INTERNATIONL BUSINESS

INTRODUCTION

International business consists of trades and transactions at a global

level. These include the trade of goods, services, technology, capital
and/or knowledge.
It involves cross-border transactions of goods and services between two
or more countries. Transactions of economic resources include capital,
skills, and people for the purpose of the international production of
physical goods and services such as finance, banking, insurance, and
construction.
International Business also known as globalization. Globalization refers
to the international trade between countries, which in turn refers to the
tendency of international trade, investments, information technology and
outsourced manufacturing to weave the economies of diverse countries
together. To conduct business overseas, multinational companies need to
separate national markets into one global marketplace.
In essence, two macro factors underline the trend of greater
globalization. The first macro-factor consists of eliminating barriers to
make cross-border trade easier, such as the free flow of goods and
services, and capital. The second macro-factor is technological change,
particularly developments in communication, information processing,
and transportation technologies.

"International business" is define as the study of the internationalization

process of multinational enterprises.
Some consumer-electronics producers such as Samsung, LG and Sony,
and energy companies such as Exxon Mobil, and British Petroleum.
Multinational enterprises range from any kind of business activity or
market, from consumer goods to machinery manufacture; a company
can become an international business. Therefore, to conduct business
overseas, companies should be aware of all the factors that might affect
any business activities, including, but not limited to: difference in legal
systems, political systems, economic policy, language, accounting
standards, labor standards, living standards, environmental
standards, local cultures, foreign-exchange
markets, tariffs, import and export regulations, trade
agreements, climate, education.
Each of these factors may require changes in how companies operate
from one country to the next.

One of the first scholars to engage in developing a theory of

multinational companies was Stephen Hymer. Throughout his academic
life, he developed theories that sought to explain foreign direct
investment and why firms become multinational.
There were three phases according to Hymer's work. The first phase of
Hymer's work was his dissertation in 1960 called the International
Operations of National Firms. In this thesis, the author departs from
neoclassical theory and opens up a new area of international production.
At first, Hymer started analyzing neoclassical theory and the financial
investment, where the main reason for capital movement is the
difference in interest rates. Then, he started analyzing the characteristics
of foreign investment by large companies for production and direct
business purposes, calling this Foreign Direct Investment. By analyzing
the two types of investments, Hymer distinguished financial investment
from direct investment. The main distinguishing feature was control.
Portfolio investment is a more passive approach, and the main purpose is
financial gain, whereas foreign direct investment a firm has control over
the operations abroad. Therefore,
. His OLI paradigm, in particular, remains as the predominant theoretical
contribution to study the traditional theory of investment based on
differential interest rates does not explain the motivations for foreign
direct investment (FDI).
According to hymer, there are two main determinants of Foreign Direct
Investment (FDI) where an imperfect market structure is the key
element.
The first is the firm-specific advantages, which are developed at the
specific companies, home country and, profitably, used in the foreign
country.
The second determinant is the removal of control where Hymer wrote:
"When firms are interconnected, they compete in selling in the same
market or one of the firms may sell to the other," and because of this "it
may be profitable to substitute centralized decision-making for
decentralized decision-making".
The second phase is his neoclassical article in 1968 that includes a
theory of internationalization and explains the direction of growth of the
international expansion of firms. In a later stage, Hymer went to a more
Marxist approach where he explains that MNC as agents of an
international capitalist system causing conflict and contradictions,
causing between other inequality and poverty in the world. Hymer is the
father of the theory of MNE", and explains the motivations for
companies doing direct business abroad.
Among modern economic theories of multinationals and foreign direct
investment are internalization theory and John Dunning's OLI paradigm.
Dunning was widely known for his research in economics of
international direct investment and the multinational enterprise
international business topics. Hymer and Dunning are considered
founders of international business as a specialist field of study.
1.3

ADVATAGES OF INTERNATIONAL BUSINESS

1. A Country can Consume those Goods which it cannot Produce:
Commodities produced in India can be found in England and vice-versa.
This helps England to enjoy those goods, which he cannot produce in his
country.
2. The Productive Resources of the World are Utilized to the Best
Advantage of the Country:
Every country expects highest return from its resources and this lead to
fall in price and better goods for consumption.

3. International Business Promotes Peace and Friendship:

No country however big it may be can claim to be self-sufficient. It will
have to depend on other country for something. Free international
business is essential for goodwill, peace and to meet any requirements of
the nation.
4. Heavy Price Fluctuations are Controlled:
If the price of any commodity goes up, the goods can be imported from
abroad and its price can be brought down.
5. Countries Economically Backward but Rich in Resources may
Develop their Industries:
Indian people are opening industries with the idea of sending produced
goods to foreign countries.

1.4

Dis-Advantages of International Business:

1. Dependence on Foreign Business Creates Difficulties in Times of

Need:
In the past, India had to face great trouble and difficulty in getting
ordinary and simple articles like medicine and tools during need or
during the war.
2. The Extreme Specialization that makes a Country Depend on One or
Two Industries is bad
Because if at any time the industry suffer, the economic life of the
people would be endangered.
3. Countries which Sell Raw Materials and Buy Manufactured Goods in
Return are always Loser and cannot improve the Country Economy:
The standard of living of the people cannot improve. International
business under such conditions leads more to discontent and unrest than
to peace and goodwill.
4. International Business may Completely Exhaust a Country’s Natural
Resources like Coal and Oil, which are Irreplaceable:
These goods are exported just for the sake of earning money and profit.
However, the country will have to suffer in the long run when their
source will be dried up completely.
5. Imports of Harmful Drugs and Luxuries Goods ruin the Health of the
Nation:
For this, people blame international business, which is not correct.

RISK IN INTRERNATIONAL BUSINESS

• OPERATIONAL RISK
A company has to be conscious about the production costs to not waste
time and money. If the expenditures and costs are controlled, it will
create an efficient production and help the internationalization.
Operational risk is the prospect of loss resulting from inadequate or
failed procedures, systems or policies. Employee errors. Systems
failures. Fraud or other criminal activity. Any event that disrupts
business processes.
• POLITICAL RISK
How a government governs, a country can affect the operations of a
firm. The government might be corrupt, hostile, totalitarian, etc., and has
a negative image around the globe. A firm’s reputation can change if it
operates in a country controlled by that type of government. In addition,
an unstable political situation can be a risk for multinational firms.
Elections or any political event that is unexpected can change a country's
situation and put a firm in an awkward position. Political risks are the
likelihood that political forces will cause drastic changes in a country's
business environment that hurt the profit and other goals of a business
enterprise. Political risk tends to be greater in countries experiencing
social unrest. When political risk is high, there is a high probability that
a change will occur in the country's political environment that will
endanger foreign firms there. Corrupt foreign governments may also
take over the company without warning as seen in Venezuela.

• TECHNOLOGICAL RISK
Technological progress brings many benefits, but some disadvantages,
including "lack of security in electronic transactions, the cost of
developing new technology ... the fact that this new technology may fail,
and, when all of these are coupled with the outdated existing technology,
[the fact that] the result may create a dangerous effect in doing business
in the international arena.
• ENVIRONMENTAL RISK
Companies that establish a subsidiary or factory abroad need to be
conscious about the externalizations they will produce, as some may
have negative effects such as noise or pollution. This may cause
aggravation to the people living there, which in turn can lead to a
conflict. People want to live in a clean and quiet environment, without
pollution or unnecessary noise. If a conflict arises, this may lead to a
negative change in customer's perception of the company. Actual or
potential threat of adverse effects on living organisms and environment
by effluents, emissions, wastes, resource depletion, etc., arising out of an
organization's activities is considered risks of the environment. As new
business leaders come to fruition in their careers, it will be increasingly
important to curb business activities and externalizations that may hurt
the environment.
• ECONOMIC RISK
These are the economic risks explained by Professor Okolo, "This
comes from the inability of a country to meet its financial obligations.
The changing of foreign-investment or/and domestic fiscal or monetary
policies. The effect of exchange rate and interest rate make it difficult to
conduct international business. Moreover, it can be a risk for a company
to operate in a country and they may experience an unexpected
economic crisis after establishing the subsidiary. Economic risks is the
likelihood that economic management will cause drastic changes in a
country's business environment that hurt the profit and other goals of a
business enterprise. In practice, the biggest problem arising from
economic mismanagement has been inflation. Historically many
governments have expanded their domestic money supplying misguided
attempts to stimulate economic activity.
• FINANCIAL RISK
According to Professor Okolo: "This area is affected by the currency
exchange rate, government flexibility in allowing the firms to repatriate
profits or funds outside the country. The devaluation and inflation will
also affect the firm's ability to operate at an efficient capacity and still be
stable. Furthermore, the taxes that a company has to pay might be
advantageous or not. It might be higher or lower in the host countries.
Then "the risk that a government will indiscriminately change the laws,
regulations, or contracts governing an investment—or will fail to
enforce them—in a way that reduces an investor’s financial returns is
what we call 'policy risk.'
TERRORISM
Terrorism is a voluntary act of violence towards a group(s) of people. In
most cases, acts of terrorism is derived from hatred or ignorance of
religious, political and cultural beliefs. An example was the infamous
9/11 attacks were labeled as terrorism due to the unacceptable of western
culture by the radical Islamic groups. Terrorism not only affects
civilians, but it also has a negative impact towards corporations and
other businesses. These impacts may include physical vandalism or
destruction of property, sales declining due to frightened consumers and
governments issuing public safety restrictions. Firms engaging in
international business will find it difficult to operate in a country that has
an uncertain assurance of safety from these attacks.
• BRIBERY
Bribery is the act of receiving or soliciting of any items or services of
value to influence the actions of a party with public or legal obligations.
This is considered to an unethical form of practicing business and can
have legal repercussions. Firm that want to operate legally should
instruct employees to not involve themselves or the company in such
activities. Companies should avoid doing business in countries where
unstable forms of government exist as it could bring unfair advantages
against domestic business and/or harm the social fabric of the citizens.

3.1
SOCIAL MEDIA

INTRODUCTION
Social media marketing is the use of social media platforms and
websites to promote a product or services. Most of these social medial
platforms have their own built-in data analytics tools, which enable
companies to track the progress, success and engagement of ad
campaigns. companies address a range of stakeholders through social
media marketing including current and potential customers current and
potential employees, journalists, bloggers and the general public, On a
strategic level, social media marketing includes the managements of the
implementation of a marketing campaign, governance, setting the scopes
(e.g. more active or passive use) and the establishment of firm’s desired
social media “culture and tone”. To use social media effectively, firms
should allow customers and internet users to post user-generated content
(e.g., online comments, products view etc.)

PURPOSE AND TACTICS

One of the main purpose of employing social media in marketing as
communication tool that makes the companies accessible to those
interested in their product and makes them visible to those who have no
knowledge of their products. These companies use social media to create
buzz, and learn from target customers. It`s the only form of marketing
that can finger customers at each and every stage of the customer
decision.
International Business through social media has other benefits as well of
top 10 factors that correlate with strong organic search, seven are social
media dependent. This mean that if brand are less or non- active on
social media, they tend to show up less on Google searches. While the
platforms such as Twitter, Facebook, and Google+ have a larger amount
of monthly users, the visual media sharing based mobile platforms,
however, garner a higher interaction rate in comparison and have
registered the fastest growth and have changed the ways in which
customers engage with brand content. Instagram has an interaction rate
of 1.46% with an average of 130 million users monthly as opposed to
twitter, which has a .03% interaction with an average of 210 million
monthly users. Unlike traditional media that are often cost- prohibitive
to many companies.

To this end, companies make use of platforms such as Facebook,

Twitter, You tube and Instagram to reach audience much wider than the
through the use of traditional print, TV or radio advertisement alone at
the fraction of cost, as most social networking sites can be use at little or
no cost (however, some websites charge companies for premium
services). This has changed the ways that companies approach to interact
with customers, as a substantial percentage of customer interaction are
now being carried out over online platforms with media platforms with
much higher visibility. Customers can now post reviews of products and
services, rate customer services, and ask question or voice concern direct
with the companies through social media platforms. Thus social media
marketing used by business in other to build the relationship of trust
with customers. To aim these companies may also hire personal to
specifically handle these social media interactions, who usually report
under the title of online community managers.
Google analytics on social media

While it is not technically a “social media analytics tool,” Google

Analytics (GA) is one of the best ways to track social media campaigns
and even help you measure social ROI. You likely already have GA
setup on your website to monitor and analyze your traffic. However, did
you know you can access and create reports specifically for social media
tracking?
For instance, you can see how much traffic comes to your website from
each social network, or use UTM parameters to track specific social
media campaigns.
• Networks: All
• Price: Free
• Recommended for: Any brand with a website.
Google Analytics Alternatives
While Google Analytics is the standard for analytics (and our personal
recommendation), there are some alternatives:
• Adobe analytics: Adobe analytics is an enterprise solution, primarily
for brands that need advanced segmentation and very specific sets of
data.
• Stat Counter: Stat Counter is on the other end of the spectrum. It is a
very simplified website analytics tool that will show you information on
your traffic including basic info on social media traffic.

3.2
Literature Review

Do not Waste Your Time: six (6) Ways to Be More Efficient on Social
Media

Most marketing strategies begin with a few things: content,

products… and social media. While using social media is not required to
grow a business, it can certainly help in most cases. An
overwhelming 92% of marketers in 2014 reported that they place high
value on social media. In the modern marketing landscape, social media
allows you to reach almost anyone no matter what niche your business
is.
However, just because marketers recognize the importance of social
media does not mean they know how to use it effectively.
Many spend several hours a week on it to get just a little return on
investment (ROI).
Statista sent out a survey to find out how much time per week
marketers spend on social media:

As you can see, more and more marketers are spending large amounts of
time on social media (16+ hours per week) each year.
It is not just marketers either—CEOs do it as well. Another survey found
that 43% of CEOs spend more than 6 hours per week on social media.
CEOs and marketers would not spend this much time on social media,
week after week, year after year, unless it produced results.
However, don’t you think that a CEO might have better things to do than
send out Tweets and “like” posts on Facebook? I do.
I cannot justify spending more than 6 hours a week on social media—the
ROI just is not good enough.
Yet, I still utilize social media to drive traffic to my blog posts and guest
posts. I just do not spend more time than necessary.
In this post, I am going to share with you six different ways you can
save time on social media so that you can focus on more important parts
of your business.
Here we go…
1. Batching always wins
The best marketers, SEOs, entrepreneurs, and writers that I know all
work in batches.
Batching is a “productivity hack” that has been used for many years by
businesses to improve efficiency in a variety of ways.
The premise is simple:
It helps because of these three main reasons:
1. It reduces transition time – Whenever you begin a task, it takes you a
few seconds or minutes to figure out where you stand, what you need to
do, and how you will start. When batching, you only focus on doing one
task, so you eliminate all subsequent transition time wastage.
2. It simplifies things – Switching among many tasks throughout the day
is exhausting. When you know you only have a few main tasks to do in a
day (in larger batches, of course), it is less intimidating.
3. You can work faster – Switching among many tasks means you have
to change your focus multiple times. Every time you switch your focus,
you lose any momentum you have built up. You can never get “in the
zone.”
The one final benefit of batching is that it makes it more difficult to miss
things. Batching allows you to schedule ahead so that you will not forget
to do something important. In this case, it is a social media or blog post.
There are a few ways that you can use batching to save time when it
comes to social media.
Your goal is to build a massive reservoir of social media post ideas that
you can draw from as necessary.
How do you come up with ideas?
Well, it will depend on which social networks you want to focus your
time on (more on that shortly).

2. Narrow your focus and save time

Marketers and entrepreneurs see opportunity
If you see the potential in everything, that is a great trait to have.
The problem that most of these people face (possibly you) is that they
bite off more than they can chew.
They try to tackle every problem and take advantage of every
opportunity but soon find they are burnt out and making no real
progress.
If you spread yourself too thin, you cannot fully take advantage of any
single opportunity. Start with one network, maybe two, and then add
another after a few months if all is well.
4. Create a calendar or face the consequences
Social media is incredibly easy to ignore.
If you miss a few posts here and there, there will not be any immediate
consequence.
However, as I said before, consistency is the most important factor when
it comes to social media success.
A social media calendar (or schedule) is a necessity if you want to use
social media to grow your business.
The calendar will allow you to be consistent, keep on track, and track
your results. Tracking your results is needed if you want to determine
your progress and ROI.
A social media calendar/schedule can be set up in any way you wish—it
is up to you. However, I will show you a few different options to help
you decide what you want yours to look like.
Option 1 – Use a spreadsheet: Spreadsheets are incredibly versatile,
which is why they can work for just about any business.
I have seen some incredibly complicated social media calendar
spreadsheets…

Option 2 – Use Buffer: Buffer is an extremely popular social media tool

that allows you to schedule posts with minimal effort.
Once you have set up an account and are logged in, click on “Schedule.”

Option 3 – Use Hootsuite: Another option is to use Hootsuite, which

used to be the leader in social media tools until Buffer came along.
5. Monitor mentions with tools
Instead of messing around with each individual network, you can use
tools to find when a reader or customer mentions you.
Usually, these are important messages to reply to, so it is a good idea to
monitor them and then address them all in your scheduled sessions for
social media.
Option 1 – Search your brand with Mention.com: This tool is similar to
Google Alerts but focuses on social media.
Once you create an account, you enter a keyword (such as your brand
name), and it will automatically monitor social media sites for any
mentions.
You can set it to send you a daily email of the results:
Option 2 – Have mentions monitored automatically with Hootsuite: One
thing that Hootsuite is still well known for is monitoring mentions.
You can then see a live stream of all your mentions for keywords or
your username in your main Hootsuite dashboard:

6. Templates are the cornerstone of efficiency

A lot of social media work is repetitive.
You will start to see that most top posts look the same and that most of
your posts fall under only a few categories.
A lot of tedious work can be avoided by using templates.
Automate reports with a social media report template: If you have a boss
to report to or regular meetings where you examine social media results,
it is a good idea to create a social media report template.

This template should summarize your activity on social media as well as

the results for a certain time. If you like, the one above, Buffer has
generously shared it free.
4.1
METHOLOGY
The quality and reliability of research study is dependent on the
information collected in a scientific and methodological manner.
Scientific planning of designing of research method is a blue print for
any research study. Therefore, proper time and attention should be given
in designing the plan of research. While proper definition of problem
tells the researcher where he has to go, proper design tells him how he
should go. Selection of methodology for a particular project was made
easy by sorting out a number of alternative approaches, each of them
having its own advantage and disadvantages. Efficient design is that
which ensure that the relevant data were collected accurately.
The researcher has to think about what procedure and techniques should
be adopted in the study. He should arrive at the final choice by seeing
that the methodology chosen for project is indeed the best one, when
compared with others.

RESEARCH DESIGN
Research design is the first and foremost step in methodology adopted
and undertaking research study. It is overall plan for the collection and
analysis of data in the research project. Thus, it is an organized,
systematic approach to be the formulation, implementation and control
of research project.
In fact, a well-planned and well-balanced research design guards against
collection of irrelevant data and achieves the result in the best possible
way.
SAMPLE DESIGN
The universe of study being large, researcher has to resort to sampling
method of data collection. On the basis of a section of the universe
selected in a prescribed manner, one is able to deduce for the universe.
For the sample results to be applicable on the universe, sample should be
adequately chosen so to make it representative and reliable
4.2
DATA COLLECTION METHOD
Data are the bricks with which the researcher has to make a house.
While the quality of research findings depend on data, the adequacy of
appropriate data in turn depends upon proper method of data collection.
A number of methods are at the disposal of the researcher of which one
has to select the most appropriate one for visualizing the research
objective. Thus, he has to see that the method adopted is compatible
with the resources and research study.
Primary Data: Data, which are collected fresh and for the first time and
thus happens to be original in character. Primary data are gathered for
specific purpose.
Secondary data: Data that collected from primary data i.e., they are
already exit somewhere. For the purpose of our study, we collected both
the data.
For the purpose of this study, we collected:
Primary data through
(a) Questionnaire method
(b) Interview method.

FACEBOOK
Facebook pages are for more detailed than twitter account. They allow a
product to provide videos, photos, and longer description as other
followers can comment on the product pages for other to see. Facebook
can link back to the product’s twitter pages as well as send out events
reminder. As of May 2015, 93% of business marketers use Facebook
advertising.

INSTAGRAM
In May 2014, Instagram has over 200 million users. The user
engagement rate of Instagram as was 15 times higher than of Facebook
and 25 times higher than Twitter. According to Scott Galloway, the
founder of L2 and professor marketing at New York University’s stern
school of business, latest studies estimate that 93% of prestige brand
have an active presence on Instagram and include their marketing mix.
When it comes to brand and business, Instagram’s goals is to help the
companies to reach their respective audience through captivating
imagery in a rich, visual environment. Moreover, Instagram provides
platforms where user and company can communicate publicly and
directly, making itself an ideal platform for companies to connect with
their current and potential customers.

5.1
QUESTIONAIRE

The survey is been conducted for the research regarding international

business through social media (your participation will greatly help to
obtain the result)

Name_______________________________

Gender: male Female

1. How long have you been using social media?

o 1-2 years
o 2-3 years
o 3-4 years
o 4-5 years
o 5 years +

2. Which of the following social media platform do you use?

o Facebook
o Twitter
o YouTube
o LinkedIn
o Myspace
o Instagram
Other (please specify)

3. For what purpose do you use social media?

(Select as many choices as you like)

o To advertise products or services

o To gain feedback from customers
o To increase brand awareness
o To analyze the competition
o For business to business purpose e.g. LinkedIn
o To engage (in conversation)
Other (please specify)

4. How useful do you think that social media has been for you?

o Very useful
o Kind of useful
o Don’t know
o Not very useful
o useless
5. How many times has social media helped you to make a market
specific product or service?

o0
o1
o2
o3
o4
o5
o 5+