Challenges in

International
Business
GROUP 5
GAMO
GEDRAMA
GEMINA
MAESTRE
Contents
01. Today's World of Business

02. What is International Business

03. Why Do Companies Go International
04. The Participants in International Business

05. The Global Perspective of International Business

06. Why Study International Business

07. Practical Tips

Today’s World of Business
International business differs from domestic business by
degrees. Although laws, cultures, and economic conditions
differ within countries, such differences are usually less
marked than those among countries.

Most countries vary internally, causing

companies to alter their business practices
from one region to another.
Today’s World of Business
To successfully conduct business abroad, companies must
often adopt practices other than what they are accustomed
to domestically. Differences in the legal-political, economic,
and cultural environment all may necessitate a company's
altering every type of business activity, from production
and accounting to finance and marketing

Legal-Political Environment. Despite some

differences in regional or municipal laws within a
country, overriding national laws link a whole
country together.
Today’s World of Business
Political relationships between countries also influence
what companies can do internationally.
Economic Environment. People in rich countries,
such as the United States, Canada, and Sweden,
earn on average about 100 times more than
those in such poor countries as Burkina Faso,
Bangladesh, and the Democratic Republic of
Congo. In fact, the average income in most of the
countries is very low. A number of conditions
correlate substantially with countries' economic
levels, even though some countries are
exceptions.
Today’s World of Business
Cultural Environment. "Culture" refers to the specific learned
norms of society based on attitudes, values, beliefs, and
frameworks for processing information and tasks. These norms
vary from one country to another, and they are reflected in
attitudes toward certain products, advertising, work and
relationships among the people of a given society.
 What is International Business?
What is International Business?
International business is
all commercial
transactions—private and
governmental—between
two or more countries.
Why should we study
International Business?
Furthermore, an international
A simple answer is that
business is any firm that
international business engages in international trade
comprises a large and or investment. All a firm has
to do is export or import
growing portion of the
products from other
world’s total business. countries.
Why do companies go international?
Companies engage in international business in order to:
Minimize Competitive Risk
Acquire Resources
Expand Sales
Diversify Sources of Sales and Supplies
Increase in Global Competition
Development and Expansion of Technology
Liberalization of Cross-Border Movements
Development of Supporting Services
THE PARTICIPANTS
IN INTERNATIONAL
BUSINESS Small
Companies

Multinational
Corporations
(MNCs)
SMALL COMPANIES

Small businesses are increasingly

engaging in international trade and
investment due to quicker turnaround
times in exports, facilitated by
technological advancements such as
electronic distribution.
SMALL COMPANIES

Electronic distribution, particularly

through the World Wide Web (WWW), is a
cost-effective method for many small
businesses to reach customers.
SMALL COMPANIES
Despite the helpful technological advancements,
some still did not start exporting due to some certain
myths, like:

(2) small businesses

(1) there is no export
find it difficult to
financing available
research and identify
for small businesses
international markets
SMALL COMPANIES

Despite myths hindering exporting, small

businesses play a vital role in national
economies—through employment, new
job creation, development of new
products and services, and international
operations, typically exporting
SMALL COMPANIES

Many small businesses cannot afford to

create an international division, so they
may turn to export management
companies to handle details.
SMALL COMPANIES

Due to limited resources to exporting,

some small businesses pursue other
strategies like franchising which require
low investment in capital as an
alternative to traditional exporting.
MULTINATIONAL CORPORATIONS (MNCS)
Multinational Corporations (MNCs) can
operate either:

(b)
(a)
Part of global
Independently
network
MULTINATIONAL CORPORATIONS (MNCS)

MNCs contribute significantly to

economies by creating jobs, investment,
and tax revenue, but downsizing and
factory closures can also impact
communities negatively.
MULTINATIONAL CORPORATIONS (MNCS)

Because many MNCs have become

complex conglomerates, it is difficult to
identify which companies are the parents
of which, or which companies own
various other companies or properties
around the world.
 The Global Perspective of International Businsess
Globalization is a term used to describe how trade and
technology have made the world into a more connected and
interdependent place. Globalization refers to the shift toward
a more integrated and interdependent world economy.

Globalization has two main

components: the globalization of
markets and the globalization of
production.
The Global Perspective of International Businsess
The globalization of
markets refers to the
merging of historically
distinct and separate
markets into one huge
global marketplace.
The globalization of production
refers to the tendency among
firms to source goods and
services from locations around
the globe to take advantage of
national differences in the cost
and quality of factors of
production (such as labor,
energy, land, and capital).
Why Study International Business?

International business affects the activities of every consumer,

every worker, company, and government over the world.

By studying international business you will become a

more intelligent consumer, a more selective applicant/
candidate for a job, a more open-minded and
knowledgeable "student" of the world around you, and
more sensitive toward other culltures.
PRACTICAL TIPS Identify the
Tips to become successful
internationally: Target Market

Find the Most

Appealing
Customer Benefit

Develop a
Motivating Offer
Decide How to
Publicize the
Firm’s Business
Establish a Plan to
Promote Customer
Loyalty
PRACTICAL TIPS
Tips to outsell competition abroad:
a. Price e. Quality i. Extras

b. Packaging f. Performance j. Service

c. Delivery g. Features k. Proof

d. Benefits h. Availability
THANK
YOU!