ET TTS ye i ——$—$———— Page No. Gateway Institute of Engineering & Technology [Introduction s— ; International — Busintrs Aufera to the Dace og Gorda, Beavices , Technology , Capitel and Eno ledge Qcr#AS = nakenal = Rordera and et a ¥bbal ov tranAnational Alale: To Conduct budinesd overscan , ra whee Compananis need to A eprrade national marke into ee Mavkebplact: i» from ang Rind of Biginaeeee oL market Mulbinatterral Ente rpersea ban Ll Prom Conaumey g weds to MG ohne manufactur ; a Company Can &¢come Intarttiogal Bi sinerd* a ‘ Defina tions - cai oe Frnt rd D-Danep oF Qu Commerc Auch ( | Pandhertatiena +h BusinePage No.._2 ‘Gateway Insite of Engneeing & Teeho Arteqation of Doméshe economy ist hap ey + Opening up of tht economy to foreign Capital , Foxeign technology ancl foreign Comperhien Free word Dade with Uberelcee Approsd towards exports and smporta. Elimination bf arts anc Expanaien puttination: Chavacteviated Re] (em boenenta fur Gace qty sola anol Sebvices fect movemenr Of Copatel o¢ dahour’ movement oy feet ge z ‘ Tnternation ef Fade Technologeat Colla beni | joint‘uateway instmute oF Engineering & Mergera # Acguinti ond Strategic ‘Alliance oa international Manag ementi— InttrnaWaaf Sincahe Businesd verdud Businesr - He m ona Tadernational meanagemen fc 64 Busintsr operaliena 9 dio ong en isatien devi maa kets and operaung in more han oA @PC oun T+ Akeguixe Aanow lech ancl Akille beyond normed business Expectatieng , dueh 24 familiarity rE ‘ t and Cobapenhue conditienA+ The i mnment + The Capabil Long ana managing Local marke Atgot and feranael envire ull CWC Aranhac to do acxo0s boaders- Domes tic Business and Tnternational Qudinesd Meaning a Domtohe Business -— Pao a ; b oundaviEcono ric| Policces’ ThE ig no problem bh atbanging @ paymento att madein 4mmd of olomestic Catron VOL OU EConomiL eae Ltrade axe uniform within the Counby Like fical Polley , Mone Policy y in ial Polieg pore gn Dnviniment ete an um eagith'in the coun : 4 ey Page No. Gateway Institute of Engineering & Technology Didperenh CUrkentied Ae ved 7 different” teuntrics: So the aA el of anes for ie aunien artista: Purbhey an Exchonge rate 14 af ways uctuating which also 1s to the “Problem of ting A cceunta: « Econom Policies vassually event hs oud dghins « she 2cane ic pyres: Sm ot one County awe not applicable in the other nationo ~ So We international budinedd ad hes ao Unolexa teand economic politica of alt like Coun prea where i+ ing 4o extente ita budiniedag ache te Problem, are in“af Rak degals political Aydtem Hag nite it hoa Leaver fuse a goods ant bold within + 94 mvolves £000 Fime Led Ad ge a counhy Heeavellin of pacl debts aa enor + analy Ceedit worthinss withm & pation - gt clobelygpot invek HuAK of Pec im foverg nn Exchary date within “ane Counhy th LiRe sole of yoo Act: Condumtr Protection environment Leqealations HL unigor™| international Budinesd-Oee Page No. Gateway Iatuteof Engineering & TecbnolOBY Traolihors git’ sig nipecartty Linings , alis Lhirgs, fasta papers ef Consumers’ The analys in of 20c0 cll of varoud nations > t dappt cents OSA ot te mre AuUask aA 9 cola yout Aold Alxord pre boundaries ey tho nation’ Vidi nvelued mare dravelli Mims Poli Fi cotassk Exchars ak , se anouts ‘sky MOAR as tt 7 4 analyst peed t —worthinead of Lubtomeya acroad The Would * The tgs fu otifp event in Vasu | a) Tax act, Foreign Invesh ete form ack, Conkact Act Fncome wro, UNCTADD vo bility of Factor® 0G Procluetioh dluty anol €xpoxt oly Factor of Pu oobuelsen dike Labour and Capital have Cady oo bility. within the bounelayita within +he natien -Th axe n0 slavity ( import yp rarrify barriers } baxyiers On movement Page No.: Factor of Produelte Leas mobile acxeds nateond + In some Caner, “Theat a 1 es My immobile oli +0 cteget incon mee , dang wage There ae varios Hrwaige and nen teenie of good fiom ame Coun bg 4o Other Coun by «Theat ba Gateway Institute of Engineering & Technology“= aa more Fisk a8 goods are sold 4 0 thina | It he 7 itas lesser risk as goodsare soit witime, [boundaries of the ration. It involves the] 5. Magaitude of J untry. It involves less oC" sier t0| traveling time, politi’ Tk. Exchange tate i aa Jess risk of bad debls A Oe vin a|sea-route risk, more credit rik as itis analyee credit. worthiness ek offanalee creditworthiness of customer nation. It does r i : rea s in foreign exchange rate. , Across | Paste. Se iecainiccs are| The legisiations regulating itemation ae 6 Legal and Within the coun sieg of Goods Act,/ere different In, vetoGs Sena Siam rouzeri pa Prot tion Act, Contract Act, international formar 0, UNCTA Ci mer Protection Se od ; Pao Consi"“Tax Act, foreign investment] IMF, etc. and Regio ic Crag are uniform within India. tc. pes within a Understanding these legislations nation is easier. SAARC, EU, SAFTA, NAFTA, etc. also alfeg various transactions of international busi So understanding legislative set up affecting international_business is very conpke, fon like labour and lity of Factors of production like # nae capital have easy mobility within the of Production _ | boundaries of the nation. Factors of production are less mobile acros nations. In some cases, these may be immobile due to legal hindrance, long distance. language hurdle, patriotism, customs, traditions etc. Barriers non-tariff barriers (quota, licence). So mobility of goods within the country from one state to other state is easy. 9. Procedural Jit involves less documentation and Formalities procedural formalities. Executing the transactions related to domestic business is not very complex task. 8. Tariff and TWithin the nation, there are no tariff| There are various tariff and non-tariff barriers on| Non-Tariff {import duty and export duty) and|movement of goods from one country to other country, These barriers hinder the movement of goods from one nation to other nation. It involves very complex procedural formalities and documentation. The services of specialised] staff are required to comply with official formalities. It increases the transaction cost of international business. 10. Language Indomestic business, language barrier is Problem not a serious problem. Although there may be various regional languages, but still because of common national language, the persons engaged in domestic trade can communicate with The level of competition is less as business units of one nation only compete with each other. domestic traders get less in comparison to exporters government. Language problem is very serious across the nations. More than 10,000 languages are spoken in the world. Even in case of same| language, the way of pronunciation is different in different nations. Services off translator/interpreter are required. The level of competition is very high as busines otis oma ovec the Neck coven er. Governmentalways gives more concessions and, incentives to exporters so as to promote exports.Intemational Business— An Inroluction 3 ality Qualiy standards and norms are same] Quality Wand 15 Qualidrds | wthinanation. Forexample,in Ina for] diferentnatons Scien epee will have to comply wit business uit 00d quality of product. But ISI mark is such nations whore ne ae fof little significance in international | product as, ‘marketing. 16. Market The characteristics of market viz.| The characterises of market vay Giaibx Characteristics |channels of distribution, advertising, | network, advertising media, personal val sales promotion, personal selling, etc.,| tools of sales promotion, etc. across the worl are more or less similar within domestic | are significantly different, : market. 17. Transportation [Rail and Road transport modes are |Sea-transportls the most commonly used mode generally used as the distance is less. of transport as the distance peda Forsea transport, container packaging is used. @ 11. Major Decisions in International Business As the tariff and non-tariff barriers in the path of international business are reducing, and the means of transportation and communication are improving significantly, so the scope of international business is expanding. A business unit which plans to go for international business has to take following major decisions. electric appliances, ISI mark reflects (1) International Marketing Decision: Entry in international business involves more risk in comparison to domestic business. It isa very strategic decision. Before deciding that the business unit should go for international business or not, in-depth analysis of strengths and weaknesses of business unit itself; and opportunities and threats in the foreign market (where the business unit intends to enter) should be conducted. The business unit may have sufficient production capacity to capture overseas marketing opportunities. Considering the available financial resources, human resources, managerial calibre, marketing capabilities, and the product quality, business unit may take decision to expand its market area beyond the national boundaries. Country Selection Decision: The global market area is very wide. Global business unit has to take decision that in which country it should take entry for selling the products and in which country it should locate its production base to serve different markets. Due to limited resources, trade barriers, restriction on foreign direct investment, political risk, law and order situation, etc., itis not possible for the global business unit to operate in markets of all nations. If in any country tariff and non-tariff barriers are very strict or it has imposed restrictions on inflow of foreign direct investment or the market ‘of that nation is risky due to political or other reasons, then entry into such country is very difficult and is not profitable. Some foreign ‘markets may not have good potential. Entry in such foreign markets may resultin huge losses. country selection is a very strategic decision. oe Decision: The decision regarding selection of mode of international ‘ as thas too much bearing onthe future grow ofthe bet business | popular modes of entry or conducting business territ rn ce eiicheh vertices nite sept! In investment mode, business is expanded to other nations ct investment by setting up subsidiaries, through mergers,