Globalization and ib
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The document provides an overview of globalization and international business, outlining key concepts, factors influencing globalization, and strategies for companies expanding into global markets. It discusses the historical perspective of globalization, motives for international business, and challenges faced by companies, including cultural, regulatory, and market factors. Additionally, it highlights the stages of internationalization from domestic operations to multinational companies.
Globalization and ib
- 2. 2 Learning Objectives To explain the concept of globalization To elucidate factors influencing globalization To discuss global business expansion strategy for emerging market companies To explicate the concept of international business To delineate motives for international business expansion To expound the strategy for managing business in the globalization era
- 3. 3 Globalization of Business: A Historical Perspective In the initial years of human history, there were hardly any formal barriers, such as tariffs or non-tariff restrictions, for the movement of goods or visa requirements for the people. The concept of globalization can be traced back to the phenomenon of a nation-state.
- 4. 4 What is International Business? International business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations.
- 5. Why Go International? Higher Profits Utilization of Excess Production Capacity Competition in Domestic Market Limited Home Market Political Stability Vs Instability Availability of Technology & Managerial Competence. 5
- 6. High Cost of Transportation Nearness to Raw Material Availability of Cheap labour Liberalization & Globalization To Increase Market Share To Avoid Tariffs & Quotas 6
- 7. 7 International Business International business: • causes the flow of services, and capital across the world • offers consumers new choices • permits the acquisition of a wider variety of products • facilitates the mobility of labor, capital, and technology • provides challenging employment opportunities
- 8. 8 International Business Questions How will an idea, good, or service fit into the international market? Should trade or investment be used to enter a foreign market? Should supplies be obtained domestically or abroad? What product adjustments are necessary to be responsive to local conditions? What are the threats from global competitors, and how can these threats be counteracted?
- 10. 10 Movers of Globalization Economic liberalization Technological breakthrough Multilateral institutions International economic integrations Rising research & development costs Global expansion of business operations Advents in logistics management Emergence of the global customer segment
- 11. 11 Factors Restraining Globalization Regulatory controls Emerging trade barriers Cultural factors Nationalism War and civil disturbances Management myopia
- 12. 12 Reasons for Support of Globalization Maximization of Economic Efficiencies Enhancing Trade Increased Cross-border Capital Movement Improves Efficiency of Local Firms Increases Consumer Welfare
- 13. 13 Criticism of Globalization Wipes out Domestic Industry Leads to Unemployment and Mass Lay-offs Increased Volatility of Markets Loss of Cultural Identity
- 14. Stages of Internationalization 1. Domestic Company Limited Operations Focuses on Domestic Business Formulate Strategies for National Business Environment 14
- 15. 2. International Company Extends Business Operations to Foreign Countries Extends the Domestic Product, Price, Promotion to Foreign Markets. Enter with Limited Resources Reduced Risk 15
- 16. 3. Multinational/Global/ Company Extend their Business Operations Make Necessary Changes Introduce New products Establishes Offices/Branches/Subsidiaries Different Strategy for Different Country Operate Like Domestic Company 16