Quest 1 (a): What are the dimensions of International Business?Answer – In today’s rapidly ever evolving and changing business world, whereglobalisation is the key for the success of any business, nearly all businessenterprises big or small are inspired to carry on business across the globe. The basic tasks and functions of international business are almost the same asdomestic business, but there is great difficulty in performing the functionseffectively and integrating them to serve organisational objective. The internationalisation of business can be viewed as a four dimensionalconstruct based on the premise that an enterprise can be more or less globalalong each of four major characteristics/dimensions:-
Globalisation of market presence
- It refers to the extent to which a companytargets customers in all major markets within its industry throughout the world.For example, in 1993, NTT of Japan had no presence at all either in NorthAmerica or in Europe. In comparison, IBM, Sun Microsystems and Canon were themost globalised firms.
Internationalisation of supply chain
– It refers to the extent to which thecompany is accessing the most optimal locations for the performance of variousactivities in its supply chain. It may be possible for a firm to have a fairly regionalmarket presence and yet a highly globalised supply chain or vice versa. ForExample, Toyota has a good supply chain. In 1965, Toyota produced about two-thirds of all its cars in Japan: the remaining one third was produced in itsaffiliates spread over 25 countries in America, Europe and Asia. Furthermore, thecompany exported 38% of its domestic production to foreign markets. Thecompany have not only taken access to various locations but have at the sametime created a flow of capital, goods and know how between Japan and overseasaffiliates.
Globalisation of capital base
– It refers to the extent to which the company isaccessing optimal sources of capital on a worldwide basis. The Hong Kong basedinternet service provided China.com represents a good example of how acompany can be ‘local’ in terms of market presence as well as supply chain andyet have a highly globalised capital base.
Globalisation of corporate mindset
- It refers to the ability of the company tounderstand and integrate diversity across cultures, and markets. General Electric(GE) serves as a good example of a firm with an increasingly global mindset. Thehuman capital of GE is highly globalised, it has strong worldwide corporate