KOLEJ PROFESIONAL MARA BANDAR MELAKA

Exercise 19/11/2021

1. Define International Business with example.

International business is all commercial transactions between 2 or more

countries. It includes sales, investments, transportations and international trade.

This international business involves transactions across international borders

where business is conducted between countries. For example For example,

Seagate supplies computer chips to manufacturers of computers to complete

the process of manufacturing computers.

2. Identify the participant of International Business with example each of them.

-country

Country is divided into the developed countries and developing countries. For

example for developed countries are such as Japan and South Korea while

developing countries are such as India.

3. Explain four risks and 4 challenges in International Business.

Risk in International business

-cross cultural risk. It refers to situation or event where misinterpretation arises

as a consequence from differences in human values. It can be represented

through differences in languages, cultures, religions, mind sets and lifestyle

-Country risk. It refers to potentially adverse effects on company operations and

profitability cause by developments in political, legal and economic environment

in a foreign country.

-Currency Risk. It refers to the risk of adverse fluctuations in exchange rates-

economic exposure, translation exposure and transaction exposure. This risk

can be the cause of high cost of making business internationally.

-Commercial risk. It refers to firm’s potential loss or failure from inefficient

management or weak business strategies, approaches and practices especially

in marketing the business through commercial.

Challenges in International business.

-natural resources terrorism, climate and location that effect on the firms of the

businessoperations and operating costs and maybe effect the countries foreign

investment.

-Culture, legal nationalizations and different political system in other countries

-firm strategy, price, cost effectiveness, firm sizes and competitors.

4. Discuss the meaning of globalization.

It refers to the broadening set of interdependent relationships among people

from different parts of a world that happens to be divided into nations. It is an

accelerated interdependence of economic and business activities across

national boundaries.

5. Explain 2 components of globalization with example.

-Globalization of markets

Refers to the integration of markets from various region into a single global

market. For example, Coca Cola, Mc Donald’s and KFC are operated at various

regions.

-Globalizations of production. It refers to dispersing operations to other parts of

the world to reduce cost and improve quality. The purpose of this component is

to compete more effectively by offering a product with good quality and lower

cost. For example, Multinational Company such as Honda.