Approaches to

International Business
BHAVANA PUROHIT

SHIVAM SACHDEVA

UDAYRAJ SINGH

ADITTY

AKASH AMBAWAT

RIYA AHITAN
 ● International business refers to the trade of goods,
services, technology, capital and/or knowledge across
national borders and at a global or transnational scale.

Introduction to
International
● Transactions of economic resources include capital,
skills, and people for the purpose of the international
production of physical goods and services such as

Business finance, banking, insurance, and construction.

● To conduct business overseas, multinational companies

need to bridge separate national markets into one global
marketplace.
 ● Political factors
● High foreign investments and high cost
● Exchange instability

Challenges of IB
● Entry requirements
● Tariffs, quota etc.
● Corruption and bureaucracy
● Technological policy
● Quality Management Problems
About the Project
As trade barriers recede and
businesses in developed
economies increasingly pursue
market opportunities abroad,
competency and effectiveness
in international management
are paramount skills at many
companies.
Prospective international
managers must first realize
there is no single way to enter a
foreign market. Businesses
must choose the model
appropriate to their level of
resources, market potential, and
experience operating in the
international sphere.
There are various approaches to
international business. Each
has its advantages and
disadvantages. None of these
theories can be successful,
however, unless managers
understand completely the
nuances involved in their
applications
Ethnocentric Approach
In Ethnocentric Approach, the key positions in the organization are filled with the employees of the parent country.
All the managerial decisions viz. Mission, vision, objectives are formulated by the MNC’s at their headquarters, and
the same is to be followed by the host company.
 Polycentric Approach

In Polycentric Approach, the nationals of the host country are recruited for the managerial positions to carry out the
operations of the subsidiary company. The rationale behind this approach is that the locals of the host country know
their culture better and can run the business more efficiently as compared to their foreign counterparts.

We use the polycentric approach when we need the skills of locals to conduct our business. For example, if we want to
expand our clientele to a specific country, we’d hire a local professional who knows the market and can coordinate
our sales operations.
Regiocentric Approach

The Regiocentric Approach is method wherein the business is done with different countries lying within the
geographic region of business subsidiary

.The similarities on the basis of economic, cultural and political characteristics are taken into account while
grouping these countries to form regions. Here, the basic assumption is that the needs of the potential customers in
these countries would be similar.

So, while developing the operations and marketing strategies, these would be similar across the regions, and it is
done based on the analysis of the entire region, and not only by concentrating on individual countries.
Geocentric Approach

A geocentric company is one where the management looks at opportunities on a global scale. Instead of focusing on
the way that business gets done in a given country, it looks at how to conduct business anywhere in the world, based
on common ways of communicating.

Companies that are truly global in nature adopt this approach since it utilizes a globally integrated business strategy.
Large international companies generally adopt the geocentric strategy with considerable success.

The rationale behind the Geocentric Approach is that we have become part of a global village and have a global
economy where no organization is insulted from the effect’s foreign markets and competition
THANK YOU