Five Steps to Success in International Business

1
Five Steps to Success inInternational Business

1. Prepare to Go Global
2. Find International Markets
3. Find International Partners
4. Structure International Operations
5. Maintain Change International Operations

2
Globalization

• Awareness, understanding, and response to global
  developments and linkages.

3
Multidiscipline

• Economics
• Politics
• Geography
• History
• Language
• Anthropology
• Jurisprudence
• Statistics

4
Peter Woike (World Bank)

• Globalization can help would-be industrialists
  change the labels of their countries from
  developing to developed.

5
International Business Creates

• New resources
• New markets

6
International Business Benefits

• Raised real incomes
• Restrained prices
• Introduced greater product variety
• Spurred technological advances and innovation
• Raised real living standards
• (Czinkota, p. 53)

7
Importance of international trade in US society

• In 2007, US exports have grown at more than twice
  the rate of US imports
• US jobs supported by exports pay 13 to 18 more
  than other jobs
• Wages paid by manufacturing plants that export
  are 9 higher
• Exporting company 10xs more likely to succeed
• International sales contribute to 1/3 of domestic
  economic growth
• Biggest growth from small companies with fewer
  than 20 employees
• (Czinkota, p. 53-54)

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Cons?

1. Strengthens corporations and investors at the
   expense of the poor?

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IMF

• In last century
• Richest 25 of countries GDP increased by 6xs.
• Poorest 25 of countries GDP increased by 3xs.

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Cons?

1. Strengthens corporations and investors at the
   expense of the poor?
2. Ignores human rights?
3. Fails to relieve country debt?
4. Causes terrorism?
5. Competition can cause business failure and
   unemployment?

11
Taylors First Law of International Business

• The world will always grow smaller.

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Causes of Globalization

• Technology
• Communications
• Travel
• Business competition
• Natural human interest and curiosity

13
Expansion of Global Business

• Over past 30 years, value of international
  business has increased from 200 billion to 7.6
  trillion (38xs)!

14
Recent Shifts

• US investment abroad2.6 trillion Overseas
  investment in US 2.8 trillion
• US trade with Asia 709 billion With Europe
  450 billion
• US imports far exceed exports

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Globalization Drivers

• Market factors
• Cost factors
• Environmental factors
• Competitive factors

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Motivations
PROACTIVE (want) Profit advantage Unique
products Technological advantage Exclusive
information Tax benefit Economies of scale
REACTIVE (need) Competitive pressures Overproducti
on Declining domestic sales Excess
capacity Saturated domestic markets Proximity to
customers and parts