and the other is financial development.

• Today, absolute populace are more associated with creating item instead of delivering them.

• The headway in correspondence and transportation is additionally a main consideration in expansion

in and development in innovation.

2.LlBERALlZATlON OF CROSS BORDER trade and RESOURCE MOVEMENTS

• To secure its own businesses there is limitation across borders for products and enterprises.

• There is a limitation that set cutoff points on 1B exercises since guidelines can change whenever and
furthermore add to an atmosphere of vulnerability.

3.DEVELOPMENT OF SERVICE THAT Support INTERNATIONAL BUSINESS.

Nations have now built up an assortment of administrations that encourage direct of worldwide
business.

Some are: Bank credit arrangements.

Protection that covers dangers, for example, harms. Sending letters and bundles utilizing worldwide help
organizations like UPS or DHL.

4.GROWlNG CONSUMER PRESSURES

• Consumer now a days are more mindful about the items and administrations that are accessible inside
and outside their homegrown region .

• Today buyers need new and better items that are finely separated.

• The accessibility of higher pay markets has likewise prodded organizations to spend all the more
intensely on innovative work to look.

5.1NCREASED GLOBAL COMPETITION

• The pressing factors both present and capability of expanded unfamiliar rivalry can convince
organizations to purchase or sell abroad.

• Firms need to turn out to be more worldwide to contend in the present business climate and
disappointment of this can be exceptionally destructive. For Instance-Procter and Gamble took more
than 100 years to go worldwide.

6.CHANGlNG POLITICAL SITUATIONS

• Now a days Government is supporting projects ideal for worldwide exchange.

• They are currently giving a variety of administrations to help homegrown organizations sell abroad and
the other way around.

7.EXPANDED CROSS NATIONAL Collaboration.

Progressively governments have come to understand that their own advantages can be tended to
through global collaboration by methods for arrangements, arrangements, and conference. The
appropriation of any such approaches are generally used to address certain issues, for example,

To acquire corresponding bit of leeway.

To tackle issues together that one nation alone can't address.

To manage regular zones of worry that lie

outside the domain of any country.

Question no 2 : What are criticisms of globalization ?

Some contend that since globalization associates all nations, when one endures financially, it also
generally influences any remaining nations and makes a descending winding. Others trust it can prompt
homegrown occupation misfortune and abuse of laborers in underdeveloped nations. Ecological issues
have additionally been viewed thus from a lot of globalization.

There is no uncertainty that the USA (and less significantly the UK) trade a huge

measure of film and TV programming; anyway numerous pundits of social

colonialism question whether this truly has a homogenizing impact in

different nations. India, Nigeria and Japan to give some examples all have flourishing film ventures of
their own.
Different pundits additionally bring up that crowds are not simply latent onlookers and they are fit for
making their own decisions and appending their own significance to

media messages (You ought to be comfortable with this as 'Gathering Theory). Crowd reactions to
globalized media are exceptionally separated relying upon whichnation they are seen in.

World Bank is turning into a bad and awkward foundation and there was limp standers of loaning. World
Bank is supporting venture without considering the

climate or the social impact of such undertakings.

World Bank center around enormous task other than projects that may help needy individuals

for example, wellbeing and schooling projects.

It is quite possibly the main wellsprings of the monetary and specialized advices, so it may impact
nations in settling on choice and kill some other viewpoints.

World Bank is expanding the obligation of the non-industrial nations in this way they are definitely not
assisting these nations with taking care of their concern, so they are insult it greater. Agricultural nations
are not, at this point ready to settle on its oun choice in light of the fact that the nations, that are viewed
as the biggest givers to the World Bank, will rule World Bank thusly will rule agricultural nations.

Question no 3..Why companies engage in international business??

1..sales expansion

A company sales will depend on consumers demand..it is clear that there are always potential consumer
in single country..always companies look out the sales because there will be more sales than much profit
.. also doing the business aboard the country per unit cost will reduce because manufacturers make
more products by which cost will decrease it will be more profitable for the company..so expanding
sales of the goods it is a major motive for the companies to increase profits.. but just not large
companies do international businesses also small companies can do, so in USA 97 percent small
companies are exporters which sale large companies and they convert them finished goods send them
aboard..

2..resource acquisition..

Sometimes producer and distributors takeout products, services and others parts from others
country..because sometimes domestic suppliers relation will not be that much strong and they frauds
with companies that's way firms acquire products and services form foreign countries .. also it can be a
reason companies seek out products and services form foreign countries for better quality or less cost..
because these companies want their products quality should be better with competitors and prices
should be less with competitors..

3.. risk reduction...

For doing the international businesses risk can be reduced..because selling in countries with different
timing and not dependent only one business if one business will go to recession may second business
will cover loss of sinked business.. so by obtaining supplies of products locally and internationally may
companies will able to soften impact of price .. and companies often go into internationally for some
reasons, may due to domestic country policies or they want to gain country competitors advantage..

Question no 4 What are the different entry modes of IB? Discuss in detail with Advantages and
Disadvantages along relevant example .

1.Franchising

Franchising is a specified form of licening in which the franchiser not just sell the property but also
propeses the franchise to tolerate the strick rules in way of doing business on ongoing bases.A
franchiser with a licen obviously receives a high payment which amounts to some percentage of the
franchisee's revenues. As Mc Donald's creates supply chain for its franchisees and provides management
training and financial assistance.

Advantages :

A great advantage of franchising is an entry mode which are closely similar to those of licening. It
creates a meaningful step for the franchise to establish a profitable operation by using franchising
strategy also it assumes low cost and risk similarly to Mc Donald's has.

DisAdvantages :

In case of licening there are less disadvantages. Once upon a time franchising is used by services
companies. There no ways are considers for the coordination of manufacturing to achieve experience
curve and location economics. Franchising also may inhabit the firm's ability to take advantages of one
country to support competitive attact on another.

2.Joint Ventures

Joint Venture is the bond between two or more independ firms. The most typical joint venture is a
50/50venture. In which there are two partners each partners to carry 50percent ownership stake and
contribution. They contribute a team of manager to share operating control.

Advantages:

A firm have benefits by having a local partner's knowledge of the host century's competitive conditions,
culture, language and political system.

DisAdvantages

A firm with licening enters into joint venture by risk giving control of its technology to its partner.
Such as A joint venture between Boeing and Mitsubishi and joint ventures never allow a firm for the tight
control over subsidiaries that it might realize experience curve or location economies.

3.Turkey project

Turkey projects are those projects which are used in design construction. In Turkey project there will be agreement for foreign client and
training of the all employees obligation in Turkey project. Simply Turkey project means to transfer the advance technology into other countries
for construction.

Advantages

The Know- how required to assemble and run a technologically complex process, such as refining petroleum or steel, is a valuable asset. Turkey
projects are a way of earning greet economic returns from that asset.

DisAdvantages

There are two main drawback of Turkey project.

(1) the firm enters into a Turkey deal Will have no long term interest in the foreign country it can be disadvantage if that country subsequently
proves to be a major market for the output of the process that has been exported.

(2) if the firm's process technology is a source of competitive advantage then selling this technology through a turkey project is also selling
competitive advantage to potential and or actual competitors.

4 Exporting

Exporting means to send goods aboard the country. Also many manufactures firm export their goods and services for their sale expension.
Simply exporting means to transfer the goods and services across the boarder

Advantages

First exporting does not consider lost of establishing into host country.

Secondly may company get experience throw exporting because to oversees other national market and may a company sale large amount of
food and services.

DisAdvantages

Exporting has many disadvantages.

(1) exporting goods and services to other national market chore hone country people suffer because there will be shortage of food and services.

(2) exporting is high transporting lost because to transfer products into other countries may transportation lost reached at high rate.

5Licensing

Licensing is an agreement where licenser gives right to the licensensee for its tangible property to others firm, for a period and licensor will
take a firm to the licensee. Also the licensor gives his intangible things, which are , formula , design, trendemark and copy right to licensee. It
means that licenser gives his to licensee to use than and run the business. But It will not be for long term.sofor, this agreement will be basis of
agreement and licensee will pay fee to the licensor.

Advantages

The basic advantage is that a licensor does not bear the development lost and risk for entering into the foreign market. Licensing is attractive
where there will be much barrier for foreign market and if it can be attractive such as working on Gawadar port technology is being used by
china and working on a project which is Gawadar port.
DisAdvantages

There are three major backwardness of licening.

(1) it does not allow firm for tight control over manufacturing, marketing and strategy that is needed for realizing experience curve and
location economies.

(2) competing in a global market may require a firm to coordinate strategic moves across countries by using profits earned in one country to
support competitive attack in another.

(3) the third caused with licensing is one that when we view the economic theory of FDI. This is the risk associated with licening technological
know how to foreign companies.

Question No 5. Discuss the Seven main instrument of Trade Policy

1.Tariffs

A tariff is considered as a text levied on import and export.

There are two categorize of tariffs.

(1) Specific Tariff :

These tariffs are based on fix charge for each unit of a good imported materials.

(2) Valorem Tariffs :

A valorem tariff impose the proportion of the value of imported good.

Mostly tariffs are placed on imports to protect domestic producers from foreign competition by raising the prizes of imported materials. Tariffs
are proproduce and anticomsumers. They protect producers from foreign competitors, they ristrict to raise domestic prizes.

Import tariffs remove the overall efficiency of the world economy. They decrease the efficiency because a protective tariff encourage household
firm in order to produce houshold products. This consequence is an efficient usage of resources

For example : Tariffs on the importation of the rice into south korea have led to increase in rice production in that country.

Usually tariffs are imposed on exports of a product from a country. Exports tariffs are for less common than import tariffs. Export tariffs carry
two objective

(1) to raise revenve

(2) to decrees export from sector

2.Wholly Owned Subsidiaries :

In this a firm owns 100percent of the stock. There are two method of establishing a wholly Owned Subsidiaries in the foreign market. The firm
can setup a new operation in that country , often referred to as a green field venture or it can acquired an established firm in that hest nation
and use that firm to promote it's products.

Advantages :

Thare are several benefits of wholly Owned Subsidiaries. initially when a firm's competitive advantage is based on technological competence , a
wholly Owned subsidiary will often be the preferred entry mode on another way. It can be required if a firm is trying to realize location and
experience curve economies
DisAdvantages

When wholly Owned subsidiary serve a foreign market so it needs to bear the full capital cost and risk of sitting up overseas operations. It raises
additional problems including those associated with trying to have divergent corporate cultures.

3.Subsides

A subsidy is a government payment to a domestic producer. Subsides follow many forms such as , cash goants , low interest loan , Tex breaks
and its participation in domestic firms. Subsides compet againts foreign imports and consume export markets. In most countries Agricultures
are the largest beneficiares of subsides. During 2000s the European Union was paying about €44bilions annually ( 55billion) in form subside.

The subsides are much developed due to domestic producer and their international competivness is increased. They rather tend to protect the
ineffi loant and promete excess production. The increase of health arises from mostly efficient use of Agricultural land.

4.Import Quotas And voluntary Export Restraints

A import Quota is a primary ristriction on the quantity of those materials that may be imported in to country, this ristriction is enforced by
import licenses.

Tariff rate quota :

It is kind of lower tariff rate which is applied to imports within the quota than over others.

Tariff rate of 10percent may be imposed on 1million tons of rice that is imported to south Korea and south korea import 2million tons of rice.

A voluntary Export Restraint ( VER)

It is the trading quota which has been imposed by exporting countries of the request of importing countries. The most incient example is the
case of United State and Japan. US was forced by japanese auto mobile producers to have direct pressure from US government.

In VER Japanese imports was. Closely 1.68million vehicles per year. With tariffs and subsides import Quotas and VER benefit domestic
producers.

Local Content Requirement

It is a requirement that some specific fraction of a good be produced domestically. This requirement is expressed in physical terms like
75percent of components parts for this product must be produced locally.

However , Local Content regulation have been mostly used by developed countries to shift their manufacturings, also they have been used to
protect local jobs and industry from foreign competition.

5.Administrative Policies

Administrative Policies are used to restrict imports and boost exports. These policies are used by government and bureaucratic rules design it
difficult for imports to be in a country. Japanese use this method of trading widely than others. In Japan custom inspector insisted for checking
every tulip bulb by cutting it's vertical down the middle. Federal Express also face hard time for its global shipping service into Japan because
Japanese custom inspector claimed to open preportion of express packages to check for pornography and this process was delayed in express.

The resulting delays kept Japanese VCRs out of French market untill a VER agreement was excuted. With others trade and policy administrative
instruments advance the producers and hurt the expectation of consumers.

6.TRADE POLICY
Collection of rules and regulations which pertain to trade. Help a nation's international trade
run more smoothly, by setting clear standards Goals which can be understood by potential
trading partners. In many regions, groups of nations work together to create mutually
beneficial trade policies.

7Anti-dumping policies

Dumpling defined as
Selling goods in a foreign market below production costs Selling goods in a foreign market
below real marketing value
Dumpling is result of
Unloading excess production in foreign markets Predatory behaviour, with producers using
substantial benefits from their home markets to subsidize prices in a foreign market with a
view to driving indigenous competitors out of that market.
+ The predatory firm can raise prices and earn substantial profits .Its objective is to save
domestic producers from unfair foreign competition.

Antidumping policies are policies designed to punish

foreign firms that engage in dumping
Since these practices are naturally considered to be unfair competition by manufacturers in
the country in which the materials are being dumped, the government of the foreign country
will be questioned to impose "anti-dumping" duties which are called contervalling dutie that
represent a special tariff which is fairly substantial and stay in a place for up to 5years.

Write down notes on the following international organisations.

IMF
Inetially , The International Monetary Fund (IMF) is an organization of 186 countries,
working to foster global monetary cooperation, a safe financial stability, facilitate
international trade, promote high employment and sustainable economic growth, and
decrease poverty around the world. The IMF works to foster global growth and economic
stability. It provides policy advice and financing to members in economic difficulties and
also works with developing nations to assist them achieve macroeconomic stability and
reduce poverty.
With its global membership of 186 countries, the IMF is uniquely placed to help member
movements handed the advantage of the opportunities—and manage the challenges—posed
by globalization The IMF tracks global economic trends and performance, awaken its
member countries when it sees problems on the horizon, provides a forum for policy
dialogue, and passes on know-how to governments on how to tackle economic
difficulties The IMF gives policy advice and financing to members in economic problems
and also works with developed nations to help them to achieve macroeconomic
stability and reduce poverty

Objectives of IMF

To facilitate the expansion and balanced growth of International Trade

.To promote exchange rate stability

.To establish its resources available to its members who are well experienced in
BOP problems.
.To make a multilateral system of payments

.To promote international monetary cooperation

Conditionality
• IMF lends to its member countries, ensuring that, members are pursuing policies that will
improve external payment problems.
• Commitment to implement corrective measures.
• To repay in a timely manner .

GATT

The prolonged recession before the world war 2 nd & the devastation caused by the world war
2nd led to the BRETTON WOODS conference resulting in the formation IMF , IBRD &
ITO. The IME IBRD and ITO, were formed in 1945 but USA didn't ratify ITO.
23 countries met in Geneva in 1947 & signed a agreement on tariff & international trade.
(GATT) Set of multilateral trade agreements aimed at the ending of quotas and the
removing of tariffs among member countries. Signed on October 30, 1947, by 23 countries
in Geneva (to take effect on January 1, 1948) It Consists of 8 Rounds - Rounds of trade
negotiations.

Principles of GATT

Nondiscrimination
Prohibition of quantitative restrictions
Consultations.

objectives of GATT
To higher the standard of living.
To ensure full employment and a large and
 steadily growing volume of original income and effective demand.
To greater the use of the resource of the world
To increase the production and international trading system.

Evolution of GATT

strength increased from 23 to 125 countries.

50 years has witnessed an exception growth in world trade
Merchandise export grew on an average of 6% annually.
Total trade in 2002 was 22 times than that of 1950.
Big achievements of GATT were the establishment of a forum for continuing
consultation. Disputes that could have resulted in hard feeling are compromised.
Developing countries with balance of payment problems were generally exempted
from liberalization.
The average level of tariff on manufactured products in industrial countries
was brought down from about 40% in 1947 to nearly 3% after Uruguay round.
The first 6 rounds concentrated on reducing tariffs while the 7th round of Tokyo
moved on to tackle non-tariff barriers.
The 8th round helped in establishing the VW () a global organization to regulate
trade between nations.
Today 97 % of the world trade is routed through GATT & WTO .

World Bank

THE WORLD BANK IS AN NTERNATIONALLY SUPPORTED BANK THAT

PROVIDES FINANCIAL AND TECHNICAL help TO DEVELOPED COUNTRIES
FOR DEVELOPMENT PROGRAMS (E.G. BRIDGES, SCHOOLS) WITH THE
STATED GOAL OF REDUCING POVERTY.
Why it came into existence?

The World Bank was made at the end of World War 11 because of many European
and Asian countries needing financing to fund reconstruction efforts.
The Bank is successfully providing financing for these devastated countries.
The International Bank for Reconstruction and Development was the
first "Multilateral Development Bank. “Before World War II had ended.
 Harry Dexter White and John Maynard Keynes conceptualized an international
institution to create exchange rates and provide a source of financing for
reconstruction and development among countries demolish by the war .
What is Bretton Woods Conference ?
The Bretton Woods Conference was held from the 1st to 22nd of July 1944.
Contained 730 delegates from all 44 Allied nations in Bretton Woods.
To regulate the international monetary and financial order after the end of World
War II.
Created two major institutions:
— World bank: (long term loan for distressed economy and member countries) — IMF :
(grants the short term loans to develop the cyclical disturbance in economy.)

PROGRESS
The new bank received its funds from the New York investment community.
The bank create its first, general reconstruction loans to France ($250 million —
largest # ever), the Netherlands, Denmark, and Luxembourg in 1947.
The bank's first bond offering abroad, worth €5 million, came in
London in 1951.
China used IDA loans for agriculture and education projects while
oil wells were financed with IBRD loans.
It helped in undertaking the Indus water dispute between India
and Pakistan.

World Trade Organization (WTO)

INTRODUCTION
It is said that ," the World Trade Organization (IWO) is the only international organization
dealing with the global rules of trade between nations. Its main function is to make sure that
trade flows as smoothly, predictably and freely as possible."

FACTS ABOUT WTO

• Location: Geneva, Switzerland
• Established: 1 January 1995
• Created by: Uruguay Round negotiations (1986-94)
• Membership: 162 countries on 30 November 2015
• Budget: 196 million Swiss francs for 2011
• Secretariat staff: 640
• Head: Roberto Azevedo (Director-General)

BASIC PRINCIPLES OF WTO

Non discrimination

For e.g. India is trading with many countries by imposing some tariffs on import or export,
but acc. to WTO we may no impose more tariffs on one trading nation and low tariffs on
another. We must treat them equally .

Transparency
For eg. India changed its policies regarding direct foreign investment. So Indian
Government released a press note for other countries regarding its policy change. Press note
came in effect from May 12, 2015.

Binding Commitments

For eg. India is doing free trade with Sri Lanka (1998) and Thailand (2003) having trade
agreements with Bangladesh, Bhutan, Maldives, Japan, South
Korea, Mongolia etc.

Reciprocity.

For eg. In case of Russia—USA and Iran-UNO, trade sanctions were imposed on Russia and Iran
restricting them to do trade with other countries.