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INTERNATIONAL BUSINESS

INTERNATIONAL BUSINESS. Ilan Bijaoui 2005 ibii@netvision.net.il. ECONOMIC SYSTEMS. ·   Market Allocation: Consumers allocate resources. Competition + Consumer Protection (USA) ·   Command Allocation: State Planners.

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INTERNATIONAL BUSINESS

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  1. INTERNATIONAL BUSINESS Ilan Bijaoui 2005 ibii@netvision.net.il

  2. ECONOMIC SYSTEMS ·   Market Allocation: Consumers allocate resources. Competition + Consumer Protection (USA) ·   Command Allocation: State Planners. ·   Mixed Systems: Governmental Expenditures/GDP 32% USA, 64% Sweden

  3. INDEX OF ECONOMIC FREEDOM Source: Heritage foundation www.heritage.org

  4. China's Trade with the United States ($ billion 1997 1998 1999 2000 2001 2002 2003 US Exports 12.8 14.3 13.1 16.3 19.2 22.1 28.4 % change 6.7 10.9 -8.0 24.4 18.3 14.6 28.5 US Imports 65.8 75.1 87.8 107.6 109.4 133.5 163.3 % change 21.0 14.1 16.9 22.6 1.6 22 22.3 Total 78.6 89.4 100.9 123.9 128.6 155.6 191.7 % change 18.4 13.7 12.9 22.8 3.8 21 23.2 US Balance -53.0 -60.8 -74.7 -91.3 -90.2 -111.4 -134.8 SOURCES: US International Trade Commission, US Department of Commerce

  5. MOTIVATION PUSHES AND PULLS TO INTERNATIONALIZE TRADITIONAL MOTIVATIONS(Bartlett) ·  Secure Key Supplies ·  Access Low Cost Factors ·  Local Market Saturation-Competition ·  Market Seeking Behavior ·  Technology – Vernon Product Life Cycle

  6. EMERGING MOTIVATIONS ·  Economic, Technological, Social Developments ·  Amortization of R&D Expenditures(public telephone switching systems) ·  Shortening Product Life Cycle ·  Scanning & Learning Capabilities ·  Competitive Positioning (Cross Subsidization)

  7. NATURAL ENVIRONMENT Raw materials Energy costs Pollution Geography Know how Change Infrastructure TECHNOLOGICAL ENVIRONMENT Improvement Regulation PM 4.4 Natural and technological environments

  8. DEMOGRAPHIC ENVIRONMENT Age Family Population Education ECONOMIC ENVIRONMENT Spending patterns Economic PM 4.3 Demographic and economic environments

  9. POLITICAL ENVIRONMENT Interest groups Legislation Enforcement CULTURAL ENVIRONMENT Values Subcultures Shifts PM 4.5 Political and cultural environments

  10. POLITICAL ENVIRONMENT • Sovereignty of Nation States: Regulations, Law & Support • Political Risk: Expropriation Restrictions, Controls, Currency, War, National Buyers • Taxes: Bi lateral tax treaties • Equity Control & Expropriation

  11. LEGAL ENVIRONMENT • Public International Law: International conventions, custom • International Court of Justice (ICJ) • Private International Law: Common Law (English) US, India, Singapore • versus Code Law (Napoleonic Code) Thailand, Japan China. US Uniform Commercial Code

  12. OWNERSHIP AND CONTROL  . Licensing: Risk New Competitor (AT&T Bells –Sony small batteries transistors, Cardin · Investment – Joint Ventures (T92) · Ownership Investment

  13. OWNERSHIP & CONTROL Ownership ` 100% 0 100% 0 Control

  14. ENTRY STRATEGIES Exports Sourcing Licensing Joint Venture. Equity Ownership Alliances

  15. ORIENTATION OF MANAGEMENT & COMPANIES Ethnocentric Home Country Superior, Similarities Regiocentric Geocentric Similarities & Differences Similarities & Differences In a world region In home & host Countries Polycentric Each Host Country is Unique, Differences

  16. INTERNATIONAL STRATEGIES ·      Domestic ·      International ·      Multi-domestic, Multi National ·      Global ·      Transnational

  17. STAGES OF DEVELOPMENT

  18. INTERNATIONAL STRATEGY OF SELECTED FIRMS

  19. (Source: Michael E. Porter, Competitive Advantage (New York: Free Press, 1985), p.37.) PM 11.2 The generic value chain

  20. ILLUSTRATIVE CONFIGURATION

  21. ILLUSTRATIVE CONFIGURATION

  22. ILLUSTRATIVE COORDINATION

  23. CONFIGURATION OF ACTIVITIES High Simple Global Strategy Extensive Coordination among subsidiaries Coordination of Activities Country-centered strategy by multinationals operating in one country Export-based strategy, decentralized marketing Low Geographic Dispersed Geographic Concentrated

  24. PORTER’S DIAMOND Chance Firm Strategy Structure & Rivalry Factor Demand Conditions Conditions Related & Supporting Government Industries

  25. PORTER’S DIAMOND DISCUSSION

  26. ITALIAN SUPPLIER INDUSTRIES TO FOOTWEAR Leather Footwear Parts of Design Footwear Services Leather Processed working Leather Machinery

  27. ITALIAN INDUSTRIES RELATED TO FOOTWEAR Leather Leather Leather Athletic Clothing Handbags Footwear Footwear Parts of Footwear Design Services Leather Processed working Leather Machinery

  28. PARTIAL CLUSTURING IN DANISH ECONOMY Barley, Malt Food Processing Refrigeration Yeast Equipment Equipment Pork Beer Dairy Industry Trypsin Fermentation Purification (Enzyme) Insulin Equipment Technology Fermented Insulin Fermented Enzymes

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