12/16/2020

INTERNATIONAL BUSINESS

Nguyen Thi Quynh Nga

nguyenthiquynhnga.cs2@ftu.edu.vn

Textbook and readings

1. Daniels, J., Radebaugh, L. and Sullivan, D. (2011) International
Business: Global Edition, 13th edition, Prentice Hall.
2. Hill, C.L.W. (2009) International Business: Competing in the
global marketplace 4th Ed. McGraw-Hill Irwin, Boston et al ii
3. Marios. I.K, International business: A Global Perspective
4. Business across culture: Fons Trompenaars
5. Giáo trình kinh doanh quốc tế: TS. Phạm Thị Hồng Yến
6. Giáo trình kinh doanh quốc tế: PGS.TS. Nguyễn Thị Hường – Đại
học kinh tế quốc dân
7. TT hỗ trợ hội nhập QT: https://trungtamwto.vn/
8. TT hỗ trợ hội nhập QT TPHCM: https://www.hoinhap.org.vn/

Learning requirements
 Before class you have to:
• Answer all the review questions which teacher mentioned in the
previous chapter

• Complete the activity and case studies

 In class:

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Grading

Attendance: 10%
Mid-term assignment: 30%
Final exam: 60%
Note:
- You have to meet two following
requirements:
- Attendance not less than 75%
- Mid – term test might be over 4
- 25 minutes late equal to absence

Mid-term assignment 5-6 mem/gr

select country u want to expand to + select a company (đac có thì phải chọn thị trường mới của cty
đó/start up) + select mặt hàng muốn expand (export/mở factory nc ngoài/franchise/liscencing/liên
• Each group will consider the viability of doanh: tùy thuộc mặt hàng)
starting or expanding business internationally
in a particular business sector of a selected
country
• The groups should provide and integrated
international business plan that both makes
recommendation as to the preferred type of
international business strategies, country
evaluation, entry modes and the structure of
organization. analyze business environment (nếu muốn)
thuyết trình vào tuần 6-7
show:
int'l strategies => select one of them;
entry mode => ptich+select;
structure of org.
đánh giá nguồn tư liệu
1 bản word nộp lại + 15p thtrinh trên lớp (vượt tigan sẽ cân nhắc trừ điểm)
bốc thăm chéo, nửa lớp thtrinh nửa lớp đặt câu hỏi +nxet/random => tính điểm trên
cách đặt câu hỏi luôn
Mid-term assignment
• Step 1: Select a country for analysis and the
business as well.
• Step 2: Obtain as much relevant information
about the country as possible. This may involve
research in the library, reference to relevant
Internet sites and/or discussion with those having
relevant experience and information
• Step 3: Identify the strategies; tactics and
implementation plan which provide the road map
to success for your business.

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Mid-term assignment
• https://globaledge.msu.edu/mpi/data/2020
• https://globaledge.msu.edu/
• https://www.doingbusiness.org/en/rankings
• https://www.coface-usa.com/Economic-studies
• https://www.coface-usa.com/Economic-
studies/Vietnam
• https://www.doingbusiness.org/

CONTENTS
• Chapter 1: Globalization
• Chapter 2: National Differences in Culture
environment
• Chapter 3: National Differences in political situation
• Chapter 4: National Differences in Economics
environment
• Chapter 5: International Business Strategies
• Chapter 6: Country Evaluation and Market Selection
• Chapter 7: Modes of Entries
• Chapter 8: The organizational structure

Globalization Chapter 1 (Daniels)

The Cultural Environments Facing Chapter 2 (Daniels)
Business Chapter 4 (Hills)
The Political and legal Environments Chapter 3 (Daniels)
facing business Chapter 2 (Hills)
The Economic Environments Facing Chapter 4 (Daniels)
Business Chapter 2 (Hills)
Country Evaluation and Selection Chapter 13 (Daniels)
Chapter 12 (Daniels)
The Strategy of International Business
Chapter 13 (Hills)
The Organization of International
Chapter 16 (Daniels)
Business
Chapter 14 (Daniels)
International Market entry modes
Chapter 14 (Hills)

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International Business
Fiteenth Edition, Global Edition

Chapter 1
International Business
and Globalization

Copyright © 2018 Pearson Education Limited. All Rights Reserved.

Learning Objectives (1 of 2)
1-1 Relate globalization and international
business (IB) to each other and explain why
their study is important
1-2 Grasp the forces driving globalization and IB

1-3 Discuss the major criticisms of globalization

1-4 Assess the major reasons companies seek to

create value by engaging in IB

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Globalization: The world has become increasingly interconnected and interdependent, and companies are looking to
expand their operations globally to tap into new markets and reach new customers. Understanding the principles of
international business is essential for success in this globalized environment.

Career opportunities: Many businesses today operate globally and require professionals with expertise in
international business. Studying this field can open up a wide range of career opportunities in fields such as
international trade, marketing, finance, and management.

Cultural awareness: International business involves working with people from different cultural backgrounds.
Studying international business can help develop cultural awareness and sensitivity, which are critical skills in today's
Globalization and IB diverse business world.
Objective 1-1
Economic development: International business plays a crucial role in promoting economic growth and development,
both in individual countries and globally. Understanding the principles of international trade and investment can help
• What is Globalization? facilitate the flow of goods, services, and capital between countries, which can lead to increased economic
prosperity.
• Why Globalization?
In conclusion, studying international business provides a comprehensive understanding of the global business
• The connection between Globalization and IB. environment and equips individuals with the skills and knowledge needed to succeed in a rapidly changing and
interconnected world
• Why study IB? Competitive advantage: Companies that understand the complexities of operating in multiple countries are better
positioned to compete globally. By studying international business, individuals can gain a competitive advantage and
be better equipped to navigate the challenges and opportunities of the global marketplace.

Knowledge of diverse business practices: International business exposes students to diverse business practices,
making decision strategies, and regulations, which can help broaden their understanding of business and increase their flexibility in
currency fluctuations adapting to new and challenging situations.

Understanding of geopolitical and economic forces: International business is influenced by a range of geopolitical and
economic forces, including trade policies, currency fluctuations, and political stability. By studying international
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
business, individuals can gain a better understanding of these forces and how they impact businesses and
economies around the world.

Networking opportunities: Studying international business often involves working with students and faculty from
different countries and cultural backgrounds, which can provide valuable networking opportunities and help develop a
global network of business contacts.

Preparation for a globalized future: The world is rapidly becoming more interconnected, and companies are
increasingly looking to expand their operations globally. Studying international business prepares individuals for the
challenges and opportunities of this globalized future, positioning them for success in a rapidly changing business
environment. 4
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Backgrounds of International Trade

Concept
• Narrow meaning: selling the goods or providing the services
through nations border
• Classic:
– Exchange of goods, services
– Between nations
– Through monetary
– Principle of parity
– For the benefits of all.

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. Backgrounds of International Trade

Concept
• Law on Commerce 2005, Vietnam
– Commercial activity is activity for the purpose of profit,
– Includes: selling and buying the goods,
providing the service, investment,
promotion and other profitable activites

• WTO: includes all transactions in trading nature such as:

selling goods, providing services, transportation, investment,
banking, franchising, promotion, communication…

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International business
• International business consists of all
commercial transactions between two or
more countries.
• The goal of private business is to make profits.
• Government business may or may not be
motivated by profit.

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A multinational financial services company, such as JPMorgan Chase, could provide its financial services through cross- 12/16/2020
border supply by offering online banking and investment services to clients in other countries. It could also offer
consumption abroad services by allowing clients to visit one of its branches in another country to receive in-person
financial services. The company could establish a commercial presence in foreign markets by opening branches and
hiring local staff, and it could send its financial experts abroad to work on client projects through the presence of natural
persons mode.

1: service supplied from the territory of 1 wto mem into the territory of
The four modes of supply are as follows: another
thương mại dịch vụ
• Mode 1:Cross-border. 2: service supplied from the territory of 1 wto mem to the service
CONSUMER of another mem of wto
• Mode 2:Consumption abroad.
• Mode 3:Commercial presence. 3: service supplied from the territory of 1 wto mem, through
commercial presence, in the territory of of another mem of wto
• Mode 4:Presence of natural persons
HW: differentiate 4 modes => give example (1 vdu xuyên suốt 4 hình thức)
4: service supplied from the territory of 1 wto mem, through the
presence of natural persons of another mem of wto

Global Value Chain of Textiles

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McDonald’s menu

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Suggest a
product that
McDonalds can
add to the menu
in the
Vietnamese
market in the
near future!

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Activity
• Advantages / disadvantages of a business
providing a product for the global market?
• In which areas can a product homogenization
policy be applied?

Globalization and IB
Objective 1-1

• What is Globalization?
Globalization is the widening and deepening of
interdependent relationships among people
from different nations.
The term sometimes refers to the elimination of
barriers to international movements of goods,
services, capital, technology, and people that
influence the integration of world economies.
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Globalization refers to the shift toward a more

integrated and interdependent world economy
(Charles. W. Hill)

What is Globalization ?

phụ thuộc lẫn nhau

Integration

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glob. of market => focus on trading

glob. of production => focus on ex-import, tech, labour cost,
Globalization and IB
Objective 1-1

• Why Globalization?
Globalization enables us to get more variety, better
quality, or lower prices.
• The connection between Globalization and IB.
The global connections between supplies and
markets result from the activities of IB, which are
all commercial transactions.
Globalization of
Markets
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Globalization of Markets strategy of differentiates

strategy of cost reduction (?)

…refers to the merging of depend on the pressure cùng tên => chọn 1 trong 2
historically distinct and separate
national markets into one huge Pros and cons of providing the same product for all global market?
global marketplace
The advantages of creating a global brand are economies of scale in production and
- Falling trade barriers  easier to sell packaging, which lower marketing costs while leveraging power and scope. The
internationally
disadvantages, however, are that consumer needs differ across countries, as do legal
and competitive environments. So significant country differences remain even when a
-The tastes and preferences of consumers firm has a strong global brand. Companies may decide to follow a global-brand strategy
are converging on some global norms but also make adjustments to their communications strategy and marketing mix locally
based on local needs.
- Same basic products worldwide
- “German market” or the “American
market”, only the global market in which areas can a produt homogenization (đồng nhất hóa sản phẩm) policy be applied
?

Globalization of
Production

…refers to the sourcing of goods and

services from locations around the
globe to take advantage of national
differences in the cost and quality of
factors of production like land, labor,
energy and capital

- Companies compete more

effectively by lowering their overall
cost structure or improving the
quality or functionality of their
product offering

Vietnam has opened the door to attract foreign investment, allowing FDI enterprises to
invest in both production and trade, and has many preferential policies ... In return, FDI
enterprises must commit to reach one billion a certain localization rate in the content of
exported products. However, some FDI enterprises do not comply with their commitments,
typically in the fields of assembling computers, phones, and automobiles. In the coming
time, stronger sanctions should be introduced for them to comply with this commitment.
toàn cầu hóa sản xuất
https://vietnamnet.vn/viet-nam-khong-the-nam-mai-o-day-cua-chuoi-gia-tri-505972.html
VN có nên mở rộng ra 2 bên concept không? tại sao VN chỉ focus vào manufacturing trong
smile curve?
- Lack of domestic standardized supplier for FDI enterprises

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Vietnam has focused on manufacturing because it has a large and growing workforce, and
the government has implemented policies to attract foreign investment in the manufacturing 12/16/2020
sector. By focusing on manufacturing, Vietnam has been able to tap into global supply As for whether Vietnam should open up to both sides of the "smiling curve", the answer is not straightforward and would depend
chains and provide low-cost labor for manufacturing activities. This has enabled Vietnam to on various factors such as the country's economic goals, political considerations, and the state of its industries.
become a major exporter of electronics products and other manufactured goods, and has
driven economic growth in the country. Opening up to the left side of the curve, such as raw material extraction and assembly, may provide access to cheaper inputs and
boost Vietnam's manufacturing sector. However, this could also lead to greater reliance on foreign companies and potentially
However, it's important to note that the "Smiling Curve" model is not applicable to all reduce the development of local industries.
industries, and it's not the only way for a country to create value and promote economic
development. Countries with different strengths and resources may choose to focus on On the other hand, opening up to the right side of the curve, such as design, branding, and marketing, may require investment in
other areas of the value chain, such as research and development, design, or marketing. education and innovation and can help to move Vietnam up the value chain. This could potentially create higher-paying jobs and
Ultimately, the key to success is to identify and build on a country's unique strengths and increase the country's competitiveness in the global market.
resources, and to develop a competitive advantage in the global market.
Ultimately, the decision to open up to either side of the "smiling curve" or both would need to be carefully weighed against
The Forces Driving Globalization and IB Vietnam's economic goals and the long-term benefits and drawbacks of such a strategy.

Objective 1-2 Diversification of the economy: Vietnam's economy is heavily reliant on low-value manufacturing, which makes it vulnerable to
external shocks and competition from other low-cost manufacturing countries. Opening up to high-value activities such as design
and branding could diversify the economy and provide a cushion against economic downturns.
• Although hard to measure, Globalization:
Upgrading of skills and technology: Moving up the value chain requires investment in education and innovation. By opening up to
−Has been growing. the right side of the curve, Vietnam could upgrade its skills and technology, which would not only help in the production of higher-
value products but could also spill over into other industries, improving their competitiveness and productivity.
−Is less pervasive than generally thought <=>
Improved productivity and efficiency: The high-value stages of the "smiling curve" often involve greater efficiency and productivity
(unwelcome effects are less than what was gains due to the use of advanced technologies and processes. By opening up to these stages, Vietnamese firms could adopt
these practices, leading to higher productivity, quality, and competitiveness.
thought)
Increased global integration: Opening up to the right side of the curve can help Vietnamese firms to better integrate into global
−Has economic and noneconomic dimensions. value chains and take advantage of international networks, creating opportunities for collaboration, learning, and growth.

−Is stimulated by several factors. In conclusion, opening up to both sides of the "smiling curve" could offer several advantages for Vietnam, including diversification
of the economy, upgrading of skills and technology, improved productivity and efficiency, and increased global integration.
However, the decision would need to be carefully considered, taking into account the specific context of Vietnam's economy,
industries, and policy objectives.

Copyright © 2018 Pearson Education Limited. All Rights Reserved.

The Forces Driving Globalization and IB

Objective 1-2: Grasp the forces driving globalization and IB.
• Currently, about a quarter of world production is sold outside its
country of origin, compared to about 7 percent in 1950.
• Studies beyond economic factors for the driving force of
globalization state  studies’ results:
o Size of countries—Smaller countries tend to be more
globalized than larger ones, mainly because their smaller land
masses and populations permit a lower variety of production.
o Per capita incomes—Countries with higher per capita incomes
tend to be more globalized than those with lower ones
because their citizens can better afford foreign products,
travel, and communications.
o Variance among globalization aspects—Although a country
may rank as highly globalized on one dimension, it may be low
on another, such as the United States being high on
technological scales but low on economic ones.
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Factors in increased Globalization

Objective 1-2

• The Forces Driving Globalization and IB

− Rise in and application of technology
− Liberalization of cross-border trade and resource
movements
− Development of services that support IB
− Growth of consumer pressures
− Increase in global competition
− Changes in political situations and government
policies
− Expansion of cross-national cooperation

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Drivers of Globalization
-The decline in barriers  free flow of goods, services, and capital. (GATT, WTO)

- The technological changes (productions, telecom, transportation..)

Criticisms of Globalization and IB

Objective 1-3

• Sovereignty
• Environment
• Some people may lose
• Increase to personal stress
tự đọc

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Why engage in IB?

Objective 1-4 Assess the major reasons companies seek to
create value by engaging in IB.

• Sales expansion
• Resource acquisition
• Risk reduction
về tự triển khai

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Activity
In your point of view, you choose anti or support
the globalization. Explain.

… Anti
drawbacks of globalization

- Firms collapse, job losses

- Wealth - Poverty gap
- Child, women labor
- Environmental degradation
- The cultural imperialism of global
media and MNEs
- Financial crisis
- Country sovereignty

Support…
- New production and
business opportunities
- New markets, new
production sources
- Lower prices for goods
and services.
- Greater economic growth
- Higher consumer income,
and more jobs

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Factors in IB Operations

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