Introduction to international Business Session -1 , 14.7.



1. 2. 3. 4.
5. 6. 7. 8.

To outline the historical perspective of globalisation To explain the concept of Globalization To elucidate factors influencing globalization To discuss the various techniques for measuring globalization To examine reasons for support and criticism of globalization To discuss global business expansion strategy for emerging market companies To explicate the concept of international business To delineates the motives for international business expansion

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globalization in the Christian era India and china two dominant economies Role of Venice during 1000-1500 AD Key countries in opening up European trade Position of Portugal Position of India in early 18th century Position of India in mid 18th century Position of globalisation during Pre World War I period From World WarI to World War Second

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Phase I ( 1947-65) Phase 2 ( 1965-80) Phase 3 ( 1980-90) Phase 4( Since early 1990s) Phase V ( 2000 onwards)


It is the process of creating networks of connections among actors at multicontinental distances, mediated through a variety of flows including people, information and ideas, capital and goods>


Some terms to signify various aspects of globalization are:
▪ ▪ ▪ ▪ ▪ Westernization Disneyification Cocacolani Mcdonaldization Walmartization

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Development in the means of transport and communication technology Barrier less flow of goods and services, capital, knowledge. Economic globalization Financial globalization Cultural globalization Political globalization

Movers of Globalisation
a. b. Economic libralisation Technological breakthrough a. Manufacturing technologies b. Transportation technology c. Information and communication technology Multilateral Institutions International economic integration Move towards free marketing systems Rising Research and development cost Global expansion of business operations Advents in logistic management Emergence of the global customer segment Regulatory control Emerging trade barriers Cultural Factors Nationalism War and Civil Disturbances Management Myopia

Restraining Factors of globalization
a. b. c. d. e. f.

c. d. e. f. g. h. i.

Trade openness through KOF Index of Globalisation A.T. Kearney Report on Foreign policy globalization index


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G means maximization of economic efficiencies Enhanced trade Increased cross border capital movement Improved efficiency of local firms Increase in consumer welfare


Criticism by NGOs, politicians, consumers and social organization.
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Unequal players in G Widening gap between rich and poor Wipe out of domestic industry Unemployment and mass layoff Balance of Payment problem Increase volatility of market Diminishing power of nation state- Treat to national sovereignty Loss of cultural identity Shift of power to multinationals Growing income inequality Economic growth

It implies the conduct of business activities beyond the national boundaries. It comprises of all the commercial transactions including sales, investments and transportations taking place between two countries. Activities in international business:
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International trade International marketing International Investments International Management

To expand sales- Market seeking motives
▪ Marketing opportunities due to life cycles ▪ Uniqueness of product or services

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To acquire resources Strategic motives▪ To minimize risk ▪ Growth and expansion

Economic motives
▪ Profitability ▪ Achieving economies of scale ▪ Spreading R&D cost

Difference between currency of home and host country        

Exchange rate Interest rate Inflation Taxation system Government regulation Language barriers Cultural differences Economic policy barriers Technology

Merchandise Export and Imports Service export and Imports
▪ Tourism and Transportation ▪ Performance of services ▪ Use of Assets

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Licensing and Franchising Turnkey operations Management Contracts Direct and Portfolio Investment

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Marketing Global manufacturing and supply chain Management Accounting Finance Marketing Human Resources


 Is off shoring good or Bad?


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