Market Scope Limited to a single country Spans across multiple countries

Customer Base Local customers Customers from various countries and cult
Typically smaller compared to international
Market Size Can access larger and diverse markets
markets
Subject to both domestic and international
Legal Framework Governed by domestic law and regulations
treaties
Cultural Primarily familiar with local culture and Requires understanding and adaptation to
Considerations customs cultures
Risks Faces fewer risks Faces higher risks
May face fewer trade barriers and tariffs Encounter trade barriers, tariffs, and custo
Trade Barriers
within the country regulations
Competition Typically faces less competition Typically faces more competition
Competitive
Competition from local businesses Competes with local and global competitor
Landscape
Cost Typically has lower costs Typically has higher costs
Operational Generally simpler due to familiar business More complex due to differences in curren
Complexity environment languages, etc.
Limited exposure to foreign exchange and Exposed to currency fluctuations, political
Risk and Uncertainty
geopolitical risks etc.
May access resources globally and establi
Resource Availability Access to local resources and suppliers
international partnerships
Financial Involves currency exchange, managing int
Primarily operates in the domestic currency
Considerations financial transactions

why study international business?

There are several compelling reasons to study international business:

 Globalized world: The world's economies are more interconnected than ever before.
Understanding international business practices prepares you to succeed in this environment,
whether working for a multinational corporation or a small business looking to expand overseas.
[Prospects.ac.uk]

 Broader skillset: An international business degree equips you with a well-rounded skillset
applicable to various business functions. You'll gain knowledge of international marketing,
finance, law, and logistics, along with honing your communication and cultural competency. [UE
Germany]

 Career prospects: International business skills are in high demand. Companies are increasingly
seeking employees who can navigate the complexities of global markets. A degree in
 international business opens doors to exciting careers in import/export, international marketing,
or global supply chain management. [Purdue Global]

 Global perspective: Studying international business fosters a broader way of thinking. You'll gain
insights into different cultures, economies, and political systems, preparing you to approach
business challenges from a global standpoint. [HBS Online]

 Increased marketability: Even if you don't end up working directly in international business, the
skills and knowledge gained from this field are highly valued by employers. Understanding
international markets can set you apart from other candidates in today's competitive job
market.

why study international business? easily explain

Imagine business as a game. Domestic business is playing on your home field - you
know the rules, everyone speaks the same language, and it's pretty straightforward.

International business is like playing the game all over the world! Different countries
have different rules (laws), languages (cultures), and even the ball (currency) might be
different.

Studying international business teaches you how to play the game everywhere, making
you a super adaptable and valuable player. You'll be in high demand because
companies need people who can win the game anywhere.

there are two broad reasons strategic imperatives, the environmental causes of globalization

Strategic Imperatives:

These are deliberate actions companies take to gain a competitive advantage in the global marketplace.
Examples include:

 Market seeking: Companies enter new markets to expand their customer base and increase
sales.

 Efficiency seeking: Companies look for ways to reduce costs by outsourcing production or
sourcing materials from countries with lower labor costs or abundant resources.

 Resource seeking: Companies seek access to critical resources like raw materials, skilled labor,
or technological advancements unavailable in their home countries.

Environmental Causes:

These are external factors that create conditions favoring increased international business activity.
Examples include:

 Technological advancements: Advancements in transportation (faster ships, airplanes) and

communication (internet) make it easier and cheaper to move goods, services, and information
across borders.
  Trade liberalization: Governments reduce trade barriers like tariffs and quotas, making it easier
for companies to import and export goods.

 Global political climate: More stable political environments and international cooperation
encourage cross-border trade and investment.

Both strategic imperatives (companies actively pursuing opportunities) and environmental causes
(external factors creating favorable conditions) work together to drive globalization.

Ch 2

Describe the major types of legal systems confronting international businesses

International businesses navigating the global market have to contend with a diverse legal landscape.
Here's a breakdown of the major types of legal systems they'll encounter:

1. Civil Law: This is the most widespread system, followed by roughly 150 countries. It stems from
Roman law and relies on comprehensive, codified statutes. Judges play an interpretive role,
applying the code to specific cases. Common examples include France, Germany, and China.

2. Common Law: Rooted in English common law, this system emphasizes judicial precedent. Court
decisions in past cases (case law) hold significant weight in shaping future rulings. The US
(except Louisiana), UK, and India are prominent examples.

3. Customary Law: This system centers on longstanding traditions and practices within a society.
These customs gain the force of law through community acceptance. It's often found in Africa,
parts of Asia, and among indigenous communities.

4. Religious Law: Certain countries base their legal systems on religious principles. Sharia law in
Islamic nations is a prime example. These laws govern various aspects of life, including
contracts, family matters, and criminal justice.

5. Mixed Legal Systems: Many countries have adopted a hybrid approach, incorporating elements
from two or more of the above systems. This reflects their unique history and cultural
influences. Louisiana (US), with its blend of civil and common law, is a good illustration.