International Business (BBA MBA)
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The presentation outlines the fundamentals of international business, focusing on its definitions, nature, scope, features, importance, various approaches, motivations, entry strategies, and barriers. It emphasizes the significance of adapting to global markets and highlights the roles of international organizations like GATT and the IMF. The document also addresses the advantages and disadvantages of engaging in international business and the reasons behind its recent growth.
International Business (BBA MBA)
- 1. Presentation on International Business Chapter No. 1 WWEELL CCOOMMEE
- 2. IINNDDEEXX • Introduction to International Business • Nature & Scope & Feature of I B • Importance of I B • Approaches of I B • Motivation to do I B • Need for I B • Adopting to Customers Needs • Problems in I B • Entry Strategy • Advantages & Disadvantages of I B • Reasons for recent I B Growth • International Organization
- 3. WWHHAATT IISS IINNTTEERRNNAATTIIOONNAALL BBUUSSIINNEESSSS ?? • The exchange of goods & services, Resources, Knowledge, & Skills , among individuals & businesses in multiple/two or more countries. • Transaction that are carried out across national borders to satisfy the objectives of individuals and organization
- 4. WWHHAATT IISS IINNTTEERRNNAATTIIOONNAALL BBUUSSIINNEESSSS ?? • All Commercial transactions that take place between two or more countries. – 1-Private & Government 2-Sales 3-Investments 4-Logistics 5- Transportation
- 5. NNAATTUURREE OOFF IIBB 1. Accurate Information & timely 2. The size of the international business 3. Market segmentation 4. International markets have more potential than domestic markets
- 6. SSCCOOPPEE OOFF IIBB 1. International Marketing 2. International Finance and Investments 3. Foreign Exchange 4. Global HR
- 7. FFEEAATTUURREESS OOFF IIBB 1. Large scale operations 2. Integration of economies 3. Dominated by developed countries and MNCs 4. Benefits to participating countries 5. Keen competition 6. Special role of science and technology 7. International restrictions
- 8. IIMMPPOORRTTAANNCCEE OOFF IIBB 1. Earn foreign exchange 2. Optimum utilisation of resources 3. Achieve its objectives 4. To spread business risks 5. Improve organization's efficiency 6. Get benefits from Government 7. Expand and diversify 8. Increase competitive capacity
- 10. II BB AAPPPPRROOAACCHHEESS 1. Ethnocentric approach 2. Polycentric approach 3. Regiocentric approach 4. Geocentric approach
- 11. II BB AAPPPPRROOAACCHHEESS 1. Ethnocentric approach • Under this approach , target market is own country , Exccesive production will export due to change in customer taste, preferences
- 12. 1. Ethnocentric approach Organization Structure Managing Director ↓ ↓ ↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻↓ MGR MGR MGR MGR MGR R & D FIN PROD HRD MKTG ↓ ↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻↓ Asstt. Mgr Asstt. Mgr Asstt. Mgr
- 13. II BB AAPPPPRROOAACCHHEESS 2. Polycentric approach • Under this approach, the companies customizes the marketing mix to meet the taste, performance and needs of the customers of each international market.
- 14. 2. Polycentric approach Organization Structure Managing Director ↓ →→→ C E O ↓ FOREIGN SUBSIDIARY ↓ SOUTH AFRICA ↓ ↓ ↓ ↓ ↓ ⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻↓ MGR MGR MGR MGR MGR R & D FIN PROD HRD MKTG
- 15. II BB AAPPPPRROOAACCHHEESS 3. Regiocentric approach • Under this approach, the company operating successfully in a foreign country thinks of exporting other neighbouring countries of the host country. • At this stage, the concerned subsidiary considers the regional environment ( such as laws, culture, policies etc) for formulating the policies & strategies.
- 16. 3. Regiocentric approach Organization Structure Managing Director ↓ →→→ C E O ↓ ↓ SOUTH AFRICA ↓ ↓ ⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻↓ ↓ Mktg Mktg Mktg ↓ ( Lesotho) ( Kenya) ( Nambia) ↓ ↓⁻⁻⁻⁻⁻⁻⁻ ⁻ ↓⁻⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻↓⁻⁻⁻⁻⁻⁻⁻⁻↓ MGR MGR MGR MGR MGR R & D FIN PROD HRD MKTG
- 17. II BB AAPPPPRROOAACCHHEESS 4. Geocentric approach • Under this approach, the company analyses the tastes, preference and needs of the customers in all foreign markets and then adopts a standardized marketing mix for all the foreign markets. • Coca-cola adopted this strategy by selling its popular soft drink with the same content, packaging, branding & advertisement themes worldwide • Whirlpool designs a world-washer – small, stripped-down automatic washing machine for Mexico, Brazil & India. However, it modified its product for Indain market to wash the delicate “sarees”.
- 18. 4. Geocentric approach Organization Structure Managing Director Headquarters India ↓ ↓ ↓ ↓ ⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻ ↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻ ↓⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻⁻ ↓ Subsidiary Subsidiary Subsidiary Subsidiary India South Africa Kenya Nambia
- 19. MMOOTTIIVVAATTIIOONN TTOO DDOO II BB 1. Proactive: to increase profit to take advantage of product life cycle to achieve Economies of scale 2. Reactive: Competitive pressures Overproduction and excess capacity Declining domestic sales saturated domestic markets
- 20. NNEEEEDD FFOORR II BB 1. Achieve higher rate of profits 2. Expanding the production capacity beyond the demand of the domestic country 3. Availability of technology and managerial competence 4. Cost of manpower, transportation & Nearness to R/M 5. LPG Implt. 6. Market share
- 21. AADDOOPPTTIINNGG TTOO CCUUSSTTOOMMEERRSS NNEEEEDDSS 1. Products and Services should meet to foreign market 2. Price adjustments by considering the cost of foreign trade, such as transportation, taxes, exchange rate 3. Distribution system through existing transportation system, suppliers and stores 4. Promotion should be modified based on different languages, law, and culture from country to country
- 22. PPRROOBBLLEEMMSS IINN II BB 1. Political factors 2. High foreign investments and high cost 3. Exchange instability 4. Entry requirements 5. Tariffs, quota etc. 6. Corruption and bureaucracy 7. Technological policy 8. Quality Management
- 23. EENNTTRRYY SSTTRRAATTEEGGYY 1. Exporting • Indirect & Direct 2. Licensing • Agreement • Patent, trademark, copy right, technology, production processes, and product • licensee’s fee
- 24. EENNTTRRYY SSTTRRAATTEEGGYY 2. Franchising – by franchisers to franchisee – Usage 3. Foreign Assembly – Subsidiary – local assembly
- 25. EENNTTRRYY SSTTRRAATTEEGGYY 4. Turnkey Operation – Staff of an operating facility – foreign buyer 5. Foreign production subsidiary – Establishment – Purpose
- 26. EENNTTRRYY SSTTRRAATTEEGGYY 6. Foreign production subsidiary – Purpose of production 7. International Firm – Significant portion – In foreign countries
- 27. EENNTTRRYY SSTTRRAATTEEGGYY 8. Multinational Corporation – Parent country – host country 9. Joint Venture – Property rights
- 28. EENNTTRRYY SSTTRRAATTEEGGYY 10. Foreign Direct Investment – Arrangement in which a firm buys or establishes tangible assets – In another country – Through direct investment – By buying a company stock in capital markets
- 29. MMAAIINN BBAARRRRIIEERRSS 1. Cultural and social barriers 2. Legal and political barriers 3. Economic barriers:
- 30. AADDVVAANNTTAAGGEESS OOFF II BB 1. Faster growth 2. Access to cheaper inputs 3. Increased quality and efficiency 4. New market opportunities 5. Diversification
- 31. DDIISSAADDVVAANNTTAAGGEESS OOFF II BB 1. Increased costs 2. Foreign regulations and standards 3. Delays in payments 4. Complex organizational structure
- 32. RREEAASSOONNSS FFOORR RREECCEENNTT GGRROOWWTTHH IINN II BB 1. Expansion of technology 2. Business is becoming more global because •Transportation is quicker •Communications enable control from afar •Transportation and communications costs are more conducive for international operations 3. Liberalization of cross-border movements 4. Lower Governmental barriers to the movement of goods, services, and resources enable Companies to take better advantage of international opportunities
- 33. IINNTTEERRNNAATTIIOONNAALL OORRGGAANNIIZZAATTIIOONN • General agreement on Tariff and trade (GATT) – an international organization formed to reduce or eliminate tariff and other barrier to international trade • International Monetary Fund (IMF) – an international financial organization that lend money to countries in conducting international trade
- 34. IINNTTEERRNNAATTIIOONNAALL OORRGGAANNIIZZAATTIIOONN • World Bank – an international financial organization that lend money to underdeveloped and developing countries for development • Economic Communities – the creation of common economic policies – World Trade Organization (WTO) – European Community (EC) – North American Free Trade Agreement (NAFTA) – Asian Free Trade Agreement (AFTA)
- 35. Presented by - • Rahul Boddhul - MBA • UNIVERSITY of SOLAPUR TThhaannkk yyoouu !!