International Business: Strategy, Management, and the New Realities

MGT 464International Business

Management

Professor StoneFall 2010

International Business: Strategy, Management, and the New Realities

Important Information

• Office: JH 4222• Phone: 805.660.8483• Office Hours: Mon 2-3 and 6-7; Thu 1-2• Text: Cavusgil, Knight & Riesenberger, 2008.

International Business: Strategy, Management and the New Realities. Pearson. ISBN 978-0-13-173860-7

International Business: Strategy, Management, and the New Realities

Class Content

• Weekly QuizzesChapter Reading and Geography 7%

• Int’l Business Research PaperTeam project 25%

• Int’l Business Paper PresentationTeam project 5%

• Cases and Discussion Answers4 at 3% each (2pages max.) 12%

• Midterm Evaluations 2 m-c, non-cumulative at 15% each 30%

• Final Evaluation (cumulative essay) 15%• Attendance, Particip. Instructor Eval. (6%)

International Business: Strategy, Management, and the New Realities

Research Paper Overview

4-person groups• Identify an international business opportunity (industry)• Select two potential host countries in which to operate• Evaluate potential and risk of the two countries• Select one country• Describe entry steps and considerations for your business in

that country.• Paper length approximately 30 pages, with MLA-style

references.• Present your results and conclusion at the end of the semester

International Business: Strategy, Management, and the New Realities

Research Paper Milestones

Sept. 2 Team formation in class

Sept. 16 Turn in proposal

Oct. 7 Turn in detailed outline

Nov. 11Turn in first draft for feedback (optional)

Dec. 2 Team presentation

Dec. 9 Turn in final report

International Business: Strategy, Management, and the New Realities

Chapter 1

Introduction to International Business

International Business Strategy Management & the New Realities

International Business: Strategy, Management, and the New Realities

The Internationalization of Business

• Companies conduct value-adding activities on a global scale, primarily to organize, source, manufacture, and market

• A “level playing field” has made international activities appealing to all types of firms- large and small; manufacturing and service sectors (e.g. banking, transportation, engineering and design, advertising, and retailing). REALLY?

International Business: Strategy, Management, and the New Realities

The Nature of International Business

• All value-adding activities including sourcing, manufacturing, and marketing, can be performed in international locations

• The subject of cross-border trade can be products, services, capital, technology, know-how, and labor

• Firms internationalize via exporting, foreign direct investment, licensing, franchising, and collaborative ventures

International Business: Strategy, Management, and the New Realities

Globalization of Markets – a Macro Concept

Ongoing economic integration and growing

interdependency of countries worldwide.

• Integration is central to globalization, which has resulted in the widespread diffusion of products, technology, and knowledge worldwide, regardless of where they originate.

International Business: Strategy, Management, and the New Realities

Dimensions of Market Globalization

• Greater integration and interdependency of national economies; leading to freer movement of goods, services, capital, and knowledge

• Rise of regional economic integration blocs• Growth of global investment and financial

flows• Convergence of consumer lifestyles and

preferences• Globalization of production

International Business: Strategy, Management, and the New Realities

World Trade Is Growing Faster than GDP

Rapid integration of world economies isfueled by factors such as the decline oftrade barriers, e.g. tariffs, liberalization ofmarkets, privatization and the economicvitality of emerging markets. REALLY?

Comparing the Growth Rates of World GDP and World Exports

Data are 4 years old.What’s been happening Since 2006?

Leading Countries in International Merchandise Trade, Total Value

Data are 9 years old.What’s been happening Since 2000?

Leading Countries in International Merchandise Trade, as % of Nation’s GDP

What data does thisChart represent? What isDate of this chart?

Foreign Direct Investment (FDI) Inflows into World Regions (in Billions of U.S. Dollars per Year)

Data are 5 years old.What’s been happening Since 2004?

Leading Countries in International Services Trade, Total Value

What data does thisChart represent? What isDate of this chart?

Leading Countries in International Services Trade , as % of Nation’s GDP

What data does thisChart represent? What isDate of this chart?

International Business: Strategy, Management, and the New Realities

Why Study International Business?

• A facilitator of the global economy and interconnectedness

• A contributor to national economic well-being

• A competitive advantage for the firm

• An activity with societal implications

• A source of competitive advantage for you

International Business: Strategy, Management, and the New Realities

An International Business Student Must…

• Understand cultural differences

• Know why firms in different countries trade

• Know how and why governments control international trade

• Know how to analyze a country for its potential for trade

• Know how to create an international business opportunity