INTRODUCTION, NATURE AND

INTERNATIONAL
SCOPE

BUSINESS
Submitted To:
Mrs. Deepshikha
Sharma
Dheeraj Rawal (30615210002)
Gaurav Saroha
Submitted By:
Assistant Professor (30615210003)
Deepak Tushir
BBA (IIIrd Year)(30615210001)
 OVERVIE
•W
INTRODUCTION

• NATURE OF INTERNATIONAL BUSINES

• BENEFITS OF INTERNATIONAL BUSINESS

• PROBLEMS IN INTERNATIONAL
BUSINESS

• WHY INTERNATIONAL BUSINESS?

• SCOPE OF INTERNATIONAL BUSINESS

• ENTRY STRATEGY
 INTRODUCTIO
N
Ordinary,

“International Business refers to

buying and selling of goods or services
beyond geographical limits of a country. ”

In Simple
Words,
“Intern
ational
Business
refers to
business across
countries”
NATURE OF INTERNATIONAL
BUSINESS
Accurate and Timely Information
Available

The Size of International

Business

Market
Segmentation

International Market have more potential then Domestic

Market
 OPTIONS FOR DOING INTERNATIONAL

BUSINESS
Exporting goods and services.
 Giving license to produce goods in
the host country.
 Starting a joint venture with a
company.
 Opening a branch for producing &
distributing goods in the host
country.
 Providing managerial
services to
companies in the host country.
BENEFITS OF INTERNATIONAL
BUSINESS
Large Scale
Operations

Integration of
Economies of
Many Countries

Keen Competition

Dominated by Developed Countries &

MNC’s Benefits to Participating Countries

PROBLEMS IN INTERNATIONAL
BUSINESSDifferent Currencies, Languages and
Culture

High Foreign Investment and High

Cost Corruption and Bureaucracy

Entry Requirements Laws and

Regulations Tariff, Quotas, Varying Trade

Policies etc.
 WHY INTERNATIONAL
BUSINESS
To Export Surplus Stock
To Explore Growth
Opportunity To Increase
Profitability
To Reduce Cost of Inputs
To Achieve Economies of
Scale To Overcome
Competition
To Circumvent Rigid Laws
To Secure Advanced
Technology
To Obtain much Needed Foreign
Capital To Generate Employment
SCOPE
OF
INTERNATIONAL
BUSINES
S
Export
Business
• Domestic Firms which produce entirely in the home country and export a part of their output directly or
through in International County.

International Firm
• Such a firm, decides to exploit business opportunities outside the home country. It locates its branch in foreign market
and uses the domestic marketing mix abroad.

Multinational Firm
• An international firm turns into a multinational firm when it responds to specific needs of foreign markets in terms
of product, promotion and distribution. Different Strategies for different markets.

Global Firm
• A global firm also has business operations in several countries but there is coordination between different
subsidiaries operate under a common strategy. The subsidiaries are bound by global strategy decided by the parent
company.

Transnational Firm
• A transnational firm produces, markets, invest and operates across the globe. It is an integrated global enterprise
which thinks globally but acts locally.
Into International
Business
 1.
In the global
strategy, a
LICENSING
a firm (Licensor) allows
foreign company (Licensee) to produce its product in
exchange for a fee(loyalty). The licensor usually
helps the licensee in setting up production and also
in distribution and promotion.

Licensing enables the firm to earn revenues which

could not be generated in home market.

For Example:

Corporation entered the

Indian Market initially through licensing.
 2.
EXPORTING
A firm may export directly or through export house.
An export house matches importers and exporters
and also deals with customs office, documentation
etc.
Exporting requires no investment abroad.
It is a low cost and low risk of doing international
business.
Exports face tariff and non tariff barriers.
Intensive Marketing is needed to succeed in
exports. The exports gets payment quickly.
 3.
Franchising
is
FRANCHISING
a contractual agreement under which
one party(franchiser) sells the other party(franchisee)
the right to use the former ’s business name and sell
the product service in a given territory in a specified
manner.
Franchising enables a firm to enter foreign market
without making investment and without assuming
huge risk. The franchisee bears the cost of
operations. The franchisor gets royalty.

For Example:
Jubilant Food works is the franchisee of

in India.
 4. CONTRACT
In MANUFACTURING
contract manufacturing the company attaches its
brand name or trade make to goods produced by a
foreign company.
Company manufacturing enables a company to enter a
foreign market without investing in manufacturing or
marketing.
The company can also use contract manufacturing to
meet a temporary increase in sales
Labour costs are low.
For Example:
has more than 700 contract factories
around the world that manufacture its
footwear and apparel.
 5. JOINT VENTURES AND STRATEGIC
InALLIANCES
an international joint venture, two or more companies from
different countries enter into a partnership to undertake a major
project.
International joint venture allows sharing of risk, technology and
expertise.
This mode if useful where foreign companies are not allowed.
Ex: PepsiCo and Elite Industries to market Frito- Lay Snacks in
Israel.
A Strategic alliance is a long term agreement between two or more
companies to gain competitive market advantage. Unlike joint
venture there is no sharing of cost, management risks and profits.
Strategic alliance provides broad access to markets, capital and
technical expertise. It is more flexible than a joint venture.
Ex: Hewlett Packard has strategic alliances with Hitachi and Samsung
 6. FOREIGN DIRECT INVESTMENT
(FDI)
FDI is the buying of property and business in foreign
countries.
The most common form of FDI is a foreign
subsidiary. The subsidiary operates like a
domestic firm with production and
distribution functions.
It has to observe the laws of both home country and
host country.
Foreign Subsidiary allows complete ove
control r
technology and expertise.
It requires high investment and involves risk.
Thank
you…… Presented By:
Dheeraj
Rawal
30615210002
Bachelor of