International

Business,
8th Edition
Griffin & Pustay

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Learning Objectives

 Discuss the meaning of international

business
 Explain the importance of understanding
international business
 Identify and describe the basic forms of
international business activities
 Discuss the causes of globalization
 Comprehend the growing role of emerging
markets in the global economy

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What Is International Business?

 International business consists of business

transactions between parties from more
than one country
Boundaries

Currencies
International
Business Cultures
vs.
Domestic Legal Systems
Business
Availability of Resources

Skills & Knowledge

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Why Study International Business?

 Provides the knowledge and skills that are

essential for your career in today's
business environment
 Helps you make better career assessments
 Compete successfully with peers and
future competitors
 Stay abreast of the latest business
techniques and tools
 Obtain cultural literacy

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International Business Activities

Exporting & Importing

International Investments

International Licensing

International Franchising

International Management Contract

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International Business Activities:
Exporting and Importing

 Exporting: selling  Trade in goods:

of products made in tangible products
one’s own country  Trade in services:
for use or resale in
intangible products
other countries.
 Importing: buying
of products made in
other countries for
use or resale in
one’s own country.

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International Business Activities

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International Business Activities:
International Investments

Foreign Direct Foreign Portfolio

Investments Investments
(FDI) (FPI)

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International Business Activities:
Other Forms

 International licensing
Intellectual Property
 International franchising
The Franchisor
The Franchisee
 International management contract
Management Services

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International Business Activities:
An International Business

 Multinational Corporation (MNC)

 Multinational Enterprise (MNE)
 Multinational Organization (MNO)

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International Business Activities

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Contemporary Causes of Globalization

 What is Globalization?
 Manifestation of globalization
Intensification of the role of international
trade
Growing importance of FDI
 Causes of Globalization
Strategic Imperatives
The Environmental Causes of Globalization
 Globalization and Emerging Markets

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Contemporary Causes of
Globalization

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Contemporary Causes of
Globalization

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Contemporary Causes of Globalization:
Strategic Imperatives

 Leveraging a firm’s core competencies

 Acquiring resources at low cost
 Expanding into new markets
 Competing with industry rivals

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Contemporary Causes of Globalization:
Environmental Causes

 Changes in the Political Environment

Reduction of trade and investment barriers
The collapse of European Communism
The ideological and policy changes
undertaken by China and India
 Changes in the Technological Environment
Advances in Transportation
Improvements in Information Processing
Changes in Communications Technology

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Contemporary Causes of Globalization:
Globalization and Emerging Markets

Emerging
Markets ?

Non-High
BRIC
Big Ten Income
Countries
Countries

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Contemporary Causes of
Globalization

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Contemporary Causes of
Globalization

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Review Questions

 What is international business? How does it

differ from domestic business?
 Why is it important for you to study
international business?
 What are the basic forms of international
business activity?
 How do merchandise exports and imports differ
from service exports and imports?
 What is portfolio investment?
 What are the basic reasons for the recent
growth of international business activity?
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