University of Turbat

Submitted by: Mehboob

Submitted to: Mr. Malik Dad
Course: International Business
Department: Management Sciences
Program: BBA
Semester: 6th
Session: 2018-2021
Date:10/01/2021
Q:1 What factors have contributed to the growth of globalization in recent
decades?
There are some factors which have contributed the growth of globalization in
recent decades.
We know that, in recent decades there are efficient means of production that
have become rational in recent times.
1: Rise in and application of technology
Like the new products treated with mobile communication devices or new
technology like Using artificial intelligence as well as the new application of
these old products. One reason is population growth and the second is increased
productivity which take less time to produce the same thing and the risings
productivity also means that average people can buy more like new product.

2: Liberalization of cross border trade and resource movement:

The country that protect their own industries by restricting the entry and exit of
resource like goods and services, workers, capitals, but in recent decades’
growth of globalization country liberal the border for trades and many
governments have decrease such type of restriction for three reasons:
 1: Because their citizens need a greater variety of goods and services and
at a lower price.
 2: Competition spurs domestic producers become more efficient.
 3: They confidence to make other countries to lower their barriers in turn.

3: Development of services that support IB

Government and firms have developed services that help global business like,
bank credits, and arrangement that convert one currency into another currency
which is currency exchange, insurances which cover risks.

4: Growth in consumer pressure:

One of the factor is consumer pressure which Today’s most consumers are
familiar with the products and services existing in other countries but they want
better quality and lower prices offered to them. On behalf of these companies
must spend more on research and development and go around the world
innovations and products and can sell them to discerning consumers.
5: Increase in global competition
Increasing global competition is changing the environment that most companies
face today. As trade barriers decline and transaction costs decline, new global
competitors enter previously more remote domestic markets. In response to this
increased competitive pressure, local businesses are being pushed to
performance through innovation and adoption of product and process
improvements. Increase in competitive pressures can influence companies to
buy or sell abroad.
6: Changes in political situations and government policies:
The factors that contributed to growth globalization is that change in political
situations and government policies, political change sometime open new
frontiers such as diplomatic relations between the United Stated and Cuba. Its
mean that government can support such type of program such as, improvement
of airports, and seaport facilities to make efficient for delivering goods
internationally.
7: Expansion of cross national cooperation:
The government have arisen to understand that their own importance can be
addressed over international cooperation by means of treaties, agreement, and
consultation Its mean that country have to expand their cooperation with
another country such as agreements, treaties. The policies are for three reasons:
To gain an advantage.
And when a problem comes that one country can’t solve that problem alone.
To deal with parts of concern that untruth external the land of any nation.

Q2 what are the criticisms of globalization?

Globalization is a complex and controversial topic. Here is an overview of some
of the major costs related with the globalization.
One of the criticism with globalization is that they use of non-renewable
resources has increased. It has also added to the increase in pollution and global
warming. Companies can also outsource production where environmental
standards are less stringent. However, one could maintain that the problem is
not so much globalization as the failure to set satisfactory environmental
standards.
Also another criticism of globalization is threat to national sovereignty by going
to globalization we will lose to act locally or forget our cultural in the name of
free markets and with the ability of a better standard of living, countries give up
their civil and public powers to international organizations also Globalization
has been one of the main causes of the increase in inequality in many countries 
Q3 why companies engage in IB?
The Companies go to international business for many reasons, but the goal is
often business growth, sales expansion, resource acquisition and risk
minimization. Whether a company appoints international employees or go to
new markets abroad, an international plan can help expand and grow of a
company.

1. To expand Sales
The number of consumers increases and their standard of living also increases,
which has led to an increase in purchasing power and demand in every country.
In relation to consumers and demand around the world, an exciting world of
opportunity is opening up. This means higher sales and higher profits due to the
economies of scale that why we engage in ib
2. To acquire Resources
Manufacturers and distributors are looking for external capital, technology and
information that they can use at home to decrease costs. Sometimes companies
operate abroad to purchase something that is not willingly available in the home
country in order to expand the cost and quality of the product. It is also possible
that fixing the industry in another country is cheaper than transferring the raw
material from another country to the home country.
3. Minimize Risk
Businesses look to foreign markets to minimize changes in sales and profits
resulting from the business cycle. Recession and expansions, which occur
another way in different countries. For example, there would be a recession in a
country where sales are growing very slowly, on the other hand, there would be
a developing country where there is a high demand for your products due to the
expansion of its markets.
Q:4 What are the different entry modes of IB? Elaborate your answers
discussing the advantages and disadvantages alongside with relevant
examples.
Entry Modes;
Once a business decides to enter a foreign market, the question arises as to what
is the best way entry in a foreign market. Companies can use five different
modes to enter foreign markets: export, turnkey projects, licensing, franchising,
creation of joint ventures.
EXPORTING;
Export is defined as the sale of products and services in foreign countries that
are bought or manufactured in the country of beginning. Importing is the flip
side of exporting. Importing involves buying goods and services from foreign
sources and bringing them back to the country of origin.
Advantage
The advantage of exporting is that the company is able to understand position
and skill curve economies.
Disadvantage
The disadvantage is that there is high shipping cost and also trade obstacles.
Example;
example of exporting the rice being shipped from Pakistan to be sold in many
other countries.
TURNKEY PROJECTS;
The turnkey project is one of the ways to enter a foreign market. In a turnkey
project, the contractor agrees to manage all aspects of the project from design,
construction and training of people. It means that there is a contract and
contractor agrees to handle each and every thing about project for a foreign
client.
These are very common in industries that use complex production technologies,
such as treatments, metal refining, petroleum refining, etc.
Advantage
The advantage is that the capability to make returns from development
technology skills in
countries.

Disadvantages
The foreign firm entering the host country with turnkey projects lack of
presence long term in market.
Example
The example of some countries like Saudi Arabia, Iran, Iraq. Supposing these
Middle Eastern countries have rich oil but lack oil refining technology, then
they can join a foreign company that is expert in such technology.
LICENSING
The licensing is a trade agreement in which one company allows another
company to manufacture its product for a particular fee. Licensing typically
involves allowing another company to use patents, trademarks, copyrights,
designs, in return for a percentage of revenue or a royalty.
Advantage
The advantage of licensing is that there is little improvement costs and risk.

Disadvantage
The licensing disadvantage has to pay fee or royalty to the licensor.
Example
 A clothing manufacturer company like is Bareeze licensing its designs and
brand in a certain country to a local company.
Franchising
The Franchising is a contract in which one of the parties grants certain rights
and powers to the another party.
A promised agreement is produced between the franchisor and the franchisee.
The franchisor permits the franchisee to sell its products, goods and services
and to grant the right to use its brand and trade name. In return, they must pay a
onetime fee to franchisor.
Advantage
The Franchising also supports in building a brand name and getting more
customers.
Disadvantage
the disadvantage is that they always have to pay royalty to the franchisor or they
may even have to share profits with the franchisor.
Example 
The fast food restaurants are the examples of the franchising.
Such as KFC, Starbucks, Papa John's, Burger King.

Joint venture:
When two or more then two companies come and join together for specific
purpose or create a new company or new project together it is called that joint
venture.
Advantage
Joint venture offers a huge capital of funds between two party.
The risk is shared between both partners.

Disadvantage
Decision making is slow down due to the contribution of a number of partners.
Example
The example of a joint venture is the joint venture between UBER company and
Volvo company. The objective of the joint venture was to produce driverless
cars.

Q5. Discuss the seven main instruments of trade policy.

There are seven trade policy instruments: tariffs, subsidies, import quotas,
voluntary export restrictions, local content requirements, administrative
policies, and anti-dumping duties.
1 Tariff:
The tariff is a tax imposed by a government on the import or export of goods. In
addition to being a source of public revenue, import duties can also be a form of
foreign trade regulation and a policy that taxes foreign products to encourage or
protect domestic industry. Tariffs are among the most widely used instruments
of protection, along with import and export quotas.
The tariffs are divided into two types. Specific tariffs are levied as a fixed tax
on each unit of an imported good and ad valorem tariffs are collected in amount
to the value of the imported good.
 In most cases, tariffs are placed on imports to protect domestic producers from
The important thing to understand about an import tariff is who suffers and who
The government gains, because the tariff increases government revenues.

2 SUBSIDIES:
The subsidies are method of financial aid or support that is extended to an
economic part in overall with the aim of helping economic and social policy.
While generally extended by the government, the term grant can refer to any
type of support. Grants come in many forms, including: direct (cash grants,
interest-free loans) and indirect (tax breaks, insurance, low-interest loans, rental
payments) Subsidies help domestic producers in two ways: (1) competing
against foreign imports and (2) gaining export markets.
A subsidy is a government fee to a domestic producer.
By depressing production costs, subsidies help domestic producers $300 billion
on subsidies, $250 billion of which was spent by 21 developed nations. In mid-
2009 some developed nations gave $45 billion in subsidies to their auto
inefficient domestic producers with farm subsidies.
3 import quota:
The import quota is a type of trade restraint that sets a physical maximum
amount of a goods that can be imported into a country during a specified period.
Quotas, like other trade restrictions, are generally used for the benefit of
producers of a goods in economy. The restriction is generally enforced by
issuing import licenses to a
Group of individuals or firms. The example is, the United States has a quota on
cheese imports. The only companies allowed to import cheese are secure
trading companies, each to whom the right to import a maximum of pounds of
cheese each year.

4 Voluntary export restraints:

Voluntary Export Restriction (VER) is a limit levied by the government on the
amount of certain types of goods that can be exported to a particular country
during a specific period of time. They are sometimes called export visas. Vers
normally arise when industries seek to protect themselves against competing
imports from particular countries.
(VER) is a quota on trade imposed by the exporting country, usually at the VER
limited Japanese imports to no more than 1.68 million vehicles per year.

As with tariffs and subsidies, both import quotas and vers benefit domestic
producers An import quota or VER always increases the domestic price of an
imported When imports are limited to a low percentage of the market by VER,
above increased the price of the limited supply of Japanese imports.
5 LOCAL CONTENT REQUIREMENTS:
A local content requirement must be a specific fraction of a good be produced
locally. The requirement can be expressed in physical terms the example is that
75% of the components of this product must be manufactured locally or for
value conditions, 75 percent worth of this product must be made locally. Local
content Regulations have been widely used by developing countries to reorient
their manufacture. Basis for simple assembly of products whose parts are
manufactured elsewhere in the local manufacture of spare parts. They have also
been used in countries to try to protect local jobs and industry from foreign
competition.
6 ADMINISTRATIVE POLICIES:
The trade policy instruments, the governments of all kinds use administrative
policies to restrict imports and stimulate exports. Administrative trade policies
are administrative rules designed to make it difficult matter to enter a country.
The government uses administrative trade policies to stimulate exports and
restrict imports by reducing the indirect tax to a certain level in order to lower
the cost of production and the price of products.
7 Antidumping Duties:
An anti-dumping duty is a protective fee that a domestic government charges on
foreign imports that it considers to be less than fair market value. Dumping is a
process by which a company exports a product at a price significantly lower
than the price it normally charges in its domestic market. Anti-dumping policies
are designed to punish foreign companies for dumping.
The final goal is to keep domestic producers from unfair external competition.
Although anti-dumping policies differ rather from country to country, most
similar to those used in the United States.
Q6. Write down notes on the following international organizations;
IMF
The international monetary fund (IMF) helps global economic stability and the
purpose of the Fund is to support international monetary cooperation, it also
facilitates the expansion and balanced growth of international trade and help to
reduce global poverty. The IMF also gives advice on how to achieves economic
stability, the IMF is running by 189 member of countries
The IMF was established on 1944 in united nations on the recommendations of
Bretton Woods Conference.
GATT
The General Agreement on Tariffs and Trade (GATT) which was signed on
October 30, 1947 by 23 countries, which was a legal agreement that reduced
barriers to international trade by eliminating tariffs, quotas and subsidies while
protecting important rules. The most important principle of the GATT is that of
trade without discrimination, in which each member country opens its markets
in the same way to all the others. The main purpose of GATT was to reduce
harmful trade protectionism The GATT was planned to increase economic
recovery after World War II through rebuilding and liberalizing global trade.
World bank
The World Bank is an international financial institution or like a cooperative
which provides loans and grants to low-income countries that pursue
investment projects that they could not otherwise finance. The World Bank was
started after World War II when many European countries were physically and
financially destroyed. The World Bank consists of 189 member countries. It
was created to lend money with no interest rate so that these countries could
rebuild themselves and eventually pay the bank. Today, the World Bank gives
loans to countries around the world working to eliminate poverty. The Bank
also provides loans to non-governmental organizations or ngos that provide
help in low-income and developing countries. Since 1947, the Bank has
financed more than 12,000 development projects. In line with the United
Nations Sustainable Development Goals, the World Bank aims to end extreme
poverty and increase the incomes of the poorest 40% of all countries by 2030.
WTO
The World Trade Organization (WTO) is the only worldwide organization at
the global level that deals with the rules of trade between nations. In the center
are the World Trade Organization agreements, which were negotiated and
signed by most of the trading countries in the world and approved in their
parliaments. The aim is to help producers of goods and services, exporters and
importers carry out their activities. The World Trade Organization, the WTO, is
the international organization whose main objective is to open up trade for the
benefit of all.
There are many ways of thinking about the World Trade Organization. It is a
trade opening organization. It is a medium that governments can discuss trade
agreements. It is a place for them to resolve business disputes. It operates a
system of business rules. The WTO is a place where member governments try
to solve the trade problems they face.