Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 56 views

    International Business: Gaurav Dawar

    Uploaded by

    sarathnair26
    International business involves commercial transactions between two or more countries. The document discusses objectives, means, functions, and alternatives of international business operations. It also summarizes regional trade agreements like NAFTA and the EU that help facilitate internationalization. Common routes of entering foreign markets include exporting, direct investment, and portfolio investment. Challenges for multinational corporations are also outlined.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd

    International Business: Gaurav Dawar

    Uploaded by

    sarathnair26
    56 views22 pages
    International business involves commercial transactions between two or more countries. The document discusses objectives, means, functions, and alternatives of international business operations. It also summarizes regional trade agreements like NAFTA and the EU that help facilitate internationalization. Common routes of entering foreign markets include exporting, direct investment, and portfolio investment. Challenges for multinational corporations are also outlined.

    Original Description:

    Original Title

    International Business

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    International business involves commercial transactions between two or more countries. The document discusses objectives, means, functions, and alternatives of international business operations. It also summarizes regional trade agreements like NAFTA and the EU that help facilitate internationalization. Common routes of entering foreign markets include exporting, direct investment, and portfolio investment. Challenges for multinational corporations are also outlined.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    56 views22 pages

    International Business: Gaurav Dawar

    Uploaded by

    sarathnair26
    International business involves commercial transactions between two or more countries. The document discusses objectives, means, functions, and alternatives of international business operations. It also summarizes regional trade agreements like NAFTA and the EU that help facilitate internationalization. Common routes of entering foreign markets include exporting, direct investment, and portfolio investment. Challenges for multinational corporations are also outlined.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 22

    International Business

    Gaurav Dawar

    Introduction
    International business is a term used to collectively

    describe all commercial transactions that take place between two or more regions, countries and nations beyond their political boundary. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations.

    Operations -

    Objectives: sales expansion, resource acquisition, risk minimizati on. MeansModes: importing and exporting, tourism and transportation, licen sing and franchising, turnkey operations, management contracts, direct investment and portfolio investments. Functions: marketing, global manufacturing and supply chain management, accounting, finance, human resources Overlaying alternatives: choice of countries, organization and control mechanisms

    Regional developments helping internationalization


    NAFTA (North American free trade agreement) 2. EU (European Union) 3. WTO (World Trade Organisation) 4. ASEAN (Association of South east Asian Nations)
    1.

    Routes of Globalization
    Export & Import 2. Tourism & Transportation 3. Use of assets 4. Performance of services
    1.

    5.
    1.

    Direct Investment
    Joint Venture 2. Wholly owned subsidiary

    6.

    Portfolio Investment

    Criticism for MNCs


    1.

    2.
    3. 4. 5. 6. 7.

    Challenges to national state sovereignty Inequities Interference with economic objectives Social disruption Environmental degradation Imperialism MNC and technology

    Internationalisation
    internationalization has been viewed as a

    process of increasing involvement of enterprises in international markets


    Today more and more firms operate

    internationally and in some cases even globally. In almost all major economies of the world, the emphasis of most theories tends to be on how businesses should internationalize rather than on why they should do so.

    Regional Developments helping Internationalization


    The emergence of NAFTA (North American free trade

    agreement, comprising US, Mexico and canada, created a huge market in north America EU (European Union consist of 25 nations and all these countries have removed barriers and adopted a single currency i.e. Euro. GATT (General agreement on Tariff and trade) are stimulating increase in world trade, and would reduce taridd by 38% and under new agreement GATT has been replaced by WTO. Collectively 148 countries have joined. ASEAN (Association of South east Asian nations) made up of Indonesia, Malaysia, Singapore, Philippines, Brunei, Thailand etc.

    Process of deciding to go International


    1.

    2. 3. 4. 5. 6.

    Assess the prevailing conditions in market (i.e. competition, trade policy and regulatory environment) Selection of the country Identifying the opportunities Locating the resources Ascertaining the risk Proceed to planning

    Need for Internationalisation


    Main reason for internationalization is stated as

    the need of companies to be able to stay competitive. Increase Customer base Offset seasonal fluctuations in local market Offset increasing cost of doing business Establish the brand in international market Spreading business risk Accessing new technology

    Figure 1: Internationalisation and the network model (Johanson & Mattsson 1988

    Foreign Trade policies


    Outward oriented Policy it provides incentives

    for production for domestic market and exports. The level of protection is less. Inward oriented policy High level of protection, and bias of industrial trade and policy in favor of domestic protection. Also refer to as import substitution policy.

    Trade Theories
    Mercantalism

    Theory of Absolute Advantage


    Theory of comparative Advantage Factor Endowment Theory Product Life cycle theory New Trade Theory

    Barriers
    Tariff

    Barriers

    Non-Tariff Quota

    Export Tariff

    Import Tariff
    Transit Tariff

    Subsidies

    Others Local content Requiremen t

    Product Testing & Standard

    Embargoe s

    Administrativ e Delays

    Currency control

    Protectionism
    National Security Retaliation Protecting jobs

    Political argument

    Protecting Human Rights

    Protectionism

    Infant Industry argument Strategic trade policy

    Economic Argument

    Financing techniques in Foreign Trade


    Cash in advance

    Factoring
    Forfeiting Bankers acceptance Short term credit Long term credit EXIM Bank Bills of lading

    Letter of Credit
    A letter from a bank guaranteeing that a buyer's

    payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. 1. It eliminates the credit risk 2. It reduces the danger that payment will be delayed 3. Letter of credit reduces uncertainty 4. Letter of credit can also guard against pre shipment risk

    Forfeiting
    In forfeiting, a bank advances cash to an exporter

    against invoices or promissory notes guaranteed by the importer's bank. The amount advanced is always 'without recourse' to the exporter, and is less than the invoice or note amount as it is discounted by the bank. The discount rates depends on the terms of the invoice/note and the level of the associated risk.

    Bill of lading
    A legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination of the good being carried. The bill of lading also serves as a receipt of shipment when the good is delivered to the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.

    You might also like