INTERNATIONAL 

BUSINESS
AND MARKETING
David Humala Sitorus
Syllabus
◦ Reasons for countries to trade
◦ Measuring trade between countries 
◦ Barriers to international trade
◦ Reduce international barriers
◦ International Economic Community
◦ Entering Global Market
◦ Strategy to penetrate the global market 
◦ Multinational Companies to Global Businesses
 Reasons for countries to
trade
Exports are:
a) Goods produced domestically and sold in other countries
b) Import is:
c) Goods and services produced in foreign countries are purchased by domestic consumers
Trade is very important for a country and its business because it can encourage economic
growth by providing markets for its products and access to natural resources that are
needed
C) source of international production factors
   the company's decision to operate abroad depends on the availability of natural
resources, capital, labor quality and entrepreneurial level
D) international market size 
Understanding market size helps you distinguish between two categories: a market that can
be handled, which is a total income opportunity for your product or service; and available
markets, which are part of a manageable market that you can realistically compete with
Measuring trade between
countries
 The trade balance is: The
difference between the value of a
country's exports and imports
 Balance of Payments are: The
difference between the amount of
cash flow into or out of a
country.
 Exchange rates are: the value of
a country's currency relative to
another country's currency
Barriers to
international
trade
◦ Social cultural differences -> Cultural
differences are the various beliefs, behaviors,
languages, practices and expressions considered unique
to members of a specific ethnicity, race or national
origin.
◦ Economic difference -> Economic inequality is the
difference found in various measures of economic well-
being among individuals in a group, among groups in a
population, or among countries. Economic inequality
sometimes refers to income inequality, wealth
inequality, or the wealth gap. 
◦ Political & legal differences -> Legal means that
which is bound by law and enforced. Political is that
which comes from policies or the debates or ideas
surrounding policy.
◦ Type of trade restrictions -> a. Rates : taxes imposed
on imported goods. 
 b. Quota : limit the number of certain products that
can be imported in a certain period of time
 The organization that supports international trade
is : 
Reduce international 1) The World Trade Organization (WTO) 

barriers 2) World Bank

3) International Monetary Fund (IMF)
 The International Economic Community reduces trade

International barriers and supports regional economic integration

1) NAFTA

Economic Community 2) CAFTA-DR

3) Europe Union 
Entering Global
Market
the company faces a number of problems
in making the decision to go global :
1. determine which foreign markets to
follow
2. analyze the expenses needed to
enter new markets
3. decide on the best way to
anticipate overseas operations
Strategy to penetrate
the global market
After the company completes its research
and decides to do business abroad, there
are 3 strategy :
a) exporting & importing
b) Arrange into contractual agreements,
such as franchises, licenses, and
subcontract agreements 
c) direct investment in foreign markets
through acquisitions, joint ventures,
or establishing foreign divisions
Multinational Companies
to Global Businesses
a) Global business strategy 
   The company offers standardized
products and sells them in the same way
in the domestic and foreign markets
B) Multidomestic business strategy
   the company conducts product
development and marketing to meet the
needs and tastes of different national
markets
I CAN DO IT
SEE YOU NEXT WEEK