final report of i.b

7/30/2019 final report of i.b.

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International business consists of all the factors around the business in which business exists.

International business consists of transactions that are devised and carried out across nationalto satisfy the objectives of individual and organization. The elements of geography such aslocation, topography, climate, natural resources play very important role for the businesspeople

Relevance Of Location: Location plays a vital role in the success of anyproduct mainly when company is doing business internationally. The main objective of everycompany is maximum acceptability of their product

Therefore, it is the primary requirement in front of every manufacturing industry is to develop

the most suitable location of their product to derive maximum benefits. Location helps to

generate sales, increase in demand, to retain the previous customer, to reduce transportationavailability of cheaper raw material etc are various advantage of effective location

Relevance Of Topography: Topography is one of the essential elements ofgeography which consist of the layer of land such as plateau, hills plains, mountain etc. The

people residing in different topography enjoy different taste , food , behavior and thus affect

the business decisions If the target market of company resides in the plain area they have much

easier life style whereas people residing in hilly areas have much tougher lifestyle and thesehave immediate effect on the buying habits of the consumer

Relevance Of Climate: Climate is the third and the most essential element ofgeography . As with the change in the climate need of consumer is also change. In the summer

there is increase demand of cool drinks cotton cloths , ice creams , cool products etc and in thesame way in winter the demand of woolen cloths , winter soaps , heater , blower etc These all

thing stimulate the demand of the product . An in the same way demand of umbrella , plastics

bags , plastics shoes in winter increases Therefore , it is necessary for every industry to

consider the climatic factors while manufacturing the product

Relevance Of Natural- Resources: Natural resources of any place arethe mineral, raw material, ores, mines etc available at the particular place. The naturalresources available in the area also stimulate the buying decision because the people of these

areas are based on agriculture, use wood for cooking instead of gas, involve in various naturalactivities for their livelihood. The natural resources also affect the decision of establishment of

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production centre and their success so, in this manner the entire above thing described imposea deep impact on the buying behavior of business people

International businessInternational business

International business can be defined as:

Business transactions crossing national borders at any stage of thetransaction.

It can also be defined as:

International business is a transaction between businesses that arelocated in different countries, as opposed to domestic business, which is a

transaction between businesses in the same country.

Why are businessesinvolved in internationalbusiness?

Expansion globally has proven to be quite profitable as well as increase the overall value in acompany. International business allows for an increase in profit potential, access to needed rawmaterial and etc.

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International business is all business transactions-private and governmental-that involve two ormore countries. Why should one be interested in studying international business? The simplestanswer is that international business comprises a large and growing portion of the world's totalbusiness. Today, almost all companies, large or small, are affected by global events and

competition because most sell output to and/or secure suppliers from foreign countries and/orcompete against products and services that come from abroad.

More companies that engage in some form of international business are involved in exportingand importing than in any other type of business transaction. Many of the internationalbusiness experts argue that exporting is a logical process with a natural structure, which can beviewed primarily as a method of understanding the target country's environment, using theappropriate marketing mix, developing a marketing plan based upon the use of the mix,implementing a plan through a strategy and finally, using a control method to ensure thestrategy is adhered to. This exporting process is reviewed and evaluated regularly andmodifications are made to the use of the mix, to take account of market changes impactingupon competitiveness. This view seems to suggest that much of the international businesstheory related to enterprises, which are internationally based and have global ambitions, does

often change depending on the special requirements of each country.

Another core issue is the company's growth and the importance of networking and interaction.This view looks at the way in which companies and organizations interact and consequentlynetwork with each other to gain commercial advantage in world markets. The network can beusing similar subcontractors or components, sharing research and development costs or

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operating within the same governmental framework. Clearly, when businesses formulate atrading block with no internal barriers they are actually creating their own networks.Collaborations in aerospace, vehicle manufactures and engineering have all sponsored thedevelopment of a country's or a group of countries' outlook based on their own internal marketnetwork. This network and interaction approach to internationalisation shows the substance ofbeing able to influence decisions when knowing how the global network players work or

interact.

For example, a crucial market network is that of the Middle East. Middle East countries arerich, diverse markets, with a vibrant and varied cultural heritage. This means that althoughthere has been a harmonization process during the past few years, differences still exist. Ratherthan business being simpler as a result, it should be recognized that because of regulations andthe need those countries have to restructure as they enter the global market, performing anykind of business can be highly complex. It should be remembered though that the Middle-Eastern countries have a low-income average and like to have their cultural differencesrecognized. Those firms that will or have recognized these facts have a good chance ofdeveloping a successful marketing strategy to meet their needs. Fortunately some firms haverealized these important differences and reacted adequately when strategic decisions had to bemade regarding their penetration to this kind of markets.

Background:

In the business market there is so much competition that companies sell outside the country toincrease sales. Increasing internationalization of business is requiring managers to have aglobal business perspective and an understanding of the differences in the environmentalforces of the markets in which they operate. Decision making in the international environmentis more complex and having an understanding of the external environmental forces enablesinternational managers to be alerted to new opportunities. Physical and environmental forcesare commonly called uncontrollable forces. Although managers have no direct control overthese forces, knowledge of these forces will better prepare them for greater success in the

international business environment. Four of these physical and environmental forces areidentified and their impact is discussed as follows:

1. climate2. topography3. the relative availability of natural resources4. Location

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1. Climate:

Climate encompasses the statistics oftemperature, humidity,

atmospheric pressure, wind, rainfall, atmospheric particle count

and other meteorological elemental measurements in a given

region over long periods.

Types of climate:

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http://en.wikipedia.org/wiki/Temperaturehttp://en.wikipedia.org/wiki/Humidityhttp://en.wikipedia.org/wiki/Atmospheric_pressurehttp://en.wikipedia.org/wiki/Windhttp://en.wikipedia.org/wiki/Rainfallhttp://en.wikipedia.org/wiki/Rainfallhttp://en.wikipedia.org/wiki/Meteorologyhttp://en.wikipedia.org/wiki/Meteorologyhttp://en.wikipedia.org/wiki/Temperaturehttp://en.wikipedia.org/wiki/Humidityhttp://en.wikipedia.org/wiki/Atmospheric_pressurehttp://en.wikipedia.org/wiki/Windhttp://en.wikipedia.org/wiki/Rainfallhttp://en.wikipedia.org/wiki/Meteorology


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1) Mediterranean

The Mediterranean climate is typically characterized by cool to warm summers and hot winters.

2. Arctic

Arctic climates are typically characterized by: Very cold [link

blocked]temperatures in the winter and cool temperatures in the summer Low

[link blocked]humidity Low amounts of [link blocked]percipitation Little cloud

cover resulting in very directional [link blocked]lighting Very long daylight

hours during the summer, and very short daylight hours during the winter

3. Temperate

Temperate climates are typically characterized by: Warm to hot temperatures in

the summer season, and cool to cold temperatures during the winter Higher [link

blocked]humidity in the summer and lower humidity in the winter Medium to

high amounts of [link blocked]precipitation A range of cloud cover, often

resulting in diffuse [link blocked]lighting Significant differences in number.

4. Tropical

Tropical climates are typically characterized by: Hot temperatures throughout

the year High humidity High amounts of precipitation A range of cloud cover,

often resulting in diffuse lighting Relatively little change in length of daylight

hours in the different seasons

5. Desert

Desert climates are typically characterized by: Cold temperatures at night and hottemperatures in the daytime Low humidity Low amounts of precipitation Little cloud

cover resulting in very directional lighting Because most of the world's deserts are

located close to the equator, desert climates tend to have relatively little change in

length of daylight hours in the different seasons

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http://architypes.net/pattern/meditteranneanhttp://architypes.net/pattern/arctichttp://architypes.net/pattern/arctichttp://architypes.net/pattern/arctichttp://architypes.net/pattern/arctichttp://architypes.net/pattern/arctichttp://architypes.net/pattern/arctichttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/tropicalhttp://architypes.net/pattern/tropicalhttp://architypes.net/pattern/tropicalhttp://architypes.net/pattern/tropicalhttp://architypes.net/pattern/tropicalhttp://architypes.net/pattern/deserthttp://architypes.net/pattern/tropicalhttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/arctichttp://architypes.net/pattern/meditteranneanhttp://architypes.net/pattern/arctichttp://architypes.net/pattern/temperatehttp://architypes.net/pattern/tropicalhttp://architypes.net/pattern/desert


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2. Topography

It is also the description of such surface shapes and features(especially their depiction in maps).

In a broader sense, topography is concerned with local detail in general, includingnot only reliefbut also vegetative and human-made features, and even local history and

culture.

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http://en.wikipedia.org/wiki/Terrainhttp://en.wikipedia.org/wiki/Local_historyhttp://en.wikipedia.org/wiki/Culturehttp://architypes.net/pattern/deserthttp://en.wikipedia.org/wiki/Terrainhttp://en.wikipedia.org/wiki/Local_historyhttp://en.wikipedia.org/wiki/Culture


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Influence Of Climate And Topography On InternationalBusiness:

These sources of environmental differences surface when people communicate on a

wide spectrum of business-related subjects. Notions of transportation and logistics, settlement,

and territorial organization are affected by topography and climate.

For example, transportation and logistics in one culture may seem patently absurd in another.

The manager of a Canadian company doing business in South America might never think to

ship goods from Chile to neighboring Argentina by the circuitous route of the Panama Canal.Because Canada is relatively flat and has an excellent network of railroads and highways, the

Canadian manager might assume that the easiest way to transport goods for any short distance

would be overland. This preference would be reinforced by the fact that many Canadianwaterways freeze over due to its harsh climate. As a result, the Canadian might well assume or

even specify a preference for overland transport in any relevant business communication.

What the Canadian might not understand in such a situation is that the rugged physical

environment of the Andean terrain and the related absence of cross-Andean railroads andfreeways would make such an option unreasonably expensive or even impossible. By contrast,

warm water ports and relatively easy access to the Panama Canal or other waterways would

reinforce the option of water routes even for such relatively short overland distances.

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Climate and Topography Influence on I.B in Reference Of Case

Study:Climate and Topography Analysis

Gerardo Gerry Camacho

University of Phoenix

BUS-475

November 2, 2009

Climate and topography are two very important factors that may influence

industries profitability and productivity. Is important for business leaders to

recognize how climate and topography factors impacts different industries.

Recognizing climate and topography could be of assistance for businesses

venturing into the global business environment arena. Climate and topography

are factors of huge importance when determining location and strategic planning.

One of the industrys most affected by climate and topography is the

transportation industry.

The transportation industry is vital to any economy. The transportation

industry takes care of moving people and merchandize by land, sea, and air. One

may say this industry is the veins and arteries of the economy. Topography has a

direct impact on this important industry. The relationship between the location ofroads, seaports, airports, and populated areas are crucial. Construction of new

roads and bridges must take into consideration soils studies and topographic

charts. The construction and location of airports needs to consider noise

abatements areas and topographic configurations that may present obstacles to

landing and departing aircraft. Airports also are extremely dependent on climate

considerations. Apart from their primary functions such as handling passengers,

freight and aircraft, airports nowadays play a strategic role in regional

development and are key facilities for the competitiveness of any territory.

Airports are engines for economic activity, create direct and indirect employment

and may act as innovative centers for new (environmental) technologies within a

region.

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Natural resource

A natural resource is anythingpeople can use which comes from nature. People do not make naturalresources, but gather them from the earth.

Examples of natural resources are:

air,water, wood, crude oil, solar energy, wind energy, hydro-electric energy, and coal.Refined oil is not a natural resource, for example, because people make it.

Types of natural resources:

We often say there are two sorts of natural resource: renewable resources and non-renewableresources.

ARenewable Resource grows again or comes back again after we use it.

For example, sunlight, water, and trees are renewable resources.

ANon-Renewable resource is a resource that does not grow or come back, or a resourcethat would take a very long time to come back.

For example, coal is a non-renewable resource. When we use coal, there is less coal afterward.

Influence of natural resource on i.b..

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http://simple.wikipedia.org/wiki/Naturehttp://simple.wikipedia.org/wiki/Airhttp://simple.wikipedia.org/wiki/Waterhttp://simple.wikipedia.org/wiki/Woodhttp://simple.wikipedia.org/wiki/Petroleumhttp://simple.wikipedia.org/wiki/Solar_energyhttp://simple.wikipedia.org/w/index.php?title=Wind_energy&action=edit&redlink=1http://simple.wikipedia.org/w/index.php?title=Hydro-electric_energy&action=edit&redlink=1http://simple.wikipedia.org/wiki/Coalhttp://simple.wikipedia.org/wiki/Oil_refineryhttp://simple.wikipedia.org/wiki/Sunlighthttp://simple.wikipedia.org/wiki/Coalhttp://simple.wikipedia.org/wiki/Naturehttp://simple.wikipedia.org/wiki/Airhttp://simple.wikipedia.org/wiki/Waterhttp://simple.wikipedia.org/wiki/Woodhttp://simple.wikipedia.org/wiki/Petroleumhttp://simple.wikipedia.org/wiki/Solar_energyhttp://simple.wikipedia.org/w/index.php?title=Wind_energy&action=edit&redlink=1http://simple.wikipedia.org/w/index.php?title=Hydro-electric_energy&action=edit&redlink=1http://simple.wikipedia.org/wiki/Coalhttp://simple.wikipedia.org/wiki/Oil_refineryhttp://simple.wikipedia.org/wiki/Sunlighthttp://simple.wikipedia.org/wiki/Coal


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Today the corporate are highly mobile. Today the Lakshmi Mills is seriously thinking ofshifting the factory within Coimbatore to unleash the value of the property , Hindustan

Unilever is shifting factory from Maharashtra to North eastern state to avail the subsidies

provided by the state governments, Tvs Group is having a plant at China and India isbecoming Global hub for Automobile Manufacturing. Rich natural sources in developing

nations have been exploited in order to meet out the financial obligations.Herman Daly argues that ecological and sociological dimensions would be more prominent ininternational trade if trade were conducted between national communities rather than

individual firms. The nations could more effectively seek multilateral balances based on the

physical amounts of resources traded as opposed to financial balances. This would allow the

nation to have resources deficit or surpluses with specific nations while maintaining an overallbalance.

the availability or unavailability of natural resources affects the international business in the

following ways.

First, countries that are rich in natural resources experience booms and busts, not only dueto commodity price fluctuations in world markets but also due to resource discoveries that

typically create intermittent upswings in export earnings that cause the national currency to

appreciate in real terms to the detriment of other export industries.

In second place, according toResource Abundance and Economic Development(Auty,

Richard M. [ed.]) countries that are rich in natural resources tend to be spoiled by rent seeking

on the part of producers who thus divert resources away from more socially fruitful economicactivity. The combination of abundant natural resource rents, ill-defined property rights,

imperfect or missing markets, and lax legal structures may have quite destructive

consequences.

Third, natural resource abundance may blunt private and public incentives to save and

invest and thereby impede economic growth. Specifically, when the share of output thataccrues to the owners of natural resources rises, the demand for capital falls, and this leads to

lower real interest rates and less rapid growth. In other words, natural capital may crowd outreal capital as well as human and social capital. Moreover, if mature institutions are conducive

to an efficient use of resources, including natural resources, and if poorly developed

institutions are not, then natural resource abundance may also retard the development offinancial institutions in particular and hence discourage saving, investment and economic

growth through that channel as well.

Forth and last, natural resource abundance may reduce openness by discouraging exportsand capital inflows. The Dutch disease manifests itself through reduced incentives to produce

non-primary goods and services for export which the overvalued currency of the resource

abundant country renders uncompetitive at world market prices. Hence the reduction in trade

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3. Location:

Where the country is located, whose its neighbors are, and where its capital and major citiesare should be a part of the general knowledge of all international business people. Location isimportant because it is an important factor in explaining a number of a nations political andtrade relationships , many of which directly affects a companys operations.

Influence of location on International business:

Location of a country and surface features such as mountains, plains, deserts andbodies of water contribute to differences in economies, cultures, politics and social structureswhich make physical and environmental forces important.

Site selection is a critical variable in the influence that place has on the interculturalnegotiation process. Inevitably, site selection will heavily impact negotiating outcomes Forthis reason, choice of location is a focal decision point during the pre-negotiation phase. Morespecifically, site selection will affect psychological climate, space availability, time factors andlimits, stress management, team building, information flow (including setting the agenda), andadoption of communication channels among other factors. For example, in cases wherenegotiations take place in the host nation, the host country negotiators typically assumeresponsibility for the protocols that govern location, transportation, orientation, introductoryinformation (i.e., credentials, business cards, dress codes, social events and seating

arrangements) and accommodations

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International Location

Multinationals have located subsidiary businesses in other countries for many years. In recentyears, this trend has gathered pace as part ofglobalization.

There are specific reasons why businesses might want to locate overseas.

Many countries place restrictions of one kind or another on imports, usually to protect

their own domestic businesses. One of the main ways is to levy a tariff, or import

duty/tax.

Wages vary enormously from country to country, mainly in line with different costs

and standards of living. There are costs of employment to go on top of wages as well.

Some countries have an awful lot of laws and paper work before a business can get

started. Some developing countries are particularly bad in this respect. So, althoughthey look very cheap place to locate, when we take into account the general hassle

factor, we may decide not to bother.

This is another factor that goes in favour of apparently "expensive" developed

economies. Many cheap developing countries are politically unstable.

Attracting big investments from foreign business brings many benefits, not least newjobs. So many governments create financial incentives.

Some businesses like to think of themselves as great global adventurers and levellers of

barriers, so it suits the fantasies of their managers to open up all over the place.

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final report of i.b