INTRODUCTION TO

INTERNATIONAL TRADE AND

BUSINESS MANAGEMENT

I N T E R N AT I O N A L T R A D E A N D B U S I N E S S
INTERNATIONAL TRADE

• International trade, also known as global trade, is the exchange of

capital, goods and services across international borders or
territories, which could involve the activities of the government and
individual. International trade is also a branch of economics, which,
together with international finance, forms the larger branch called
international economics.
 EXPORT

PRODUCT
PRODUCT (SOLD) GLOBAL MARKET
(BOUGHT)

IMPORT
CHARACTERISTICS OF GLOBAL TRADE

• It gives consumers and countries the opportunity to be exposed to

new markets and products.
• It promotes industrialization, technological advancement, including
transportation, globalization, multinational corporations and product
outsourcing.
• International trade is typically more costly than domestic trade.
• International trade is mostly restricted to trade in goods and services
TOP TRADED COMMODITIES
(EXPORTS)
• Mineral fuels, oils, distillation products, etc.
• Electrical, electronic equipment
• Machinery, nuclear reactors, boilers, etc.
• Vehicles other than railway
• Plastics and articles thereof
TOP TRADED COMMODITIES
(EXPORTS)
• Optical, photo, technical, medical, etc. apparatus
• Pharmaceutical products
• Iron and steel
• Organic chemicals
• Pearls, precious stones, metals, coins, etc.
GLOBAL MARKETING

• Global marketing is marketing on a worldwide scale reconciling or

taking commercial advantage of global operational differences,
similarities and opportunities in order to meet global objectives. In
Addition, global marketing is also a field of study in general
business management to provide valuable products solutions and
services to customers locally, nationally, internationally and
worldwide.
EVOLUTION TO GLOBAL MARKETING

• Domestic Marketing
• International Marketing
• Global Marketing
ELEMENTS OF GLOBAL MARKETING

• Product
• Price
• Place
• Promotion
ADVANTAGES OF GLOBAL MARKETING

• Economies of scale in production and distribution

• Lower marketing costs
• Power and scope
• Consistency in brand image
• Ability to leverage good ideas quickly and efficiently
ADVANTAGES OF GLOBAL MARKETING

• Uniformity of marketing practices

• Helps to establish relationships outside of the political arena
• Helps to encourage ancillary industries to be set up to cater for the
needs of the global player
• Benefits of eMarketing over traditional marketing
DISADVATAGES OF GLOBAL
MARKETING
• Differences in consumer needs, wants and usage patterns for products
• Differences in customer response to marketing mix elements
• Differences in brand and product development and the competitive
environment
• Difference in the legal environment, some of which may conflict with
those of the home market
DISADVATAGES OF GLOBAL
MARKETING
• Differences in the institutions available, some of which may call for
the creation of new ones
• Differences in administrative procedures
• Differences in product placement
• Differences in the administrative procedures and product placement
can occur
INTERNATIONAL BUSINESS

• International business comprises all commercial transactions that

take place between two or more regions, countries and nations
beyond their political boundaries. The term “international business”
refers to all those business activities which involve cross-border
transactions of goods, services, resources between two or more
nations.
FACTORS AFFECTING COMPETITIVE
BUSINESS
• MEANS OF INTERNATIONAL BUSINESS
• CHOICES OF ENTRY MODES IN INTERNATIONAL
BUSINESS
• PHYSICAL AND SOCIAL FACTORS
• RISKS
MEANS OF INTERNATIONAL BUSINESS

• Entry Modes: Export/import, wholly owned subsidiary, merger or

acquisition, alliances and joint ventures, licensing
• Operations: Importing and exporting, tourism and transportation,
licensing and franchising, turnkey operations, management
contracts, direct investment and portfolio investments.
• Functions: marketing, global manufacturing and supply chain
management, accounting, finance, human resource
CHOICES OF ENTRY MODES IN
INTERNATIONAL BUSINESS
• Global Concentration: Many multinational corporations share and overlap
markets with a limited number of other corporations in the same industry.
• Global Synergies: The reuse or sharing of resources by a corporation and
may include marketing departments or other inputs that can be used in
multiple markets
• Global Strategic Motivations: Other factors beyond entry mode that are
the basic reasons for corporate expansion into an additional market. These
are strategic reasons that may include establishing a foreign outpost for
expansion, developing sourcing sites among other strategic reasons.
PHYSICAL AND SOCIAL FACTORS

• Geographical Influences
• Social Factors
• Legal Policies
• Behavioral factors
• Economic Forces
RISKS

• Strategic • Terrorism
• Operational Risk • Planning Risk
• Political Risk • Price Risk
• Technological Risk • Customer Satisfaction Risk
• Environmental Risk • Mismanagement Risk
• Economic Risk • Location Risk
• Financial Risk • Bribery
FACTORS THAT INFLUENCED THE GROWTH IN
GLOBALIZATION OF INTERNATIONAL BUSINESS

• Technology is expanding, especially in transportation and

communications
• Governments are removing international business restrictions
• Institutions provide services to ease the conduct of international
business
• Consumer want to know about foreign goods and services
FACTORS THAT INFLUENCED THE GROWTH IN
GLOBALIZATION OF INTERNATIONAL BUSINESS

• Competition has become more global

• Political relationships have improved among some major economic
powers
• Countries cooperate more on transnational issues
• Cross-national cooperation and agreements
END OF PRESENTATION

I N T E R N AT I O N A L T R A D E A N D B U S I N E S S