UNIVERSIDAD DE MANILA

(Former City College of Manila)

One Mehan Gardens, Manila Philippines
Tel. No. 852-228-56

GROUP 1 WRITTEN REPORT

I. INTERNATIONAL BUSINESS AND TRADE

A. Introduction
– Alvarez, Kyle Nathaniel Sabado

B. History of International Business

– Campos, Casey Chile Samson

C. Theories of International Business

– Daizon, Ismael Arboleda

D. International Product Cycle Theory

– Arcan, Nachelle Pearl Napusi

E. Methods of Engagement
– Bautista, Jefferlyn Rose

F. Conclusion
– Adaya, Ellaine Joyce Baniqued and Catre, Jeremie John Varela

II. MORE ABOUT INTERNATIONAL BUSINESS

A. What is International Business & Trade

– Cayabyab, Jayme Diama

B. What is the purpose of International Trade? International Business?

– Cuaterno, Mecaella Batuigas

C. Advantage of International Business

– Calalo, Ricardo Azares

D. What is the most important cause of International Trade?

– Arcinue, Brianne Nicole Fransisco

E. Importance of International Business and Trade

– Carpio, Ma. Alleah June Ang

F. Conclusion
– Dan-uya, Sheryl Joyce Hernandez and Asis, Anabelle
 UNIVERSIDAD DE MANILA
(Former City College of Manila)
One Mehan Gardens, Manila Philippines
Tel. No. 852-228-56

I. INTERNATIONAL BUSINESS AND TRADE

A.Introduction
Alvarez, Kyle Nathaniel Sabado

International business and trade refer to the exchange of goods, services, and ideas
between individuals, firms, and governments across national borders. In today's
globalized economy, international business and trade have become increasingly
important for companies seeking to expand their customer base, reduce costs, and
access new markets. This report provides an overview of the key concepts and
factors involved in international business and trade, as well as the benefits and
challenges associated with this practice.
Key Concepts:
International business and trade involve several key concepts that businesses need
to understand to succeed in the global marketplace. These concepts include:
International Trade: the exchange of goods and services between countries,
including exports and imports.
Comparative Advantage: the theory that countries should specialize in producing
goods and services in which they have a lower opportunity cost than other
countries.
Protectionism: policies aimed at restricting imports and promoting domestic
industries through tariffs, quotas, and other trade barriers.
Globalization: the trend of increasing interconnectedness and interdependence of
economies, societies, and cultures around the world.
Foreign Direct Investment (FDI): investments made by companies in foreign
countries, typically involving the acquisition or establishment of a subsidiary or
joint venture.
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Tel. No. 852-228-56

Factors Influencing International Business and Trade:

Several factors influence international business and trade, including:
Economic Factors: such as exchange rates, inflation, interest rates, and GDP growth
rates.
Political Factors: such as government policies, regulations, and stability.
Legal Factors: such as laws and regulations related to trade, investment, and
intellectual property.
Cultural Factors: such as language, religion, values, and customs.
Technological Factors: such as advancements in transportation, communication,
and information technology.
Benefits of International Business and Trade:
International business and trade offer several benefits for companies, including:
Access to new markets and customers: by expanding into new countries,
companies can tap into new markets and customer segments.
Increased revenues and profits: by selling more products and services, companies
can generate higher revenues and profits.
Economies of scale: by producing and selling in larger volumes, companies can
reduce their costs per unit and increase their profitability.
Diversification: by operating in multiple countries, companies can spread their risks
and reduce their exposure to local market fluctuations.
Access to resources: by investing in foreign countries, companies can access new
resources such as raw materials, technologies, and labor.
Challenges of International Business and Trade:
Despite the benefits, international business and trade also pose several challenges
for companies, including:
Cultural differences: companies need to navigate different cultural norms, customs,

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and preferences to succeed in foreign markets. Legal and regulatory barriers:

companies need to comply with different laws, regulations, and standards in each
country, which can be complex and costly.
Political instability: changes in government policies or political unrest can disrupt
business operations and create risks for companies. Supply chain and logistics:
companies need to manage complex supply chains and transportation networks to
ensure the timely delivery of goods and services.
Competition: companies face competition from local players and other
multinational corporations, which can be intense and challenging.
Conclusion:
International business and trade are essential for companies seeking to expand
their operations globally and access new markets and customers. To succeed in this
dynamic and complex environment, companies need to understand the key
concepts and factors involved, as well as the benefits and challenges associated
with this practice. By navigating these challenges and leveraging the opportunities,
companies can gain a competitive advantage and achieve sustainable growth in the
global marketplace.

B.History of International Business

Campos, Casey Chile Samson

•1870: Began first phase of Globalization

'“Golden Age” of globalization'
This period saw the spread of international trade, built on the exchange of Western
manufactures for developing economies' primary commodities along low-tariff
corridors. to 1914,
•After 1913: Increased Trade Barriers to Protect Domestic Production

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subsidies, standardization, tariffs, quotas, and licenses.

International trade increases the number of goods that domestic consumers can
choose from, decreases the cost of those goods through increased competition,
and allows domestic industries to ship their products abroad.
Domestic industries also benefit from a reduction in competition, since import
prices are artificially inflated.
•1919: World War I:
End of the first phase of Globalization, the Industrial Revolution in the UK, Germany
and the USA
A sharp increase in the trade with import and export by colonial empires
•1930’s: Declined Trade Ratio, GDP was 9.1
•After the 1930s: World Nations felt the need for International Co-operation in
global trade and balance of payments affairs
Establishment of IMF and c (World Bank)
IMF: International Monetary Fund
The IMF oversees the stability of the world's monetary system,
IBRD: International Bank for Reconstruction and Development
IBRD finances investments across all sectors and provides technical support and
expertise at each stage of a project.
•1947: 23 countries conducted negotiations in order to prevent the protectionist
policies and to revive the economies from recession aiming at the establishment of
the World Trade organization
•1947: Establishment of GATT (General Agreement on Trade and Tariffs)
substantial reduction of tariffs and other trade barriers and the elimination of
preferences, on a reciprocal and mutually advantageous basis
•The 1980s: efforts to convert GATT into WTO

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•1995: GATT was replaced by WTO (World Trade Organization) on Jan 1, 1995
GATT was an international treaty with a temporary international existence,
whereas the World Trade Organization is a permanent body whose authority has
been ratified by its many member nations.
Trade Liberalization
•1990 – 2000: The Term International Business (IB) has emerged from the term
International Marketing.
•After 1990: Rapid Internationalization add globalization
•Today: Interpreting the PESTIN factors of International Trade environment more
clearly.

C.Theories of International Business

Daizon, Ismael Arboleda

In general, Scientists have used theories to explain certain phenomena. The

theories of international business have been proposed to explain behavior of
internat business organizations. Many Governments officials as well as trade
practitioners had tried to find the reason on why nations trade or why there was
necessity at all. These inquiries led to proposals of the first theories that tries to
explain why nations trade. And as a result, there were various proposal of
international business theories.

International trade theories came earlier than international business theories.

Thou, there’s conmection between two theories.
International trade theories was the carrier of international business trade theories.

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The Difference between the theory of International trade and international

business is that, The International trade theory confines itself to import and export
of goods and services, whereas international business refers to all that international
trade covers, and in addition includes the analysis of the environment,
consideration of political, economy and social opportunities that is available in
world wide that can lead us in money. International Business theory is much wider
the scope than International trade theories.

D. International Product Cycle Theory

Arcan, Nachelle Pearl N.

Learning objectives:
At the end of our discussion, the class will be able to analyze the importance of
international product cycle theory, enumerate and differentiate its three distinct
stages, and state a situational example in each phase

Introduction:
In 1960, a Harvard business school professor. Raymond Vernon developed the
product life cycle theory. He explains the product cycle when exposed to an
international market. Also, it describes how the product matures and declines
through internationalization. To give you a more comprehensive explanation, let's
move forward to the three distinct stages of a product cycle. The three stages are
new product introduction, maturing, and standardized product.

In new product introduction always starts with the introduction of a new product.
At

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this phase, corporation businesses in developing countries tend to innovate a new

product. When the product in a market is small, the sales lead to mediocre sales,
wherein according to Raymond Vernon's conclusion, innovative products are likely
produced by developing countries. As it's the buoyant economy solely means that
there has disposable income to innovate new products. A buoyant economy occurs
when the economic circumstances are secured while the income increases
continuously. The buoyant economy doesn't pertain to the wealth or income level
of the country. It refers to the growth in real per capita incomes. The best example
of it was the Philippines since its economy has low per capita income. However, it
classified a buoyant economy as listed above, with real per capita income.
Contrarily, Spain has per capita income is 15 times higher than our country, the
Philippines, yet not considered a buoyant economy since its real per capita income
is declining. Mass production of local products of a corporation is continuous to
outweigh the low sales. Subsequently, any changes can be implemented without
risks and wasting time. When the sales increase, it is the time when corporations
will begin to export their product to other developing countries to increase their
sales and revenues. This strategy is one of the effortless steps in
internationalization since the appetites of people within developing countries are
analogous.

Here in maturing stage, the manufacturers tend to open local production plants in
developing countries once their product increases its demand to meet it. The
locally produced products will decrease their expenses, such as labor and export
costs. So it will increase its revenue. Moreover, manufacturers can still modify their
products for its improvement. With that, there's a high possibility that developing
countries will keep increasing their stage even though the unit cost is decreasing
since it's still required to have a skilled labor force to manufacture a good quality
product. As the

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local rivalry among the developing countries starts to form, they must have
alternatives for producing their products and expose more of it in the market for
continual growth.

The last stage is product standardization and streamlining of manufacturing. It

pertains to the exportation of products in the least developed countries. The
competitive product offers market saturation to achieve their target growth
through innovating their products. It also serves as the purveyor of the product,
which loses its competitive edge based on innovation. Also, it acts as the
supplier of goods that, innovation, lose their competitive advantages. In response,
the company concentrates on reducing the cost of the manufacturing process
rather than continuing to add new features to the product. They achieve this by
shifting production to countries with significantly lower income averages and
standardizing and streamlining the industrial processes required to produce the
goods. Local workforce and competitors in developing countries begin to rise when
they master technological advancements and manufacturing processes, which
increases their productivity and helps them focus on more important work.
Businesses will be more efficient and effective through technological advancement
since they apt expound their business activities like marketing, promotions, and
sales. Unfortunately, the product in the original country will decline its demand
since a new product snatches the potential customer's attention. The multinational
corporation leaves the production of the product in low-income countries as the
market has reached full saturation and instead focuses on developing new products
as it gracefully exits the market. People in the original country who still want the
goods will probably import them from the least developed country and purchase
them there. What little market share is left is divided between the primarily foreign
competitors. And the cycle starts

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over.

The best example of international product cycle theory in the new market
introduction is the regular sandwich introduced by England, a constituent country
of the United Kingdom. Considered a developing country based on Vernon's theory,
most of the innovative products launched by the developing country are in the
international market. When it comes to the maturing stage, the corporation
business will improve its product and open up a production plant to lessen the cost
of manufacturing. A regular sandwich, they can make it into a grilled sandwich. In
the last phase, the standardization product, the corporation can still modify its
product yet, instead of adding new features, it
will focus on reducing its manufacturing expenses to gain more sales in the
international market even though many countries already produce their products in
local markets.

Raymond Vernon developed the product life cycle theory. Also, it describes how
the product matures and declines through internationalization. When the product
in a market is small, the sales lead to mediocre sales, wherein according to
Raymond Vernon's conclusion, innovative products are likely produced by
developing countries. As it's the buoyant economy solely means that there has
disposable income to innovate new products. Here in maturing stage, the
manufacturers tend to open local production plants in developing countries once
their product increases its demand to meet it. Also, it acts as the supplier of goods
that, innovation, lose their competitive advantages. In response, the company
concentrates on reducing the cost of the manufacturing process rather than
continuing to add new features to the product.

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References:

https://smallbusiness.chron.com/three-stages-international-product-life-cycle-
theory-19364.html

http://www.buoyanteconomies.com/WhatIsBuoyant.htm#:~:text=For%20example
%2C%20the%20Philippines%20economy,rising%20real%20per%20capita
%20incomes.

E. Methods of Engagement

Bautista, Jefferlyn Rose

International Business and Trade involve the exchange of goods, services, and
capital across national borders. There are various method and engagement
strategies that business can used to succeed in international trade. Here are the six.
First is the exporting, licensing, franchising, joint ventures, foreign direct
investment and last is, strategic alliances. Exporting is involve selling products or
services from one country to another one, it is also a common entry strategy
companies looking to expand internationally. Next is licensing. It is involves
allowing another company to use your company's intellectual, property, such as
patents, trademarks or copyright, in exchange for a free or royalty. Next is,
franchising. This involves granting a license to use your business model, brand, and
operating system to another party in exchange for a fee or royalty. The other one is
joint ventures, involves for two or more companies coming together to form a new
business entity in which they both

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have ownership and control. And second to the last is, foreign direct investment.
This involves a company investing in and owning a business operations in another
country. The last one is, strategic alliances. This involves two or more companies
forming a partnership to share resources and expertise to achieve a common goal.

F. Conclusion

Adaya, Ellaine Joyce B.

To summarize, international business is an essential part of the global economy,

with companies increasingly looking to expand into new markets and take
advantage of new opportunities. It involves a range of challenges, including cultural
differences, legal and regulatory issues, language barriers, and logistical challenges.
The study of international business is concerned with understanding the operations
and strategies of businesses that operate across national borders. Theories of
international business have been proposed to explain the behavior of international
business organizations, and these theories cover a wide range of topics, including
the analysis of the international business environment, the identification of
opportunities for expansion and growth, and the development of effective
international business strategies. Theories of international trade also play an
important role in the study of international business, as they provide insights into
the factors that drive international trade and the patterns that emerge in global
markets. Ultimately, a deep understanding of international business theories can
help businesses to navigate the complex and dynamic global marketplace and
achieve success in their international operations. Additionally, to succeed in this
environment, businesses must have a deep understanding of the key concepts and

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factors involved in international business and trade, as well as the benefits and
challenges that come with it. By doing so, businesses can develop effective
strategies for competing in the global marketplace, accessing new customers, and
achieving sustainable growth over the long term.

Catre, Jeremie John V.

International Business and Trade is an activity that focuses on the selling and
buying of goods and services by different companies across the world. There are
many modes or ways for an entity to engage in or participate in international
business trade, ranging from the simple export and import of products and services
to forming franchises to direct investing.

When these companies are done engaging using these modes, their goods can now
be integrated in the worldwide or international market. The International Product
Cycle Theory explained by economist, Raymond Vernon, explains what these
products go through when exposed to the International Market. Involving how
these products began and introduced to market, matured, standard and when it
declined.

Beginning as a new product, tend to mature and standardize then decline, and
lastly another new product will be innovated. It is divided into these significant
stages:

First, the introduction of a brand new product, based on his theory it will be
innovated in a developed country where a buoyant economy exists. Citizens have
this capacity to have “Disposable Money”, their extra money to consume their
needs and wants. The production of the product is located in the innovating
country, as

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they have more control on improving the product and its features. Then they will
be exported to other developed countries as based on the theory, they tend to
have the same appetite on products.

Next, the maturing stage, where the product has now established demand in other
developed countries, consequently the production to be established in these
nations to reduce cost, and meet the increased demand. The demand will also
reach the developing countries.

After reaching the developed countries, as the demand rises on low income
countries, the demand on the innovating country falls. The manufacturing of these
products will now begin to move in the less developed countries as they have now
the demand and less developed countries tend to have much lesser cost producing
these goods, while the production in the innovating and advanced countries will
now decrease.
Thus, new products will be introduced and will start again on the first stage of the
International Product Cycle.

II. MORE ABOUT INTERNATIONAL BUSINESS

A. WHAT IS INTERNATIONAL BUSINESS AND TRADE?

Cayabyab, Jayme Diama

International business and trade play a critical role in the global economy, allowing
businesses to expand their reach and access new markets. The purpose of this
report is to provide an overview of international business and trade, including the
benefits

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and challenges, and the role of trade agreements and organizations.

Benefits of International Business and Trade: One of the primary benefits of

international business and trade is access to a wider market. By operating in
multiple countries. businesses can reach more customers and tap into new
markets. leading to increased revenue and profits.
Additionally, international business and trade provide access to resources and
technologies that may not be available domestically.

International business and trade provide opportunities for businesses to expand

their reach and access new markets.
However, it also presents challenges that businesses must navigate to succeed in
the global market. To facilitate international business and trade, many countries
have established trade agreements and organizations that aim to reduce barriers to
trade and promote free trade.

B. What is the Purpose of International Trade? International Business?

Cuaterno, Mecaella B.

The Purposes of International Trade and International Business

In today's interconnected world, international trade and international business

have become increasingly important for countries and firms alike. The purpose of
international trade is to allow countries to specialize in producing goods and
services that they are relatively better at producing, and then exchange them with
other

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countries for goods and services that they are relatively less efficient at producing.
By doing so, countries can increase their efficiency, productivity, and economic
growth, and also expand the variety and quality of goods and services available to
their citizens.

International trade also promotes cultural exchange and understanding, facilitates

the transfer of technology and knowledge, and provides access to vital resources
and raw materials. It helps to create jobs, increase competition, and lower prices
for consumers, and can promote political and diplomatic relations between
countries.

Similarly, the purpose of international business is to engage in commercial activities

across national borders, which can help firms to expand their customer base, access
new markets, and improve their competitiveness and performance. International
business allows firms to access resources, technology, and expertise that may not
be available domestically, and can help them to diversify their risks, lower their
costs, and promote innovation and learning.

International business can also help to build brand recognition and reputation
globally, and promote political and diplomatic relations between countries. In
short, international trade and international business are key drivers of economic
growth, innovation, and cooperation among nations, and play an important role in
shaping the global economy and society.

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C. Advantages of International Business

Calalo, Ricardo Azares

International business refers to business activities that take place across

national borders.

With advances in technology, globalization, and the liberalization of trade policies,

international business has become more common in recent years. In this report, we
will discuss the five main advantages of international business.

1. Access to new markets: One of the most significant advantages of international

business is access to new markets. By expanding their operations across borders,
companies can reach new customers and tap into previously untapped markets.
This can lead to increased revenue and growth for the company.
2. Diversification: International business can help companies diversify their
operations, reducing their exposure to risks associated with operating in a single
market By spreading their operations across multiple countries, companies can
reduce the impact of economic, political, and social changes in any single market.
3. Increased profitability: International business can often be more profitable than
domestic business. This is because companies can take advantage of lower labor
costs, access cheaper raw materials, and benefit from economies of scale.
Additionally, expanding into new markets can lead to increased revenue and
profits.
4. Knowledge and technology transfer: International business often involves sharing
knowledge and technology between countries. This can lead to innovation and
improved competitiveness. For example, companies can learn about new
manufacturing processes or

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marketing strategies that they can apply to their domestic operations.

5. Access to resources: International business can provide companies with access to
resources such as capital, talent, and technology that may not be available
domestically. This can help companies improve their operations and become more
competitive in their domestic and international markets.
Conclusion: In conclusion, international business offers many advantages
companies that are willing to invest in expanding their operations globally. By
accessing new markets, diversifying their operations, increasing profitability,
sharing knowledge and technology, and accessing resources, companies can
achieve significant growth and competitiveness in the global marketplace.
 D. What is most important cause of International Trade?

Arcinue, Brianne Nicole

The main ideas and methods for breaking into the global market are the focus of
this course. The impact of sociological, demographic, economic, technological, and
political-legal elements on the environment of international trade is highlighted.
The course provides examples of the distinctive features of international business,
such as the patterns of global trade, currency exchange, and international finance,
as well as firm globalization, international marketing, and multinational enterprise
operating processes. It illustrates how aspects of global business influence the
commerce process. It draws attention to the realities of doing business
internationally, including some of the benefits and challenges that can arise.

There aren't many trade models that account for all five trade-related factors at

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once. The rationale is that using such a model is difficult due to its complexity. By
selecting a model that typically only includes one cause, economists simplify the
world. This does not imply that economists think one cause or one model can
account for every result. Instead, one must look at what several models have to say
about the same phenomenon in order to try to understand the reality.
In the actual world, commerce occurs as a result of a combination of these various
factors. Each individual model only reveals a small portion of the potential
consequences. As a result, we should anticipate that the real world will be best
described by a combination of the various possibilities that are offered in various
models. Sadly, as a result, comprehending the complexity of the real world still
requires more art than science.
 E. Importance of International Business and Trade

Carpio, Ma. Alleah June Ang

International Business and Trade comes as solution in which lack of resources can
be bought or traded in other countries to fulfilled the lapse's in types of resources
that is used. Export and Import comes as countries established businesses that
specialized in their own markets or respective products and goods to trade in the
international scale. International business and Trade provides revenue and
fulfilled the lapsed in resources which in turn, can raised the living standards,
provides employment and enabling consumers to have a variety of goods and
services. Brand awareness For example In our country we specialize in abaka
products like sandals, bags , baskets and etc. Philippines exporting those product to
other countries and turns to provides a lot of revenue annually that can help for
our local abaca famers and small businesses or markets. In business focus best
example here is our very own filipino fastfood "jollibee". Jollibee is a local brand but
the owner of jollibee pursue to

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international scale until jollibee brand already known worldwide and had a
different branches not only here in Philippines but also in other countries that is
called new markets.

F. Conclusion
Dan-uya, Sheryl Joyce H.

In summary, International Business and trade refers to the exchange of goods,

services, and capital across borders. In simpler terms, it's when businesses from
different countries buy and sell stuff to each other. When countries specialize in
producing the goods or services they are relatively better at producing, and trade
with other countries for the goods or services they are relatively worse at
producing, both parties can benefit. It is basically a larger scale give and take
relationship. Wherein both sides benefit, and help each other out while being in
equal grounds in terms of contribution, and participation. When we talk about
international business trade, multiple countries are at play. This kind of trading can
be traced back a couple hundred years back because of the very clear benefits it
gives to the people or parties involved. For the purpose of international trade, this
kind of trade has become really important nowadays because companies want to
expand their markets and tap into the unique strengths of different regions. For
instance, a company in the US might import textiles from India because it's cheaper
to produce there, while a company in China might export electronics to Europe
because it has a competitive advantage in that area. This is because it allows each
country to focus on what it does best and to access goods and services that it may
not be able to produce domestically at the same quality or cost. As for the bigger
picture, international business trade can also help to promote economic growth
and development by allowing businesses to access

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new markets and customers, and by creating jobs and income opportunities. It can
also promote cultural exchange and understanding between countries, and can
help to reduce tensions and conflicts by promoting interdependence and
cooperation. Another example is helping in overproduction of goods and products.
When a certain
country is overproducing a certain product, where would the excess go? The trash?
Would it get stocked and piled up in a warehouse? This is where international trade
comes in. Those excess goods could be traded for other products in which a certain
country or business is lacking in which they could also have an abundance of.
International business refers to any business activity that involves cross-border
transactions such as trade, investment, and other forms of economic exchange
between companies located in different countries. It encompasses a wide range of
activities including exporting and importing goods and services, establishing foreign
subsidiaries or joint ventures, licensing technology, and engaging in international
franchising or outsourcing. As per the earlier topics which is about the ins and outs
of international business and trade, we can correlate this topic. In order to have an
international business, a world wide spread of marketing and advertising is needed
in order to get that business going. This would be in terms of being known, being
acknowledged, and being preferred by a majority of people. International business
can be advantageous in a number of ways. Access to new markets in one. It allows
companies to access a wider range of people or customers. This would of course
develop their business in a big way. The domestic market won't be that of a big
contributing factor for the stability of the business. Being an international business
would mean bigger income due to the sheer increase of incoming profit from the
ever growing market size offered by the international scene. A certain business
won't just go down to being bankrupt due to the wider range of the potential
market which grows by the second. Another advantage is a wider access to
different investors that

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would be willing to help the business grow exponentially. People, which are the
investors, who are experienced in the market that they specialize in is a big help to
develop the business, would be much easier to have contact and cooperation with.
Being in the international scene as a business, would also grant access to those
incoming workers or talents that could greatly contribute to the growth of the
business to be easily recruited. By hiring employees from different countries and
cultures, the business can have a better understanding of the needs and wants of
the current target market for better growth and longevity.

Asis, Annabelle

Cause of International Trade

 Differences in technology, disparities in resource endowment, and
disparities in the presence of government, the presence of demand, and the
presence of economies of scale policies. Differences in technology, resource
endowment, demand, and the like
The five primary reasons are the presence of economies of scale and the presence
of government policies in order to facilitate international trade. In most cases, each
trade model includes only one trade motivation.
 The importance of International Trade
 Countries rely on other countries to import goods that are difficult to find.
domestically.
International trade is important because countries import goods from other
countries. that are not readily available in their own country. A country that focuses
on exports may have. There is more supply than demand for certain raw materials
in its own markets.