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INTERNATIONAL BUSINESS

MANAGEMENT

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INTRODUCTION

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Why you study?

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1.Knowledge to work in MNCs

2.Products have gone global

3.Operational efficiency of global business in the

hands of managers4.Role of different global agencies like WTO, World

bank liberalisation capitalism

5.World global village BRIC

6. IB executive play a powerful role relativecompetitiveness of various countries

7.To study best management techniques lessons

from debacle.

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Agenda

1. To understand the history of IB2. Defining International Business

3. Importance of IBM?4. Why to go international?

5. International Orientation

6. Stages of development7. Strategic decisions.

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Evolution

Sumerians in eastMesopatomians Southern Babylon

Arabia, Egypt, Greece,

Asia Minor, Romans,

Mediteranean, dutch, English

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When a business is said to be international

Globalisation

of capital

Globalisation

of corporate

mindset

Globalisation

of market

presence

Globalisation

of supply

chain

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What is International Business?

Business transactions between parties from

more than one country

Parties may include

Private individuals

Individual companies

Groups of companies

Governmental agencies

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International business consists of

transactions that are devised and carriedout across national borders to satisfy the

objectives of individuals, companies, and

organizations.

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International business management is defined as aprocess of accomplishing the global objectives of afirm by:

effectively coordinating the procurement, allocation,and utilization of the human, financial, intellectual,and physical resources of the firm and across nationalboundaries, and

effectively charting the path towards the desiredorganizational goals by navigating the firm through aglobal environment that is not only dynamic butoften very hostile to the firms very survival.

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Why to go international / Importance

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1.Profit advantage

2.Growth opportunities

3.Domestic market constraints4.Competition

5.Govt. policies and regulations

6.Monopoly power7.Spin-offs of international business, white skin

advantage.

8.Strategic vision.

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Profit advantage

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c

c1

Q1Q

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International Orientation

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1.Ethnocentrism (home country orientation)

2.Polycentrism (host country orientation)

3.Regiocentrism (regional orientation)4.Geocentrism (world orientation)

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Characteristics ethono poly regio Geocen

management Home country Host country Regional

orientation

Global

orientation

Perception on

market

Focus on the

similarities

Extension of

domestic

Focus on the

differences

Differentiated

and delineated

World is single

market

Marketing

strategy

Extension of

domesticstrategy

Localization Trade-off

between previousboth.

Global

standardization

Merits

No cost and

effort of

localisaiton

Adaptation

better

exploitation of

market

Both the

advantages are

taken

Economies of

scale

Easy route to

internationalisait

on

Advantages of

pace

Demerits

Limits the scope

of international

High costs

Delays

associated withadopta.

Neglect of intra-

regional

differences

Unsuitable in

many cases

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What drives to go

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1. Huge markets in developing countries

2. Taking advantage of advantages of labor, resources,technology

3. Changing demographics and growth of globalisation

4. Regional trade blocks adding to pace

5. Reducing the trade and investment barrier6. Technology

7. Rapid developing economies. growth, cost adv.,

development of talent and capabilities, migration of

customers, RDE based global competitors.8. Money in international business

9. Availability of resources

10.Support of world institutions and regulation by WTO

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Evolutionary Stages

From domestic to international

Stage 1: Foreign Inquiry

Stage 2: Export Manager

Stage 3: Export Department and Direct Sales Stage 4: Sales Branches and Subsidiaries

Stage 5: Assembly Abroad

Stage 6: Production Abroad Stage 7: Integration of Foreign Affiliates

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The Historically Indigenous Firm

Cost-ReductionMotives

StrategicMotives

Market-Seeking

Motives

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Strategic decisions in intl. business

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Market potential

Price

ProductPromotion

Environmentalfactor

Company resourcesCompany Objective

Distribution

Internation

al Business

decision

Entry and operating decision

Market Selection decision

Marketing

Mix

Decision

International organization and HR decision

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See you again

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