International

Business
Definition
Need for IB
International V/S Domestic Business
Differences between - International

Business , International Trade &

International Marketing
Globalization

Definition
International business consists of
transactions
that are devised and carried out
across national borders
to satisfy the objectives of individuals,
companies , organisations & Govt. bodies.

Need For IB
No country is self sufficient.
Economic isolation is no more possible.
Acquisition of required resources.
Surplus production / Economies of scale.
Technology .
Consumer awareness / behavior.
Driving cost advantage.
Facilitates in Driving Diplomatic / International
relations between regions & Countries.

Domestic v/s International Business

1/2
Different customer profile
cultural, economic, legal, social and political

systems
greater complexities associated with payment,
distribution, transport and insurance
Complex trade disputes settlement process
Non performance penalties
customs control
import duty (where applicable)
technical and administrative regulations

Domestic v/s International Business

changes to be made in the product
Exchange rates, Foreign currencies,
different modes of transport,
international trade documentation,
different time zones
different languages
intense competition
greater financial resources required
International trade barriers Quotas etc.

2/2

Differences between - International Business ,

International Marketing & International Trade

INTERNATIONAL BUSINESS
between organisations / business houses
in different countries Includes all aspects of business with backward and forward linkages like

production, human resources, importing/sourcing, financing, distribution

etc.

INTERNATIONAL

MARKETING

between organisations / business houses

in different countries
Includes forward linkages only

INTERNATIONAL TRADE
Between

countries
On a macro level
Mainly statistics

INTERNATIONAL
BUSINESS
GLOBALIZATION
GLOBALIZATION

Nokia phone Finnish technology made in

China used in India by an Indian Engineer

studied in USA trained in Germany working
for a US company Ford making American cars
in India using Japanese engine (Nissan), Korean
tires (Kumho), oil & Gas from Saudi Arabia,
German stereo (Philips) but made in China
also exported to Srilanka, Bangladesh,
Pakistan, Mauritius .
A software from US company Microsoft
developed by an Indian engineer based in
Singapore used in Japan, Australia

= GLOBAL VILLAGE

DEFINITION
Ongoing economic integration and growing

interdependency of countries worldwide.

Globalization refers to the free cross-border
movement of goods, services, capital,
information and people.
Globalization is the closer integration of the
countries and peoples of the world, brought
about by the enormous reduction in the costs
of transportation and communication and
breaking down of artificial barriers to the flow
of goods and services, capital, knowledge and
people across the borders.

Factorsinfluencing
influencingglobalization
globalization
Factors
1. Economic liberalization
2.
3.
4.
5.
6.
7.
8.
9.

Technological breakthroughs
Multilateral institutions
International economic integrations
Move towards free marketing systems
Rising R & D costs
Global expansion of business operations
Advents in logistics management
Emergence of Global customer segment

Factors Restricting Globalisation

1.
2.
3.
4.
5.

Regulatory controls
Emerging trade barriers
Cultural factors
Nationalism
War and civil disturbances

ADVANTAGES
Maximization of economic efficiencies
Enhanced trade
Increased cross-border capital movement
Improved efficiency of local firms
Increase in consumer welfare

DISADVANTAGES
Unequal players developed vs developing

nations
Widening gap between the rich and poor
Wipe out of domestic industry
Unemployment and mass lay-offs
Balance of payments problem
Increased volatility of markets
Diminishing power of Nation States
Loss of cultural identity
Shift of power to Multinationals
Effect on the national environment

TYPES
OF
Globalization
Economic Globalization.
Globalization of Production
Globalization of Markets
Globalization of competition
Globalization of technology
Globalization of corporations & industries

Financial Globalization
Cultural Globalization
Political Globalization

Difference
Differencebetween
betweenEXPORT,
EXPORT,
INTERNATIONAL,
INTERNATIONAL,
MULTINATIONAL
MULTINATIONALAND
ANDGLOBAL
GLOBAL
MARKETING
MARKETING
The E P R G Framework of
International
Management Orientation

EPRG Framework
Howard Perlmutter

Perception of Intl business Intl Management

Orientation
ETHNOCENTRIC Export Marketing- same product
POLYCENTRIC Intl
REGIOCENTRIC

Marketing- diff product, diff market

Multinational Marketing-

diff region,

diff product

GEOCENTRIC Global Marketing- diff market, same

product