UNIVERSITY OF TURBAT

SUBMITTED TO SIR MALIK DAD

SUBMITTED BY MARAJ MEHBOOB

DEPARTMENT MANAGEMENT SCIENCE

PROGRAM BS BBA

TOPIC TITLE QUESTION ANSWER

COURSE international BUSINESS

ASSIGNMENT NO: 1ST

SUBMISSION DATE 01/10/2020

SEMESTER 6TH

QNO3:Why companies engage in IB?

Because Companies Engage In international Business For The purpose Of Different Reasons but The
Main Object And Goal Of Is Typically Growth Or Expansion Of A Company Where The International
Expansion Of A Company Where The International Companies Hire The International Employees And
Searching For New Markets And International Companies Can Help To Diversify And Expand A Business.

No1:To Expand Sales:

Companies Are Dependent On Their Consumer Interest And Its Product And Service And The Consumer
Willing And Ability To Purchase Them When The Number Of Consumer Is Increase Also Standard Of
Living Increase and Demand of Consumer Increase The Power Of Purchasing Is High Of Consumer Then
Companies For The International Business To Expand Their Sales To Maintain The Demand Of Consumer
And Expand Their Business and High Profit. International Business Can Be More Profitable Then
Domestic This May Be Due To Higher And Lower Costs In Foreign Markets.

No2: Utilization Of Resources.

International Business Makes Optimum Utilization Of World Resources International Business Utilize
Resources From All Over The World It Uses Finance And Technology Of Rich Countries And Raw
Materials because The Companies go For International Business To Maximize The Resources Of Their
Company And Earn More Revenue Through These Resources .

NO3: Competition.

Competition May Become A Driving Force Behind Internationalization These Might Be Intense
Competition in The Home Markets But Little In Certain Foreign Countries A Protected Market Does Not
Normally Motivate Companies To Seek Business Outside The Home Market.
No4:Saturation Of Domestic Market.

The Market for A Number Of Products Tends To Saturate Or Decline In Advance Countries This Often

Happens When The Markets Potential Has Been Almost Fully Tapped Business Undertake Operations In
Order To expand Sales Acquiring Resources From The Foreign Countries Or To Diversify Their activity in
The Other Country.

QNO4:What are the different entry modes of IB? Elaborate your answers discussing the advantages
and disadvantages alongside the relevant examples.

1)‌EXPORTING:

IT IS The Process Of Selling Goods And Services Produced In One Country To Another Exporting Can Be
Direct And Indirect Exporting Is Generally The Easiest Way To Enter An International Market Exporting Is
The Sales Of Products And Services That Are Sourced From Home Country To An Other.

Advantages Of Exporting:

1: Low Risk

2:No Need Of Investment In Foreign Production Facilities

3: Fast Enter Into International Markets

Disadvantages Of Exporting:

1:Limited Control Exporter Typically Have Little Exporter Typically Have Little Control Over The
Marketing And Distribution Of The Their Products.

2: face High Transportation Charges And possible Tariffs And Must Pay Distribution for A Variety Of
Services.

Example Of Exporting

1:General Motors Car And Truck Maker.

2: Johnson And Johnson Medical Equipment Supplies.

2) Joint Venture:

It Is used When Two Or More Companies Want To Achieve Some common Purpose And Expand
International operations it Is Strategy Used By Companies To Enter A Foreign Market And Share
Ownership And Management With An Other Company There Are Some Common Purpose

1 Risk Sharing.

2 Technology Sharing.

3 Profit Sharing.

4 Enter Into foreign Market.

Example Of Joint Venture:

1)Uber And Volvo.

2)Tata And Docomo.

Advantages Of Joint Venture.

1 New Insights And Expertise.

2 Better Resources.

3 Both Side Share Risk And Cost.

4 You Are More Likeily To Be Successful.

Disadvantages Of Joint Venture.

1 Conflict Arise Between The Partners.

2 Management Conflict Arise.

3 Must Be Same Objective To Be Successful.

3) Franchising:

Franchising Is A Business Under Which The Owner Or Franchisees Licen The Franchisor Is The Business
That Licenses The Franchise.

Example Of Franchising.

1 Burger King

2 McDonald

3 KFC

Advantages Of Franchising.

1 Good Will Of Parent Company.

2 Less Risky.

Disadvantages Of Franchising.

1 Trade Secrets Are Revealed.

2 May Be Franchisees Become Competitors.

3 A Bad Franchises May District The Good Will Of The Parent Company.

4 Turnkey Project:

A Turnkey Project Or Turnkey Operation Is A Type Of Project That Is Constructed So That It Can Be Sold
As A Finished Product To The Buyer This Is An Constract To A Build To Order Where The Manufacturer
Make An Item To The Buyer Exact Specification.

Example Of Turnkey Project.

OEG India

Advantages Of Turnkey Project.

1 Saving Of Time And Energy.

2 Quality Assurance.

3 Can Be Avoided Long Term Operational Risk.

Disadvantages Of Turnkey Project.

1 Not Any Information About Basic Knowledge Of Plant Setup.

2 Increasing Cost Burden.

5 Licensing:

Licensing Is A Method In Which A Firm Allows A Person To Use Its Legally Proceted Product Or
Technology Trade Mark Or Copy Right And To Do Business In A Particular Way Within An Agreed Time
And With In An agreed Area.

Examples Of Licensing.

Starbucks Licensor Nestle Licenses.

Advantages Of Licensing.

1 Investment Is Very Low.

2labor Cost Is Also Low.

Disadvantages Of Licensing.

1 May Be Quality Suffers.

2 Good Will Of Licensor Depend On Some How Services Provided By The Licensee.

3 Time consuming Process.

QNO5: Discuss the seven main instruments of Trade policy.

NO1:TARIFFS.

Tariffs Is A Tax Which In Imposed By The Government On Import And Exports Of Goods And Also Tariffs
is Source Of Revenue For The Government And Government Can Also Collect The Tariffs And Generate
Revenue From The Source Of Import And Export And Boosting Their economy Tariffs May Also Be Used
To Rectify Artificially Low Price For Certain Imported Goods.

NO2:Subsidies.

A Subsidies Is A Quantity Of Money Given Directly To Companies And Organizations Or Individuals By

The Government The Main Objective Of Subsidies Is To Encourage Productions And Boost Export And
Promote Research To Reduce Unemployment Or Make Products More Affordable For Consumers And
Most Consumption Subsidies Are Founded In The Developing Nations Specifically Where The
Government Makes The Prices Of Basic Foods Utilities And Educations More Affordable.

NO3: Quota.

It Is Physical Limit On The Amount Of Goods That Can Be Imported And Import Quota Is A Procetion
Device To Restrict The Supply Of Goods And Services From Aboard under Import Quota A Fixed Amount
Of Commodies In The Volume Or Values Is Allowed To Be Imported In The Country During A Specified
Period Of The Time Generally A Year.

Voluntary Export Restrain

Voluntary Export Restrain Is A Limit Placed On Imports Reached With The Agreement Of Supplying
Country.

NO4: Antidumping Policies.

Antidumping Duty Is An Import Duty imposed By The Government On Imported Products Which Have
Less Price Then Their Normal Values Or Domestic Prices When The Export Price Of A Products Imported
Inti India Is Less Then The Normal Value Of Like Articles Sold In The Domestic Market Of The Exporter It
Is Knows As Dumping The Duty Is Aimed At Ensuring Fair Trading Practices And Creating Level Of Playing
Filed For Domestic Products With Regard To Foreign Producer And Exporter.

NO5:Local Content Requirement.

The Local Content Requirement Is A Fraction Of goods That Must Be Produced Locally in Order To Enjoy
The Benefits Of A Free Trade Agreement Most Of The Time The Requirement Is Presented In physical
Terms So It Is Easier To Determine The Percentage Of Local Productions This Method Used To Proceted
The National Industry And Promote Companies To Settle Down The Manufacturing Bases Rather Then
Assemble Things.

NO6 Admistrative Policies

Administrative trade policies are bureaucratic rules that are almost always deliberately designed to
restrict the flow of a particular import into a country. Antidumping policies are designed to punish
foreign firms that engage in Dumping.

QNO6:Write down notes on the following international organization’s:

NO1 International Monetary Fund (IMF)

International Monetary Fund is Not A Bank It Is Fund And The International Monetary Fund Is The
Second International Organization Next To The World Bank International Monetary Fund Which Came
Into Existence In 1945 Has It Headquarter Located In Washington DC In 2005 Had 191 Countries As Its
Member The Major Idea Underlying That Setting Up To The IMF Is To Evolve An Orderly International
Monetary System Faciliting System Of International Payment And Adjustment In Exchange Among The
National Currencies IMF Support The Countries To Balance Of Payment Because They Give To support
The Countries Rum Smoothly and To Promote Through International Monetary cooperation Through
Permanent Institutions.

NO2 GATT General Agreements On Tariffs And Trade.

It Is Not Organization general Agreement Tariffs Tarde Is Agreement When They Run For That’s Time
They Run To Make New Organization To promote Of International Tarde And for The Purpose Of Trade
Tariffs To Low The Trade Tariffs General Agreement Tariff Trade Was Legal Agreement Between Many
Countries Whose Over All Purpose Was To promote International Trade By Reducing Or Eliminating
Trade Barriers Such As Tariffs And Quota Any Proposed Change In The Tariffs Or Any Types of
Commercial Policy Of a Member Country Should Not Be Undertaken Without The consultation With The
Other Parties To The Agreement The Countries That Ahead to get Work Towards The Reductions Of
Tariffs And Other Barriers To The International Trade Should Be Negotiable With In The Frame Work Of
General Agreement Tariffs And Trade.

1 Raising Standard Of Living.

2 Ensuring Full Employment.

3 Developing Full Use Resources Of The World.

4 Expansion Of Production And International Trade.

GATT Was Singed By 23 Nations In Geneva On October 30/1947 And Took Effect On Jun 1948 It
Remained In Effect Unit The Signature By 123 nations Marrakesh On Apr 14 1994.

NO:3World Bank.

Work Is An International Financial Institution That Provide Loans And Grants To The Government Of
Poor Countries For The Purpose Of Pursuing Capital Projects World Bank Is Base On Two Major
Organizations (IBRD) international Bank Of Free Construction Development (IDA) International
Developing Authority The Main Purpose Of World Is To Finish The Poverty In The World And To Make
Facilities Of Loans And Support The Poor Countries To Boost Their Economy And Increase The Education
And Work For The Development Of Country The World Was Created At the 1944 Bretton Woods
Conference Along With The International Monetary Fund To World Bank And The IMF Are Both Based In
Washington DC And Work Closely With Each Other The World Is Made Up Of 189 Member Countries
These Member Countries Or Shareholders.

NO4: Word Trade Organization (WTO)

The World Trade Organization Is The Only Global International Organization Dealing With The Rules Of
Trade Between Nations As Its Heart Are WTO Agreement Negotiable Are Signed By The Bank Of The
World trading Nations And Ratified In Their Parliament The Goal Is To Help producer Of Goods And
Services Export And Import Conduct Their Business WTO That Made Open Trade Between Nations But
Also Maintained Some barriers For The Benefits Of All WTO Is The Sole International Body Concerned
With The Provision Of Cross Country Tarde Based On Geneva At Switzerland.

QNO1: What factors have contributed to the growth of globalization in recent decades?

1 Geographic Influence:

In The Geographic Influences to Determine The Economy of His Growth And Developing System Because
every Country Need To Develop His Country To Stable Their Economy System And See The
Geographically How Operates His Business And Economy System Of A Country.
2 Political Policies:

In The Political Policies To Determined The business Of His Country And how Businesses Operate In The
Country and Which Types Of Business Should Be In The Country Because To the Contribution Of growth
The Businesses Play Very Important Role To Help The Country For Growth And Sustain The Economy Of
His Country Every Country Should Have Different Political Policies for The Purpose Of Sustaining And
Achieving The Goal And to Determined the Business What Should Be.

3 Legal Policies:

Every Country Should Have Different Legal Policies And Producer To Operate Their Business And
determined businesses What Should Be In The Country The Main Purpose Of Legal policies is That The
Businesses Run Legally In The Country Not Operate Inllegally Because When in legal Businesses Run In
The Economy The carrier Of Not Good And Not Smoothly Run Of Is Country That Why every Country
Make Their legal Policies And Procuder.

4 Behavior Factor:

In The Behavior Factor To Require The Changes In The Businesses Because When The economy Not
Adopt The Changes In The Businesses they Do Not Run And Not Manage Their Businesses when The
Applying The Changes And To Get New Innovation they Are directly Go For Growth That Why Behavior
Factor Is Very Important Factor For The Changes Of Their Business.

QNO2:What are the criticisms of globalization?

1 Economic Growth And Enviornmental Stress:

The Main Problem Of Globalization Is That to Use The Nonrevenueable Resources And Increase The
Pollution And Global Warming And The Production Of Firms Also In The Outside Of The Country Where
To The Enviornmental Standard Is Less Strict The Enviornmental Stress Is Problem For The Globalization
because The to run The Businesses To See Enviornmental Factor Of His Country.

2 Offshoring:

It Is The Process Of To Shifting The Business From One Country to An Other Country And To transfer
Their Business Activity From One Place To An Other Place And The Process Of Relocation Of His Business
Because in The Some Country Labor Cost Is Low For Example In The China Labor Cost Is Very Low Every
one want To Shift Their Business In The China.

3 Threats To National Sovereignty:

The Industries Will Loss The Freedom To act Locally Because Every country Should Have Different
Policies And Producer To Follow Then In The World Every Country to Make The Rules And Standard To
Follow Them And Industries Will Dependent To Follow The Rules And Regulation Of His Country When
The Do Not Follow Them They Do Not Run Their Industries In Their Country.