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c hapter 1

c hapter 1. an overview of international business. Chapter Objectives. Discuss the meaning of international business Explain the importance of understanding international business Identify and describe the basic forms of international business activities Discuss the causes of globalization

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c hapter 1

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  1. chapter 1 an overview of international business

  2. Chapter Objectives • Discuss the meaning of international business • Explain the importance of understanding international business • Identify and describe the basic forms of international business activities • Discuss the causes of globalization • Comprehend the growing role of emerging markets in the global economy 1-2

  3. The Business of the Olympics 1-3

  4. The Business of the Olympics • Intense reflection of international business • Government of games by IOC • Competition for hosting • Revenue sources for the Olympics • Broadcast rights • Corporate sponsorships 1-4

  5. What Is International Business? • Business transactions between parties from more than one country • Parties may include • Private individuals • Individual companies • Groups of companies • Governmental agencies 1-5

  6. How Does International BusinessDiffer from Domestic? • Currency conversion • Legal systems • Culture • Availability of resources 1-6

  7. Why Study International Business? • Large organizations • Foreign-owned subsidiaries • Small businesses • Competitors • Business techniques and tools • Cultural literacy 1-7

  8. International Business Activities • Exporting and Importing • International Investments • Licensing, Franchising, and Management Contracts 1-8

  9. Exporting and Importing • Exporting: selling of products made in one’s own country for use or resale in other countries • Importing: buying of products made in other countries for use or resale in one’s own country 1-9

  10. Figure 1.1 Exports as a % of GDP 1-10

  11. Visible and Invisible Trade • Trade in Goods • Merchandise exports and imports • Visible trade • Trade in Services • Service exports and imports • Invisible trade 1-11

  12. Exporting at Boeing 1-12

  13. International Investments • Capital supplied by residents of one country to residents of another • Two categories: • Foreign direct investments • Portfolio investments 1-13

  14. Other Forms of International Business Activity Management contracts Franchising Licensing 1-14

  15. Variations of Organizations Multinational Corporation Multinational Enterprise Multinational Organization 1-15

  16. Multinational Corporations (MNCs) • Engage in foreign direct investment • Own and control foreign assets • Buy resources in multiple countries • Create goods and services in multiple countries • Sell goods and services in multiple countries 1-16

  17. ExxonMobil Wal-Mart Royal Dutch Shell BP General Motors Chevron DaimlerChrysler Toyota Motor Ford Motor ConocoPhillips Table 1.1 The Largest MNCs 1-17

  18. Motives for Globalization • To leverage core competencies • To acquire resources and supplies • To seek new markets • To better compete with rivals 1-18

  19. Environmental Change and Globalization Changes in Political Environments Technological Changes 1-19

  20. Figure 1.2 World Exports as a % of World GDP 1-20

  21. Figure 1.3 Foreign Direct Investment Relative to World GDP 1-21

  22. Argentina Brazil China India Indonesia Mexico Poland South Africa South Korea Turkey Globalization and Emerging Markets 1-22

  23. Framework of Book • The World’s Marketplaces • International Environment • Managing International Business • Managing International Business Operations 1-23

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