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OVERVIEW
INTERNATIONAL BUSINESS AND GLOBALIZATION
u Globalization and
International Business

u Globalization

u International Business

u Why we study
International Business?

u Factors effecting
International Business

u Globalization: An
Opportunity or a Threat?

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Umbrella Term:
u Financial integration,
What is u Trade liberalization,
Globalization?
u Deregulation and
market reforms,
u Technological, social
and cultural
homogeneity.

u It can be seen as the

emergence of single,
interdependent global
Globalization business civilization.

https://www.youtube.com/watch?v=xPD477FuqtY

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Production facilities are based in Toulouse,

France; Hamburg, Germany; Seville, Spain;
Tianjin, China; and Alabama, USA.
Globalization
u Refers to the wide set of interdependent
relationships among people, firms and
companies from different parts of the world.

u It refers to the reduction and elimination of

barriers to international movements of goods,
services, capital, technology, and people that
influence the integration of world economies.
Globalization
u Globalization is the ongoing process that
u Economists- Emergence of global markets deepens and broadens the relationships and
interdependence among countries.
u Sociologists- Convergence or mergence of
lifestyle and social values u International Business is a mechanism and
mode to bring about globalization.
u Political Scientists- Reduce national sovereignty
u Example:
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International Business

Why we study
International business consists of all commercial
transactions—including sales, investments, and
transportation—that take place between two or
International Business?
more countries.

International Business Increasingly foreign countries are a source of both

production and sales for domestic companies.

Private companies undertake such transactions for

profit; governments may undertake them either for
profit or for other reasons.

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Reasons to Study International Business

Think?
• Most companies are either international or compete with
international companies in home or in foreign countries.

• Modes of operations may differ from those used

domestically. (production, exports, partnership)

• Conducting business require different situation and

condition in other countries. (PESTEL)

• A better understanding of the conditions and situations

may help in formulation and implementation of better
decisions.

• An understanding that helps you to decide what

government policies in different countries to support.

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Internal Factors

u Company Strategy
u Company Resources
u Company expansion
u Firms Internal route (type and nature
Factors (Micro of entry)
Factors) u Type of Products and
services
u Nature of products
Factors Effecting Factors Effecting and services
u Firms External u Nature and Number
International Business Factors (Macro
International Business of markets
Factors)

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Factors Effecting International

Factors Effecting International Business Business

External Factors (Macro Factors)

u Microenvironment/ external environment
is the total environment outside the firm, in
which firms operates includes-

u Political
u Economic
u Social
u Technological
u Legal
u Environmental

Source: (Daniels et. Al., 2015)

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Factors Contributing to Rapid Factors Contributing to Rapid

Growth in International Business
Growth in International Business
u Increase in and wider application of technology
EXP- internet, transportation, online operations u Increase in global competition
u Liberalization of cross-border trade and resource EXP- Apple, Samsung, One Plus etc.
movements u Changing political situations
EXP- Levi's manufacturing in Pakistan, Airbus etc.
EXP- Huawei
u Removal of political and trade barriers
u Interconnected marketplace (Global Market)
EXP- CEPEC, NAFTA, SAARC, EU etc.
EXP- Starbucks vs Sattar Buksh.
u Development of services that support international u Expansion of cross-national cooperation
business
EXP- R&D centers, Call centers, education, hotels, airports EXP- NAFTA, SAARC, EU, CEPEC.
etc. u Increasing adoption of International Rules
u Growing consumer demand and pressures EXP- ISO certifications, AACSB accreditation etc.
EXP- Fashion, styles, new products, green products
u Others……….
https://www.youtube.com/watch?v=qhCM0F81vEg&list=R
DqhCM0F81vEg&start_radio=1&t=2

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Opportunities
International Business can be a source of

u Market seeking- market and sales expansion,

u Resource seeking- inputs, labor, cost, better

products

u Efficiencies seeking- lower cost, new ways to

doing business, economy of scale

Globalization An u Strategic Resource seeking- knowledge, expertise,

R&D and Innovation

Opportunity or u Survival- reducing risk, avoid competition at home

Threat?
u Others……………

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Threats
u Threats to national sovereignty (the
freedom of act locally)
u Economic growth and environmental
stress
u Growing income inequality and
personal stress
u Offshoring – the transferring of
production abroad – is controversial
in terms of who benefits when costs
are reduced and whether the process
exchanges good jobs for bad ones.

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Group Project

Group Project: Evaluation and analysis of a real or imaginary startup (a Pakistani or a

Foreign) who recently involved, in the process or planning to involve in international
business.
Groups:
u 2 to maximum 3 students

u Only one group can work with a specific company (first come first serve basis)

u No individual projects are permitted

u Students are responsible for selection and registration of their groups
u Each member of the group must be constructive, contributing and effective member
of the group.
u No room for FREE RIDERS, they should be report right from the start.
u Formation and registration of groups on LMS should be completed by end of week
2, time 24:00 hours (Midnight)
u Submission will be in week 16 time 24:00 hours (12:00 AM)

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