•Daniels; Rodebaugh and Sullivan – International

business is all commercial transactions – private and

governmental between two or more countries.
•Taggart and McDermott – International business
can be defined as those business activities that
involve the crossing of national boundaries.
•Hill (2005) – International business is any firm that
engages in international trade or investment.
 International Business

• According to International business Journal ,International

business is a commercial enterprise that performs
economical activity beyond the bounds of its location, has
branches in two or more foreign countries and makes use of
economic, cultural, political, legal and other differences
between countries.
 Importance of International
Business
• Earn Foreign Exchange
• Optimum utilization of resources
• Achieve its objectives
• To spread business risks
• Improve Organization's efficiency
• Get benefits from government
 Evolution of International
Business
• East India Company
• Effects of world wars
• Human Civilisation
• Every country is not self sufficient
• More than 2 countries
• It is not a phenomenon of a modern times
 Process of Internationalisation

• Domestic Companies
• International Companies
• Multinational Companies
• Global Companies
• Transnational Companies
 Approaches in International
Business
• Ethnocentric Orientation
• Polycentric Orientation
• Regiocentric Orientation
• Geocentric Orientation
Major Trends in International
Business
• Population and Demographic Shifts
• Speed of Innovation
• More Informed Buyers
• Increased Business Competition
• Slower Economic Growth
• Emergence of Clean Technology
 INTERNATIONAL
MARKETING DECISIONS
• Deciding on entering International market
• Analyse Macro and Task environment
• Selecting the markets
• Select entry strategies
• Exporting
• Licensing
• Joint venture
• Direct investing
• Designing the Marketing Program
 Difference between International Marketing and Domestic Marketing
Basis Domestic Marketing
Definition
“It is concerned with the marketing
practises within the researchers or
Marketers home country (domestic
market).”
Role of Politics Political factors are of minor
importance.
Languages & Cultures One language and culture.
Financial Climate Uniform financial climate.
Risk Involved Normal risk is involved.
International Marketing
“It is the performance of business
activities designed to plan, price,
promote and direct the flow of a
company’s goods and services to
consumers or users in more than
one nation for a profit.”
Political factors play a vital role.
Many languages and difference in
cultures.
Variety of financial climate.
Higher risks of different nature are
involved.
 Contd…
Control of Marketing Control of marketing activities is Control of marketing activities is
Activities easy as compared to international difficult because of different factors
activities. like – regional, cultural, political,
etc.
Payment Minimum payment and credit Considerable payment and credit
risks. risks.
Familiarity
Well familiarity with domestic Lack of Familiarity with foreign
market. markets, research becomes
essential.
Knowledge Management knowledge is Specific management knowledge
Requirement required. and competence is required.
Product Mix
Product mix is decided keeping in Product mix is decided according to
view the satisfaction and more foreign market.
sales.
Product Planning and Product planning and development Product planning and development
Development according to domestic market. according to foreign market.
Focus Focus of interest is on general Focus of interest is on strategic
information. emphasis.
Market Aspect
Market is much more Different or diverse markets
homogeneous and different fragmented in nature
segments.
Types or Forms of International
Business
• Direct Export
• Indirect Export
• Licensing
• Franchising
• Turnkey Projects
• Strategic Alliance
 Growing Economic power of
developing economies
• Brazil Nominal GDP: $1.85 trillion Brazil GDP
(PPP): $3.37 trillion
• Russia Nominal GDP: $1.64 trillion Russia GDP
(PPP): $4.21 trillion
• India Nominal GDP: $2.94 trillion India GDP
(PPP): $10.51 trillion
• China Nominal GDP: $14.14 trillion China GDP
(PPP): $27.31 trillion
International Business helping the economic
growth of the country

• Poverty Reduction
• Development Outcomes
• Make use of abundant raw materials
• Greater choice for consumers
• Specialisation and economies of scale
• Greater efficiency
• Service sector trade
• Global growth and economic development
Advantages of international business

• Earning valuable foreign currency

• Division of labor
• Optimum utilization of available resources
• Increase in the standard of living of people
• Benefits to consumers
• Encouragement to industrialization
• International peace and harmony
 Contd…

• Cultural development
• Economies of large-scale production
• Stability in prices of products
• Widening the market for products
• Advantageous in emergencies
• Creating employment opportunities
• Increase in Government revenue
 COMPETITIVE ADVANTAGE IN A
GLOBAL SETTING

• Large Scale Economies

• Diversification
• Political and economic risks
• Portfolio Planning
• Upgradation of employees
• Cheap source of resources
 Problems of International Business

• “Life is not bed of roses”.

• Political Factors
• Huge Foreign Indebtedness
• Exchange instability
• Entry Requirements
• Tariffs,Quotas and Trade Barriers
• Corruption
• Bureaucratic Practices and Government
• Technological Pirating
• Quality Maintenance
• High Cost
 CHANGING TRENDS IN
INTERNATIONAL TRADE

• Forced Dynamism
• Cooperation among Countries
• Liberalization of Cross-border Movements
• Transfer of Technology
• Growth in Emerging Markets
 GLOBAL SOURCING AND
PRODUCTION SHARING

• Spreading Web of Global Production Network

• Outsourcing
• Purchase survey
Production sharing is a natural corollary of the growing
international sourcing. Production sharing, a term
introduced by Drucker, refers to the practice of carrying out
different stages of manufacturing of a product in several
countries.