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Introduction to international Business Session -1 , 14.7.2011

Introduction to international Business Session -1 , 14.7.2011 1
1. To outline the historical perspective of globalisation 2. To explain the concept of Globalization 3.
  • 1. To outline the historical perspective of globalisation

  • 2. To explain the concept of Globalization

  • 3. To elucidate factors influencing globalization

  • 4. To discuss the various techniques for measuring globalization

  • 5. To examine reasons for support and criticism of globalization

  • 6. To discuss global business expansion strategy for emerging market companies

  • 7. To explicate the concept of international business

  • 8. To delineates the motives for international business expansion

 globalization in the Christian era  India and china two dominant economies  Role of
  • globalization in the Christian era

  • India and china two dominant economies

  • Role of Venice during 1000-1500 AD

  • Key countries in opening up European trade

  • Position of Portugal

  • Position of India in early 18 th century

  • Position of India in mid 18 th century

  • Position of globalisation during Pre World War I period

  • From World WarI to World War Second

 Phase I ( 1947-65)  Phase 2 ( 1965-80)  Phase 3 ( 1980-90) 
  • Phase I ( 1947-65)

  • Phase 2 ( 1965-80)

  • Phase 3 ( 1980-90)

  • Phase 4( Since early 1990s)

  • Phase V ( 2000 onwards)

 It is the process of creating networks of connections among actors at multicontinental distances, mediated
  • It is the process of creating networks of

connections among actors at multicontinental distances, mediated

through a variety of flows including people,

information and ideas, capital and goods>

 Some terms to signify various aspects of globalization are: ▪ Westernization ▪ Disneyification ▪ Cocacolani
  • Some terms to signify various aspects of globalization are:

Westernization

Disneyification

Cocacolani

Mcdonaldization

Walmartization

  • Development in the means of transport and communication technology

  • Barrier less flow of goods and services, capital, knowledge.

  • Economic globalization

  • Financial globalization

  • Cultural globalization

  • Political globalization

 Movers of Globalisation a. Economic libralisation b. Technological breakthrough a. Manufacturing technologies b. Transportation technology
  • Movers of Globalisation

    • a. Economic libralisation

    • b. Technological breakthrough

      • a. Manufacturing technologies

      • b. Transportation technology

      • c. Information and communication technology

  • c. Multilateral Institutions

  • d. International economic integration

  • e. Move towards free marketing systems

  • f. Rising Research and development cost

  • g. Global expansion of business operations

  • h. Advents in logistic management

  • i. Emergence of the global customer segment

  • Restraining Factors of globalization

    • a. Regulatory control

    • b. Emerging trade barriers

    • c. Cultural Factors

    • d. Nationalism

    • e. War and Civil Disturbances

    • f. Management Myopia

  •  Trade openness through KOF Index of Globalisation  A.T. Kearney Report on Foreign policy globalization
    • Trade openness through KOF Index of

    Globalisation

    • A.T. Kearney Report on Foreign policy globalization index

     G means maximization of economic efficiencies  Enhanced trade  Increased cross border capital movement
    • G means maximization of economic efficiencies

    • Enhanced trade

    • Increased cross border capital movement

    • Improved efficiency of local firms

    • Increase in consumer welfare

     Criticism by NGOs, politicians, consumers and social organization. ▪ Unequal players in G ▪ Widening
    • Criticism by NGOs, politicians, consumers and social organization.

    Unequal players in G

    Widening gap between rich and poor

    Wipe out of domestic industry

    Unemployment and mass layoff

    Loss of cultural identity

    Balance of Payment problem

    Increase volatility of market

    Diminishing power of nation state- Treat to national sovereignty

    Shift of power to multinationals

    Growing income inequality

    Economic growth

     It implies the conduct of business activities beyond the national boundaries. It comprises of all
    • It implies the conduct of business activities

    beyond the national boundaries. It comprises of all the commercial transactions including sales,

    investments and transportations taking place

    between two countries.

    • Activities in international business:

      • International trade

      • International marketing

      • International Investments

      • International Management

     To expand sales- Market seeking motives ▪ Marketing opportunities due to life cycles ▪ Uniqueness
    • To expand sales- Market seeking motives

    Marketing opportunities due to life cycles Uniqueness of product or services

    • To acquire resources

    • Strategic motives-

    To minimize risk Growth and expansion

    • Economic motives

    Profitability Achieving economies of scale Spreading R&D cost

     Difference between currency of home and host country-  Exchange rate  Interest rate 
    • Difference between currency of home and host

    country-

    • Exchange rate

    • Interest rate

    • Inflation

    • Taxation system

    • Government regulation

    • Language barriers

    • Cultural differences

    • Economic policy barriers

    • Technology

     Merchandise Export and Imports  Service export and Imports ▪ Tourism and Transportation ▪ Performance
    • Merchandise Export and Imports

    • Service export and Imports

    Tourism and Transportation Performance of services Use of Assets

    • Licensing and Franchising

    • Turnkey operations

    • Management Contracts

    • Direct and Portfolio Investment

     Marketing  Global manufacturing and supply chain  Management Accounting  Finance  Marketing 
    • Marketing

    • Global manufacturing and supply chain

    • Management Accounting

    • Finance

    • Marketing

    • Human Resources

     Is off shoring good or Bad? 16
    • Is off shoring good or Bad?