INTERNATIONAL BUSINESS

AND ITS OVERVIEW AND ITS

TYPES AND TYPES OF
ENVIRONMENT

MADE BY- ABHISHEK SINGLA

CLASS-MBA
ROLL NO-
 INTERNATIONAL BUSINESS-MEANING

 The exchange of goods and services, resources,

knowledge and skills, among individuals & businesses in
two or more countries.
 Transaction that are carried out across national borders
to satisfy the objective of individuals and organization.
 All commercial transactions that take place between two
or more countries.
 Private and Government
 Sales
 Investments
 Logistics
 Transportation
 OVERVIEW OF INTERNATIONAL BUSINESS

 NATURE-
 Accurate information timely
 The size of internatinal business
 Market segmentation
 International markets have more potential than
domestic markets
 SCOPE

 International marketing
 International finance and investments
 Foreign exchange
 Global HR
 FEATURES

 Large scale operations

 Integration of economies
 Dominated by developed countries and MNCs
 Benefits to participating countries
 Keep competition
 Special role of science and technology
 International restrictions
 IMPORTANCE

 Earn foreign exchange

 Optimum utilization of resources
 Achieve its objectives
 To spread business risks
 Improve organization’s efficiency
 Get benefits from government
 Expand and diversity
 Increase competitive capacity
 TYPES OF INTERNATIONAL BUSINESS

 LICENSING-
It gives licensee certain rights or resources
to manufacture and/or market a certain product in a
host country.
 Licensing is a business agreement involving two
companies: one give the other special permissions,
such as using patents or copyrights, in exchange for
payment.
 An agreement here inloves two firms from different
countries, with the licensee receiving the rights or
resources to manufacture in the foreign country.
 FRANCHISING

 It is the practice of licensing another’s firm’s

business model as an operator.
 It is an alternative to building chain stores to
distribute goods that avoids the investments and
liability of a chain.
 The franchiser is the supplier who allows an
operator,or a franchisee, to use the supplier
trademark and distribute the supplier goods.
 EXPORTING

 It is the practice of shipping the goods from the

domestic country to a foreign country.
 The export word is derived from the meaning as to
ship the goods and services out of the port of a
country.
 In national accounts,it consist of transactions in
goods and services from residents to non-residents.
 Statistics on international trade do not record
smuggled goods or flow of illegal services.
 IMPORTING

 They are the inflow of goods and services into a

country’s market for consumption.
 The country can increase welfare by specializes in the
export of goods for which it has a comparative
advantage and for imports they have disadvantage.
 Comparative advantage describes the ability of
country to produce one specific good more efficiently
than other goods.
 CONTRACT MANUFACTURING

 In this, a hiring firm makes an agreement with the

contract manufacturer to produce and ship the
hiring firm’s goods.
 A hiring firm may enter a contract with a CM to
produce component or final products on a behalf of
the hiring firm for some agreed-upon price.
 There are many benefits in CM, and companies are
finding many reasons why they should be
outsourcing their production to other companies.
 JOINT VENTURES

 In this business model, two or more parties agree to

invest time, equity and effort for the shared of a new
shared project.
 It involved two parties contributing their own equity
and resources to develop a new project.
 Money involved in the joint venture .it is necessary
to have a strategic plan in place.
 Cost of starting new projects are high, a joint venture
allows both parties two share the resulting profits
and the burden of the project.
 OUTSOURCING

 It functions to developing the foreign countries has

become a popular way for companies to reduce cost.
 It is contracting of the business processes to external
firm, usually in the developing countries where labor
cost are cheaper.
 This practice has increased in prevalence due to
better technology and improvements in the
educational standards of the countries to which the
jobs are outsourced.
 OFF SHORING

 It entails a company moving a business process from

one country to another.
 It is the reallocating of the certain business process
from one country to other, resulting in large tax
breaks and lower labor costs.
 It can cause controversy in the a company’s domestic
country since it is perceived to impact the domestic
employment situation negatively.
 MUTLINATINAL FIRMS

 With the advent of improved communication and

technology, corporations have been able to expand
into mutiple countries.
 Mutinational corporations operate in multiple
countries
 MNC’S have considerable bargaining power and may
negotiate business or trade policies with success.
 DIRECT INVESTMENT

 FDI is practiced by the companies in order to benefit

from cheaper labor costs, Tax exemptions, and other
privileges in that foreign country.
 FDI is the flow of investments from one company to
production in a foreign nations, which the purpose of
lowering labor costs and gaining tax incentives.
 FDI can help the economic situations of developing
countries, as well as facilitate progressive internal
policy reforms.
 COUNTERTRADE

 It is a system of exchange in which goods and

services are used as payment rather than money.
 It is the exchange of goods and services for other
goods and services.
 They come under following-
 Switch trading
 Counter purchase
 Buyback
 Offset agreement
 EXTERNAL EVIRONMENT

 It refers to the environment refers to the environment that has indirect influence on the
business and the factors in this are uncontrollable by the business.
 Macro environment factors-
 Political
 Economic
 Social
 Technological
 Legal
 Environmental
 Ethical

 Micro environment factors-

 Customers
 Employees
 Suppliers
 Shareholders
 Media
 Competitors
 ECONOMIC ENVIRONMENT

 It refers to all those economic factors, which have a bearing on the functioning of
buisness. Business depends on the economic environment for all the needed inputs.
 It also depends on the economic environment to sell the finished goods.
 GDP & GNI
 Per captia conversion
 Rate of change in growth
 Purchasing power parity
 Human development index
 Inflation
 Employment
 Debt
 Income distribution
 Poverty
 Labour cost
 Productivity
 Balance of payments
 Economic structures
 POLITICAL ENVIROMENT

 It includes all laws, government agencies and

lobbying groups that influence or restrict individuals
or organizations in the society.
 Philosophy of political parties
 Ideology of the party in the power
 Nature of bureaucracy
 Political stability
 Foreign policy
 HUMAN ENVIRONMENT

 Our earth is human environment, anywhere humans lives and

create facilities is a human environment. there are various types of
human enviornment which are created by humans only in this
world.
 Settlement
 Transportation-
 Roadways
 Railways
 Waterways
 Airways
 Pipelines
 Communication-oral or written
 CULTURAL ENVIRONENT

 Cultural is something that unites people.

 A system of values and norms that are shared among a group of
people and that when taken together a design for living.
 Components-
 Values
 Norms
 Society
 Attitude
 Language
 Religion
 Aesthetics
 Education
 Tradition
THANK YOU