University of Cebu- Banilad

College of Business and Accountancy

Gov. Cuenco Avenue Banilad Cebu City

BA 423 – INTERNATIONAL BUSINESS

AND TRADE

Business Report for

Chapter 1: Introduction of International Business

by:

Anthony Mantuhac BS-Accountancy 2ND year

Presented to:

Ms. Amabella Grace N. Siaton, MBA

BA 423 Instructor

June 20, 2020

 Part I. Costs of Globalization
Challenge Explanation
One of the costs of globalization that
challenge our country is the threats to our
national sovereignty. In which, it
gradually eradicate our own country’s
supreme power and freedom from
external control because we tend to focus
on, internationally. We tend to
accommodate globally before act locally
that makes our national sovereignty
Threats to degraded and to be its globalization
national threats.
sovereignty
Critics of globalization claim:
 Countries’ sovereignty is
diminished
 The resultant growth hurts the
environment
 Some people lose both relatively
and absolutely
 Greater insecurity increases stress
Possible Solution
In order to make our threats not to
have its blow up again knowing that
globalization also has a great impact
upon to the contribution for the
development and progress of our
economy. Why we should act or
develop first our own, locally before
going through, globally. So that we
can attain improvements and
saturation.
Because there’s a slogan stated,
“Think globally, act locally.” In
essence, it means that local interest
and objectives should be
accommodated before global ones.
Thus, we should prioritized our own
country because in the end we still be
the one will be affected either good or
bad. Because this is for the goodness
and the development

Globalization is definitely affects not just

For my own perspective, nothing will
our economy socially but also
happen something bad that can harm
environmentally. It brings out
us inadequately if we people are
environmental stress due to the
responsible enough to our doings. So
increasing damages of natural resources.
in order for this environmental stress
According to one argument, growth
to cope with. We need not just
consumes more nonrenewable natural
focusing on profitability and
resources and increases environmental
enhancements only but considering its
damage, despoliation through toxic
environmental factors. Knowing that
Environmental runoffs into rivers and oceans, air
global competition is increasingly high
Stress pollution from factory and vehicle
today, we should seek resource-saving
emissions, and deforestation that can
and eco-friendly technologies, such as
affect weather and climate.
automobiles that uses less gas and
Furthermore, globalization opponents
emit fewer pollutants. Consider the
contend that by buying from more distant
effect of global pressure on Brazil to
locations, the added transportation
help protect the world’s climate by
increases the carbon footprint, which
curtailing logging activity in the
refers to the total set of greenhouse gases
Amazon region. Indeed, let’s nurture
emitted that makes our environmental
our environment.
occurs.

Source: International Business: Environments and Operations (Fifth Edition) by 2

John D. Daniels, Lee H. Radebaugh and Daniel P. Sullivran.
 Challenge Explanation
In measuring economic well-being, we
not only look at our absolute situations
but also compare ourselves to others. We
generally don’t find our economic status
satisfactory unless we’re doing better and
keeping up with others.
strategic planning on how to deal with
Income Inequality. By various
measurements, income inequality, with
some notable exceptions, has been
growing both among and within a
number of countries. Critics claim that
globalization has affected this disparity
by helping to develop a global superstar
system, creating access to a greater
supply of low-cost labor, and developing
competition that leads to winners and
losers.
Growing
Personal Stress. Certain repercussions
Income
of globalization can’t be measured in
Inequality and
strictly economic terms. What about the
personal stress
stress imposed on the people whose
relative economic and social status
suffers, or those who fear the loss of their Development (OECD), through new
jobs? There is some evidence that the
growth in globalization goes hand in
hand not only with increased insecurity
about job and social status but also with
costly social unrest. Further, although
few of the world’s problems are brand
new, we may worry about them more
now because globalized communications
bring exotic sagas of misery into living recommendations to improve access to
rooms everywhere.
to benefit from rapid digitalization and
Possible Solution
The possible solution for this kind of
challenges which are growing income
inequality and personal stress to be
able to lessen it and to distribute
income equally and lessen personal
stress is to have a proper alignment of
income and personal stress across
borders. We essentially need to
develop and formulate on how to deal
competitive advantage because
knowing that the competition on the
foreign market today is increasingly
high that’s why income equality and
personal stress occurs
Moreover, the company should work
on improving multilateral standards
and agreements to make globalization
fairer and more inclusive at ensuring
openness, accountability and
transparency in cross-border capital
flow policies.
According to Organization for
Economic Cooperation and
approaches to Economic Challenges -
OLD (NAEC) and initiatives, the
OECD is revising its models and
analysis to promote people centered
growth. In line with the inclusive
growth objectives of the 13th Five
Year Plan, our flagship Economic
Surveys of China include targeted
high-quality education in rural areas
and equip citizens with the right skills
technological change.

Source: International Business: Environments and Operations (Fifth Edition) by 3

John D. Daniels, Lee H. Radebaugh and Daniel P. Sullivran.
Part II. Firms Go Internationally

REASON 1: EXPANDING SALES

- Definition:
One of the aspects that our firm needs to develop, internationally, is
expanding sales. The company’s sales depend on the desire and ability of
consumers to buy its goods or services. Obviously, there are more potential
consumers in the world than found in any single country. Now, higher sales
ordinarily create value, but only if the costs of making the additional sales don’t
increase disproportionately. Moreover, the primarily objectives why a business go
internationally commonly increase its sales because of having an aggressive
expansion to go further to global considering its consumer because they’re the one
why your odds of survival in the foreign market is increasing.
- The expected business operation of the firm under this stage:
The expected business operations of the company/firm, under expanding
sales are commonly large companies. But bear in mind that international business
is not the purview only of large companies. In the United States, 97 percent of
exporters are small and mid-sized firms (SMMs), which account for about a third
of U.S. direct export value. Further, many sell products to large companies, which
install them in finished products slated for sale abroad.
- The expected business challenges:
So, one of the expected business challenges, if you go through
internationally, is having an increasing competition in the foreign market.
Knowing that today, businesses glows up because of not having a costumer’s
satisfaction of a certain products whether goods or services. This challenges the
companies to have a strategic planning in order to meet its costumer satisfactory,
not just its profitability. Recall, for instance, the opening case. Televising sports
competitions to multiple countries generates advertising revenue in excess of the
increased transmission costs. In fact, additional sales from abroad may enable a
company to reduce its per-unit costs by covering its fixed costs, say, up-front
research costs, over a larger number of sales. Because of lower unit costs, it can
boost sales even more.

Source: International Business: Environments and Operations (Fifth Edition) by 4

John D. Daniels, Lee H. Radebaugh and Daniel P. Sullivran.
 - The expected business opportunities:
Aside from having its challenges, there were a lot of opportunities also to
come up on going through to global market. One of the expected business
opportunities of expanding sales is that it increasingly having an aggressive
expansion faster. Developing and pursuing international sales for be able to have
an aggressive expansion of sales usually increases the potential market and
potential profits. There are also significant cost savings that can be associated
with going internationally. The company may want to reduce costs by relocating
closer to a supplier or benefit from lower production costs by expanding
operations to another country, It may open up new investment opportunities,
lower cost of acquiring costumers and build up loyalty across international
markets, revenue strengthens and escalates as well.
- Example firm/business:
So increased sales are a major motive for expanding into international
markets, and many of the world’s largest companies such as Volkswagen
(Germany), Ericsson (Sweden), IBM (United States), Michelin (France), Nestlé
(Switzerland), and Sony (Japan), derive more than half their sales outside their
home countries.

REASON 2: ACQUIRING RESOURCES

- Definition:
Acquiring resources results inadequate of resources to produce,
domestically that’s why going international to have connection and seek for
resources that needed for the production or for the company. In other words,
producers and distributors seek out products, services, resources, and components
from foreign countries sometimes because domestic supplies are inadequate. It
can definitely build up strong connections and relationship across boarders
through acquiring resources of each other. This may mean acquiring a resource
that cuts costs, such as Rawlings’s reliance on labor in Costa Rica a country that,
hardly plays baseball, to produce baseballs.

Source: International Business: Environments and Operations (Fifth Edition) by 5

John D. Daniels, Lee H. Radebaugh and Daniel P. Sullivran.
 - The expected business operation of the firm under this stage:
Commonly, the expected business operation of the firm under
acquiring resources is manufactures,. Because in order for a product to
produce, they seek out first their resources needed for the production of their
products and acquire resources, globally. Most automobile manufacturers, for
example, hire design companies in northern Italy to help with styling. Further,
the diversity of employees and operations bring companies new perspectives.
- The expected business challenges:
Mostly, one of the expected business challenge for the company to go
internationally to acquire resources is local competition. Nowadays, we can
see that the competition of the foreign market is high that’s why it challenge
the company to have a strategic management to acquire resources to have an
effective and efficient production and sales. Also, the company challenge to
have enhancements to acquire good quality resources so that the produce will
be high quality also because it’s not easy to persuade a foreign costumer to
trust your brand what a similar product is made in their home country.
- The expected business opportunities:
Sometimes firms gain competitive advantage by improving product
quality or differentiating their products from those of competitors; in both
cases, they’re potentially increasing market share and profits. Acquiring
resources internationally may give companies lower costs, new or better
products and additional operating knowledge. Moreover, operating in
international markets also gives the company access to a larger and more
diversified talent pool. It enhances connections to country to country with a
broader consumer base. The company can also structure global work teams
and partnership in a way that allows for synergy in building a global brand.
- Example firm/business:
Many companies establish foreign R&D facilities to tap additional
scientific resources. They also learn while operating abroad, and they acquire
product knowledge for entering new markets at home, such as what PepsiCo
is doing in order to enter the fast-growth U.S. yogurt market.

Source: International Business: Environments and Operations (Fifth Edition) by 6

John D. Daniels, Lee H. Radebaugh and Daniel P. Sullivran.
Source: International Business: Environments and Operations (Fifth Edition) by 7
John D. Daniels, Lee H. Radebaugh and Daniel P. Sullivran.