Documente Academic
Documente Profesional
Documente Cultură
1-2
Why you need International
business experience
1-4
DISCUSSION
1-5
1-5
Get money from International business
L/C usance 5
years
Argribank Well
fargo
Epco N. export
Co.
$ 2 mill. x ( 9% -3%) x 5 years = $ 600.000
1-6
1-6
Why Is IB Different?
LO5
1-7
1-7
Why Is IB Different?
LO5
1-8
1-8
Why Is IB Different?
LO5
1-9
1-9
International business philosophy
Chinese
product will
be used by
Japanese each person
product will in the world
appear in
each family
in the world
Chinese thinking:
- focuson
manufacturing
We are Japanese
thinking: Mass
strongest production,
Japanese
type of national
business such trademark first
American
thinking: as: Integrated
Export,
production,
franchising, Keizen model,
Foreign JIT model…
Investment
1-10
1-10
11
1-11
1-11
Object, scope of IB course
Object:
all transactions in business move cross-border
(not frontier).
Scope:
- micro-economics
- Business only
- export goods and services, foreign
investment
1-12
1-12
TEXT BOOK
- Ball D. A, Geringer J. M, Minor M.
S, McNett J. M, (2013), International
Business – The Challenge Of Global
Competition, McGraw-Hill/Irwin.
Ref.Book:
Wild, J. J, Kenneth L. Wild, J. C. Y.
Han (2000), International Business: An
Integrated Approach, Prentice Hall,
New Jersey 07458.
Structure of IB text book
International business
management
National
environment
Foreign
environment
International
environment
1-14
1-14
Group requirement
1. Each group is 3 or 5 only
2. Chief of group is based on volunteer spirit. The
chief need to train leading skill by judging
member of team.
3. Member of group need to train the working team
skills. If don’t make a fit group, you can set up a
new team or move other group but not later than
10th week
4. Individual grade will not be the same for each
member, base on your effort
5. Presentation time is 10 min, Q&A is 10 min only 1-15
1-15
Leaning method and assignment
1-16
1-16
Make up individual grade
1-17
Chapter One
McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
1-19
International Business Terminology
LO1
1-20
1-20
International Business Terminology
International Business
A business whose activities are carried out across
national borders
(It is economics border, sometime it is legal border)
Foreign Business
The operations of a company outside its home or
domestic market
Multidomestic Company
An organization with affiliates in many countries
Each formulates its own business strategy
Strategy based on perceived differences in
markets
LO1
1-21
1-21
International Business Terminology
Global Company
Attempts to standardize and integrate operations
worldwide in most or all functional areas
International Company
Denotes a global or multidomestic company
LO1
1-22
1-22
Global Company or export Company
1-23
1-23
History of
International Business
Early traders
before and early BC Mesopotamian, Phoenician and
Greek merchants
China stimulated the emergence of an internationally
integrated trading system
“all roads lead to China”
Ottoman Empire before 1300
17th Century mercantilism/colonialism, China was
manufacturing country about 1800 years & replaced by
Britain in 1840.
British East India Company Dutch East India Company
Portugal and France
Singer sweing Machine built factory in Scotland 1st of FDI1-24
1-24
Globalization
1-25
Globalization’s Outcome: Globality
LO2
1-26
1-26
GDP growth rate in the world
2020f
Citeria 2015 2016 2017 2018e 2019f
Real GDP1
World 2.8 2.4 3.0 3.1 3.0 2.9
Advanced Economies 2.2 1.6 2.3 2.2 1.9 1.7
United States 2.9 1.5 2.3 2.5 2.2 2.0
Euro Area 2.1 1.8 2.4 2.1 1.7 1.5
Japan 1.4 0.9 1.7 1.3 0.8 0.5
Emerging Market and
3.6 3.7 4.3 4.5 4.7 4.7
Developing Economies (EMDE)
Other EMDE excluding
5.2 4.9 5.1 4.8 5.1 5.1
China
China 6.9 6.7 6.8 6.4 6.3 6.2
East Asia and Pacific 6.5 6.3 6.4 6.2 6.1 6.0
Europe and Central Asia 1.0 1.7 3.8 2.9 3.0 3.0
Latin America and the
-0.6 -1.5 0.9 2.0 2.6 2.7
Caribbean
Source: World Bank. Notes: PPP = purchasing power parity; e = estimate; f = forecast. 1-27
1-27
The world’s GDP
Total GDP: $ 77.269 Bill. In 2013
No. Nation GDP No. Nation GDP
LO2 1-29
1-29
Globalization Forces
Globalization is a result of
Political forces that
reduce barriers to trade and foreign investment
by governments
induce privatization of industries of former
communist nations
Technological forces that
lead to advances in computers and
communications technology
allow low cost network computing and ubiquitous
Internet collaboration across borders
LO2
1-30
1-30
Globalization Forces
Globalization is a result of
Market forces
lead to globalizing companies’ need for their suppliers to
globalize too
allow easier revenue seeking activity abroad due to home
market saturation
Cost forces
demand economies of scale -- product line and manufacturing
-- to reduce unit costs
lower cost production factor seeking efforts in other countries
Competitive forces
more intense due to explosive growth internationally of small
and new businesses
LO2
1-31
1-31
Fobe 500 in 2005, 2008, 2011 and 2013
No. No. of firms
Nation
2005 2008 2011 2013
1. Mỹ 176 153 133 128
2. Nhật 81 64 68 57
3 Pháp 39 39 35 31
4 Đức 37 37 34 28
5 Anh 37 34 30 26
6 Trung Quốc 16 29 61 95
7 Hàn Quốc 11 15 - 17
8 Thụy Sỹ 11 14 - 13
9 Hà Lan 14 13 - 13
10 Canada 13 14 - 10
1-32
1-32
Globalization Forces
LO2
1-33
1-33
Globalization Forces
1-34
1-34
Comparation of GDP and turrnover of
MNC’s in 2013
Nước/ Công ty GDP/ Doanh số(Triệu USD)
25.Na Uy 512.580
(1)Royal Dutch Shell 481.700
26.Bỉ 508.116
(2)Walmart Stores 476.294
27.Venezuela.RB 438.284
(3)Exxon Mobil 449.886
28. Áo 415.672
(4)Sinopec Group 428.167
29.Thái Lan 387.252
(5)China National Petroleum 408.630
30. Các tiểu Vương quốc ArậpThống nhất (United 383.799
Arab Emirates)
(6) BP 388.285
31.Columbia 378.148
32. Iran. Islamic rep 368.904
33.Nam Phi 350.630
(7)State Grid 333.386
34.Đan Mạch 330.614
35.Malaysia 312.435
36.Singapore 297.941
37.Israel 291.357
38.Chi Lê 277.199
39.Hongkong SAR. Trung Quốc 274.013 1-35
(8)Toyota Motor 265.702
(9)Wolkswagen 247.613 1-35
What is International Business?
International Business (IB): any business transaction across
national borders
Trade in goods
Cross-border services
consulting, advertising, legal, financial, accounting
tourism, banking, communications/media, construction
management, etc.
Company activity inputs may involve IB activity even if outputs
do not
Firm’s revenues may come entirely from the home country
Key raw materials, knowledge, processes may come
partially or entirely from other countries
LO3
1-36
1-36
Ways A Company
May Be Internationalized
A company can become internationalized when
its top managers come from different countries
it operates abroad through subsidiaries, joint
ventures, or strategic alliances
it generates revenues, owns assets, or employs
people in many countries
it raises capital in financial markets abroad
it has major shareholders from many countries
LO3
1-37
1-37
Ways A Company May Be Involved
in International Business
1-38
Mercantile exchage
Spot exchange:
Forward exchange:
Hedging:
The famer will make decision by CME’s
information.
1-39
1-39
CME activities
Spot 1/2014 Forward 4/2014
Where
410$/rice 400$/rice does
62$/cabbage risks
60$/cabbage go?
Why
Rice: 300$ x Price:
can
1.000tons up –pull (Bull)
Specul
Cabbage: 58$ Down – bear
x3.000tons ation
(bear)
I will choose guys
rice. get
money
Risks
Speculation
buyer or seller 1-40
1-40
Practices requirement: business practice
in Chicago Merchant Exchange (CME)
1. Get in
http://www.cmegroup.com/trading/commoditie
s/grain-and-oilseed/corn.html
2. Condition:
- Each person get 40 $ million;
- Price swings: not over 10% of nominant price
- Over Amount of money will be cancelled
- Transaction fees is $ 3.000
1-41
1-41
Sample of CME transaction
Prior Hi /
Month Charts Last Change Open High Low Volume Updated
Settle Lo Limit
Mar 2010
1-42
1-42
Rapid Growth of
International Business
The rapid growth of international business is a result
of
dramatic increases of foreign direct investment
(FDI) and exports
FDI: A firm invests in equipment, structures,
and organizations in another country while
retaining significant management control
Exports: Sale and transfer of any good or
service from the firm’s home country to another
country
LO3
1-43
1-43
Rapid Growth of
International Business
LO3
1-44
1-44
Globalization Debate
Supporting Free Trade
Free trade
enhances socioeconomic development
promotes more and better jobs
LO3
1-45
1-45
Concerns With Globalization
LO3
1-46
1-46
Environment of
International Business
LO4
1-47
1-47
External Forces That Affect IB
Due To Cross-Border Differences
1. Competitive
Competitor kinds, number, locations, activities
2. Distributive
National and international agencies that
distribute goods and services
3. Economic
Factors such as GNP, unit labor cost, and
personal consumption expenditures that matter
to business and vary among countries
LO4
1-48
1-48
External Forces That Affect IB Due
To Cross-Border Differences
4. Socioeconomic
Characteristics and distribution of human
population
5. Financial
Interest rates, inflation rates, and taxation
6. Legal
Foreign, domestic, and international laws
governing a firm’s IB operations
7. Physical
Natural elements: natural resources (i.e.,
factors of production), topography, climate
LO4
1-49
1-49
Difierences in Legal
1-50
1-50
External Forces That Affect IB Due
To Cross-Border Differences
8. Political
Government forms, international organizations
9. Sociocultural
National culture similarities or differences that
affect international managers
10. Labor
Composition, skills, attitudes of labor
11. Technological
Technical skills and equipment that affect how
resources are converted to products
LO5
1-51
1-51
Diffirences in Politics
1-52
1-52
Internal Forces That Managers Can
Influence Across Borders
Factors of production
Capital, raw materials, people
Activities of the organization
Personnel management, finance,
production, marketing
LO5
1-53
1-53
Workers in the world
1-54
1-54