7/30/2019 01 IntBiz.theories Session 1, 2 & 3
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INTERNATIONAL BUSINESS
Prof Bharat Nadkarni
7/30/2019 01 IntBiz.theories Session 1, 2 & 3
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Business Excellence
(Getting the Big Picture of business)
Prof Bharat Nadkarni
7/30/2019 01 IntBiz.theories Session 1, 2 & 3
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International Business
From a very early age, we are taught to break apart problems,
to fragment the world. This apparently makes complex tasksand subjects more manageable, but we pay a hidden,
enormous price. We can no longer see the consequences of
our actions; we lose our intrinsic sense of connection to a
larger whole. When we then try to see the big picture, we try
to reassemble the fragments in our minds, to list and organize
all the pieces. But the task is futile similar to trying to
reassemble the fragments of a broken mirror to see a true
reflection. Thus, after a while we give up trying to see the
whole altogether.
7/30/2019 01 IntBiz.theories Session 1, 2 & 3
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International Business
Who are the Stakeholders of Business ?
Shareholders and Promoters
Customers
Employees
Suppliers and Partners (incl Contractors, Agents etc)
Government
Society
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International Business
Most Admired Business
Balancing and Exceeding the Expectations of all its
Stakeholders.
Effectiveness of Business
Achievement of Objectives.
Efficiency in Business
Achievement of Results with the least amount of
Resources.
Innovation
N D B
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International Business
Emerging Waves
Factor Yesterday TodayMarket Sellers Buyers
Players Few Several
Kind of Players National Global
Price Level High Dropping
Consumer No choice Multiple ChoiceTechnology Low High
Quality Average High
Delivery Weeks/Months/Years Off the shelf
Needs Limited Enhanced
Response Sluggish QuickRelation Curt Respect
Approach Mass Personalised
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Thank You
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International Business
Scope : World is turning into a Global village.
SMOOTH
1. Source raw materials wherever they are cheapest.
2. Manufacture anywhere in the world where it is mostcost effective.
3. Obtain and Sell in those global markets whereprices are highest.
4. Organize and Raise finances globally.
5. Try and Forge international strategic alliances.6. Hire the best talent from all over the world. To
manage all the above points.
And you will have achieved the stature of a true Global
Organization
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International Business
Reference Books
International Business By Subba Rao
Francis Cherunilam
Sundaram and Black
Daniels & Radebough
Charles Hill & Jain
Roebuck & Simon
7/30/2019 01 IntBiz.theories Session 1, 2 & 3
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International Business
International Business
1. Definition of IB, Domestic vs IntI business, Adv & Disadv
2. International trade theories3. Globalisation, Regional groups, Transnational economy.
4. Market entry strategies
5. International Trade Institutions, Policies
6. International finance & Foreign Direct Investments
7. International issues, G 20 issues, MFN status, Intellectual property
rights, purchase power parity etc
8. Ethical business, CSR, Millineum goals, HR policies etc
9. Logistics, Information technology, cultural and social issues,
Generalised topics etc10.Case studies
7/30/2019 01 IntBiz.theories Session 1, 2 & 3
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International Business
International Trade Policy
Laissez-faire approach (Free trade)
Vs Interventionist approach
Independence, Dependence and Interdependence
Theories
Mercantilism (ex Colonial rule)
Absolute advantage and Comparative advantage (ex
India tea, US- wheat) Theory of Country size (ex India, China, Brazil)
The Product Life Cycle Theory
Factor Proportions Theory (ex India, Hong kong,
Singapore, Dubai)
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International Business
International Business
International business can be defined as activities that buysand sells goods and services across two or more national
boundaries, even if the management is located in a one
country. It includes any type of business activity that crosses
national borders. International business is related with
those enterprises which have operating units outside their
own country. There are institutional arrangements who
provide some managerial direction of economic activity
taking place abroad.
Conducting international business is really not like playing a
whole new ball game but it is like playing in a different ball
park, where the managers have to learn the factors unique to
7/30/2019 01 IntBiz.theories Session 1, 2 & 3
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International Business
the playing field. The guiding principles of a firm engaged in
international business activities should incorporate a globalperspective. Incorporating an international outlook into the
firms basic statement will help focus the attention of
management on the opportunities outside the domestic
economy.
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International Business
Difference between Domestic and International business
1. Higher rate of profits (Absolute advantages, taxes,
concessions and incentives)2. Expansion of production capacities
3. Competition (pull & push effects)
4. Wide market
5. Political stability
6. Technology
7. High cost of transportation
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International Business
Growing importance of International Business
Current trends are towards the increasing globalisation
and interdependence of firms, markets and countries. Intense competition at global level
Exchange rate developments shift fromve to +ve
growth
Global capital flows to LDCs
Differences in Price and Cost
Restructuring the economy to integrate with global
economy
Increased importance of CSR
The growing importance on enhancing standard of living
in LDCs
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International Business
Liberal trade policies and procedures
Revolution in communication and transportation
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International Business
International Business Corporate Approaches
1. Ethnocentric
2. Polycentric
3. Regiocentric
4. Geocentric
I t ti l B i
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International Business
SAARC (7):
South Asian Association for Regional Cooperation
India, Pakistan, Sri Lanka, Nepal, Bhutan, Bangladesh,Maldives
NAFTA (3) : North American Free Trade Agreement
USA, Canada, Mexico
LAFTA (9) : Latin American Free Trade Area
Argentina, Brazil, Mexico, Chile, Peru, Uruguay, Paraguay,Columbia, Ecuador
ASEAN (5) : The Association of South East Asian Nationswas formed by the Bangkok Declaration, 1967, by fivecountries, viz., Indonesia, Malaysia, Philippines, Singapore
and Thailand.
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International Business
EU (15) : European Union
Austria, Belgium, Britain, Denmark, Finland, France,Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,Portugal, Spain, Sweden.
Euro : Common currency of the EU was launched by 11members on 1.1.1999, Britain, Denmark, Sweden didnt join. Greece joinedin 1.1.2001
Maastricht Treaty of 1991 set the stage for the monetoryunion.
EU Additions
With effect from May 1, 2004 the total membership of EUincreased to 25. Following ten countries were inducted.
Estonia, Latvia, Lithuania, Poland, Czech Republic, Hungary,Slovenia, Slovakia, Cyprus and Malta.
Two more members, Bulgaria and Romania, were inducted in2007, taking the tally to 27 countries.
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International Business
International Business Environment
1. Internal Environment
Org. Structure ( I P O )
Production
Marketing
Finance
H R
R & D
I T
Business Development
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International Business
International Business Environment
2. External Environment
a. External Micro Environment
All Stakeholders and Competitors
b. External Macro Environment
S T E P I N
(Social, Technical, Economical, Political, International,
and Natural)
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Thank you
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The Millennium Development Goals
as defined by UN
Eradicate extreme poverty and hunger
Achieve universal primary education
Promote gender equality and empower women
Reduce child mortality
Improve maternal health
Combat HIV/AIDS, malaria and other diseases
Ensure environmental sustainabilityDevelop a global partnership for development
Stop Child Labour