international business, 5th edition

Lecture 1
an overview of
international
business
 What Is International
Business?

• Business transactions between parties

from more than one country
• Parties may include
– Private individuals
– Individual companies
– Groups of companies
– Governmental agencies

1-2
 How Does International Business
Differ from Domestic?

• Currency conversion
• Legal systems
• Culture
• Availability of resources

1-3
 Why Study International
Business?

• Large organizations
• Foreign-owned subsidiaries
• Small businesses
• Competitors
• Business techniques and tools
• Cultural literacy

1-4
 International
Business Activities

• Exporting and Importing

• International Investments
• Licensing, Franchising, and
Management Contracts

1-5
 Exporting and Importing

• Exporting: selling of products made

in one’s own country for use or
resale in other countries
• Importing: buying of products made
in other countries for use or resale
in one’s own country

1-6
 Visible and Invisible Trade

• Trade in Goods
– Merchandise exports and imports
– Visible trade

• Trade in Services
– Service exports and imports
– Invisible trade

1-7
 International Investments

• Capital supplied by residents of one

country to residents of another
• Two categories:
– Foreign direct investments
– Portfolio investments

1-8
 Other Forms of
International Business Activity

Management
contracts

Licensing Franchising

1-9
 Variations of Organizations

Multinational Corporation

Multinational Organization

1-10
 Multinational Corporations
(MNCs)

• Engage in foreign direct investment

• Own and control foreign assets
• Buy resources in multiple countries
• Create goods and services in multiple
countries
• Sell goods and services in multiple
countries

1-11
 Table 1.1 The Largest MNCs

• ExxonMobil • Chevron
• Wal-Mart • DaimlerChrysler
• Royal Dutch Shell • Toyota Motor
• BP • Ford Motor
• General Motors • ConocoPhillips

1-12
 Some of the largest MNOs

• United Nation • Harvard University

• International Red • Stanford
Cross University
• World Trade
• Yale University
Organization
• International NGOs
like CARE, Save the
Children USA

1-13
 Motives for Globalization

• To leverage core competencies

• To acquire resources and supplies
• To seek new markets
• To better compete with rivals

1-14
 Environmental Change and
Globalization

Changes in
Technological
Political
Changes
Environments

1-15
 Globalization and
Emerging Markets

• Argentina • Mexico
• Brazil • Poland
• China • South Africa
• India • South Korea
• Indonesia • Turkey

1-16
 Life of an International
Business Person

1-17
 My days with Walmart

1-18
 ..with Toyota

1-19
 …..with Chevron

1-20
 ….with UN

1-21
 ….with Harvard and Yale

1-22
 It’s not always fun- Nepal earth
Quake

1-23
 Next Class

• Ethics and Culture

• Cases
• Discussion quizzes

1-24