An Overview of International Business

Learning objectives

  1. Discuss the meaning of international business
  2. Explain the importance of understanding international business
  3. Identify and describe the basic forms of international business activities
  4.  Discuss the causes of globalization
  5.  Comprehend the growing role of emerging markets in the global economy

What is international business?

International business consist of business transactions between parties from more than one country.

Why study international business?

  1. Catching up with foreign assignment
  2. Compete successfully with peers and future competitors
  3. Running your own SMEs
  4. Obtain cultural literacy
  5. Stay abreast of the latest business and tools


Why does company go global?

Leveraging core competency

Acquiring resources and supplies

Seeking new markets

Minimize risks ; and

Competing with rivals

Reasons for increased growth in globalization

Increase in and expansion of technology

Liberalization of cross-border trade and resource movements

Development of services supporting IB

Growing consumers pressures

Increased global competition

Changing global political situation

Expanded cross-national cooperation.

Contemporary causes of globalization

What is globalization?

Manifestation of globalization

Intensification of the role of international trade

Growing importance of FDI (Foreign Direct Investment)

Causes of globalization

Strategic imperatives

The environmental causes of globalization

Globalization emerging markets.

Contemporary causes of globalization

Contemporary causes of globalization:

Strategic imperatives: 

Leveraging a firm’s core competencies

Acquiring resources at low cost

Expanding into new markets

Competing with industry rivals 

Environmental causes: 

Changes in the political environment

Reduction of trade and investment barriers

The collapse and policy changes undertaken by China and India

Changes in the technological environment

Advances in transportation

Improvements in information processing

Changes in communication technology 

Globalization and Emerging Markets

Review questions:

What is IB? how does it differ from domestic business?

Why it is important for you to study IB?

What are the basic forms of IB activity?

How do merchandise exports and imports differ from service exports and imports?

What is portfolio investment?

What are the basic reasons for the recent growth of international business activity?

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