International Business

1
International Business

• A business whose activities involve crossing
  national borders

2
Foreign Business

• Denotes a domestic operation within a foreign
  country

3
Multi-domestic Company

• An organization with multi-country affiliates,
  each of which formulates its own business
  strategy based on perceived market differences

4
Global Company

• An organization that attempts to standardize and
  integrate operations worldwide in all functional
  areas

5
International Company

• Refers to both global and multi-domestic companies

6
A brief history of International Business

• East India Company establishes foreign branches
  in 1600
• Colt firearms had a plant in Britain before the
  Civil war
• By 1914 there were 37 U.S. companies with one or
  more production facilities in 2 or more overseas
  locations

7
What is driving the Global Frenzy

• Political
• Technological
• Market
• Cost
• Competition

8
Political Forces

• Unification and socialization trends
• Reductions in the barriers to trade
• Foreign Investment
• Privatization

9
Technology

• Internet
• Telecommunications
• Computers
• Robotics and Artificial Intelligence

10
Market Forces

• The Company as a global customer
• Cultural role in product development

11
Cost Forces

• Globalizing product line helps achieve economies
  of scale
• Globalizing product line extends the product life
  cycle
• Can locate operations where costs are lower

12
Why is International Management Different?

• Domestic environments
• International environments
• Foreign environments

13
External Environmental Forces

• Competitive
• Distributive
• Economic
• Financial
• Legal

• Physical
• Political
• Sociocultural
• Labor
• Technological

14
Competitive Forces

• Types of competitors
• Number of competitors
• Location of competitors
• Competitors activities

15
Distributive Forces

• National agencies available to assist in foreign
  distribution
• International agencies available to assist in
  international distribution
• Foreign agencies available to assist in foreign
  distribution

16
Economic Forces

• GNP, GDP
• Labor costs
• Personal consumption
• Available data

17
Socioeconomic Forces

• Characteristics of the population
• Distribution of the population
• Relationship between the population and the
  economy

18
Financial Forces

• Interest rates
• Inflation rates
• Tax rates
• Exchange rates

19
Legal Forces

• Foreign laws
• Domestic laws
• International laws

20
Physical Forces

• Topography
• Climate
• Infrastructure
• Weather
• Natural resources
• Location

21
Political Forces

• Nationalism
• Regionalism
• International Organizations
• Ideologies

22
Sociocultural Forces

• Attitudes
• Beliefs
• Opinions
• Values and Norms

23
Labor Forces

• Composition
• Skill level
• Attitudes about labor
• Unions

24
Technological Forces

• Skills
• Aptitude
• Equipment

25
Internal Environmental Forces

• Personnel
• Financial
• Production
• Marketing

26
Personnel

• Expertise
• Interest

27
Financial

• Required capital
• Resource allocation
• Credit

28
Production

• Site
• Capacity
• Quality initiative

29
Marketing

• Available research
• Costs
• Techniques