International Business Chapter 1 IB chap2 - Summary International Business Arab spring - Lecture notes 1 Chapter 3 Exam 2 In class notes. Preview text Download Save. D Chapter 1 Notes - Summary International Business. Course: Global Business Analysis (BUS-D) Chapter 1: Jul 24, · Other related documents Seminar assignments - B&J final paper Summary - Lecture notes and book summary International Business - Includes all the lecture notes from the semester. Material that helps to study for the exam Gbm Chapters summaries D Ch 2 Notes - Summary International Business International Business Chapter 4: National Differences5/5(48) International Business: Competing in the Global Marketplace Charles W. L. Hill Chapter 1 This chapter sets the scene for the rest of the book. We have seen how the world economy is becoming more global, and we have reviewed the main drivers of globalization and argued that they seem to be thrusting toward a more tightly integrated global economy
Summary international business - International Business - Stuvia
Jump to navigation. trade exports and imports and foreign direct investment, international business summary. It is very useful in order to satisfy the needs of companies and private households, international business summary. Multinational Enterprises MNEs — these are organizations that have their headquarters in one particular country, but do business in one or more other country. This creates an extended arena for international trade since it supports international business.
Exports — these are goods and services that are being produced in one country and then traded to another country, international business summary.
In order to maintain a positive balance of trade, a company should always export more than it imports. Imports — this includes goods and services that are being produced in one country and then brought in by another country. The basis of international business is trade which contributes to the understanding of MNE strategies and practices. Exports and imports are the motor of international trade and enhance worldwide interaction international business summary countries and businesses.
If they were to decrease, the world economy would suffer grandly from that. Foreign Direct International business summary FDI — FDI are equity funds invested in other countries by MNEs. FDI is often used by organizations to gain a foothold in other markets by obtaining firms in different countries or by operating in foreign markets. Especially companies from the US have invested greatly into several countries Western Europe, Latin and North America and Japan.
FDI is an essential factor when it comes to international trade because it helps, for example, less developed countries to establish worldwide trade relationships. Triad — these are geographic areas the US, international business summary, the EU and Japan that play a crucial role in international trade. They are responsible for most of the trade international business summary investments that take place worldwide. Further, when the US is important as a triad member, Mexico and Canada are usually included into the considerations.
North American Free Trade Agreement NAFTA — The NAFTA is a free trade agreement between international business summary US, Canada and Mexico which was founded in It has the purpose to abolish trade and investment barriers between those three nations. Followed by the EU, whose collective GDP is larger than that of the US or Japan. Japan is the greatest economy in Asia and is a grand investor into the US and the EU. Countries from the triad practice more trade and FDI than any other economy, international business summary.
The global environment has rapidly been changing in recent years and the reasons for this fact are: A - A slowdown in the triad economies B - The introduction of additional trade regulations C - The impact of technology D - More small and medium-sized multinationals A - In the s the US held a fast growing and healthy economy and became the most competitive nation in the world.
After the Clinton-era, the triad and other countries started to suffer from economic problems. Organization for Economic Cooperation and Development OECD — an organization with 30 moderately wealthy member countries that assists its members, if economic difficulties evolve. This is done in form of a forum in which economic problems and their solutions may be discussed. B — The development of a liberalization in trade and investment helped organizations in the triad countries to improve their profits in international business summary markets.
In case of a trade conflict between countries, international organizations were formed to regulate international trade. World Trade Organization WTO — the WTO is a worldwide organization that was founded in It deals with the rules of trade and smoothing out conflicts among member countries; furthermore, the WTO is allowed to enforce its decisions.
General Agreement on Tariffs and Trade GATT — the GATT is a trade organization that was created in Its purpose was to liberalize trade and negotiate trade concessions among member countries Nowadays the WTO implements the provisions of GATT.
If conflicts arise among member countries, the WTO supports problem solving. If nations disagree with decisions made by the WTO, harsh consequences such as trade retaliation may be the result.
Due to trade liberalization though, disputes among countries should be eliminated because it encourages international business transactions. C — Technology is a constantly developing area and especially communication technology is of international business summary importance to many businesses and in certain markets.
The use of computers, the internet, as well as cellular technology makes it possible for firms to remain in continuous contact with their office and their customers, international business summary. This enhanced communication is essential for individuals since it eases conducting business. Through technology the production of goods and services is enhanced. These are quality measurements that have been created in order to ensure high quality, international business summary, as well as remove performance difficulties.
D — Small and medium-sized enterprises SMEs — the definition varies depending on the country. In the US, international business summary, SMEs have up to employees; in Japan SMEs in industry have up to employees, international business summary, those in the wholesale industry have up to employees, and those in the retail industry up to 50 employees.
Due to the fact that many SMEs have a well-trained workforce, are highly innovative and apply the latest technology, they can compete effectively and are very flexible in comparison to larger firms, international business summary.
These points are important for SMEs because they rely heavily on their customers and therefore focus on cost control and quality. Facts about MNEs:. Strategic Alliance — this is a relationship between two or more businesses in order to attain a communal advantage.
This has become popular since MNEs started to recognize the importance of creating regional and local strategies. In order for a business to stay competitive it needs to be continuously innovative.
The ability of a firm to gain success by doing so depends on four determinants developed by Michael Porter:. Strategic Management — managerial actions including strategy formulation, international business summary, implementation, evaluation, international business summary, and control. Also assessment of organizational strengths and weaknesses and environmental analysis of internal and external circumstances is a task in strategic management.
Multinational Enterprise MNE — an MNE is a company with its headquarters in one nation, but it operates in one or more other nations.
MNEs are essential organizations for international trade. Characteristics of MNEs: To identify the international business summary of such an enterprise it is useful to look at the environment in which it is active. More clearly, this is the home country where the headquarters are located and the host country in which it operates. Internationalization — when a international business summary penetrates a foreign market, this process is called internationalization, international business summary.
In order to stay away from risk and information costs, the internationalization process should be implemented carefully, as well as step-by-step, supported by experts in international trade that are not employees of the organization.
License — a contractual agreement between two firms. One business, which is called the licensor, allows another one, the licensee, to make use of its patents, technology or trademarks in return for a fee or royalty.
Licensor — a company giving the licensee access to its patents, technology or trademarks and therefore receiving a fee or royalty. B — A sales representative may then be used in order to international business summary a sales subsidiary in a particular foreign market, giving the company the possibility to expand its capacity for more exports. Furthermore, the sales representative may then set up a separate export department to administer foreign sales and production, international business summary.
In addition, the production process, as well as the product design may then be adapted to manufacture tailor-made products for these foreign markets. C — Moreover, in order to engage in local assembly and packaging of its products, the business may begin employing host-country workers and start dealing with working conditions of its host-country. This is a critical action since the enterprise starts to become more familiar with the foreign markets and has to begin dealing with cultural attitudes, worker expectations, and wage rates.
D — After gaining adequate knowledge about its host-country, and therefore reducing the perceived risk, the company may regard a foreign direct investment as appropriate. International business summary means, that the entire production process of the product line is being moved to the host-country and sales are generated there as well.
There are several reasons for a company to become a multinational enterprise: A — Companies may diversify risk by investing in separate markets. By spreading international business summary risk this way, negative economic developments in the home-country may be compensated. B — Engaging in the world market in order to sell goods and services is a reason for a firm to become an MNE. This action is associated with the process of globalization, international business summary, meaning there is growth in an integrated world market.
C — Enterprises may feel the need to respond to the increasing number of foreign competitors in order to defend their home market share, international business summary. D — The issue of reducing costs is another important reason for companies to become an MNE. This also makes the firm more flexible in reacting to customer needs.
E — Firms may want to become an MNE in order to overcome barriers to entry. These include tariffs, quotas tariff and non-tariff barriers and can be avoided by supplying a market from within. F — Having technological experts work with the company is an advantage when operating as a MNE, international business summary. Due to the direct manufacturing of goods International business summary rather than making license agreements, international business summary, the firm can maintain their exclusive rights concerning patents, international business summary, trademarks, and technological expertise.
In general, MNEs make decisions concerning their operations based on what is best for the company. Since many MNEs hire workers in several different countries, every business has a great responsibility concerning the economies of other nations, international business summary. The process of Strategic Management: The steps in the process of strategic management need to be conducted carefully. The outcome of the process helps the MNE to create a strategic plan which supports the MNE to be able to compete successfully in international international business summary. Further, an environmental analysis of internal and external conditions of the environment is crucial in order to be able to take the process to the next level.
After completing these analyses, the actual implementation process starts. A periodical assessment of the new strategy in action is very important in order to confirm the success of the strategic plan. International business summary problems concerning the implementation arise, the operations should be adjusted or the plan may be revised.
It can also be called a proprietorial capability, which is also unique. These advantages can be based several factors like the labour force of a country, or the natural endowments. Managers hope to strike a balance between two factors, in order to be in a unique space. The matrix consist of 4 quandrants, each with a corresponding generic strategy.
Triad — three geographic areas consisting of the US, international business summary, the EU and Japan that deal with most of all trades and investments worldwide. Foreign Direct Investment FDI — if firms have ownership in foreign countries or control of foreign assets, this financial involvement is called foreign direct investment FDI.
This ownership of a business in another country may either be whole or partial and is called a foreign subsidiary. Investments can be made by overtaking an already existing company or by building up a new company while working with joint ventures or complete ownership in foreign countries.
The purpose of FDI is for the investing firm to be able to actively take part in managing the foreign company in order to get a foothold in the host-market. Portfolio Investment — this is the purchase of financial securities e. The purpose of a portfolio investment is for the investing firm to be able to gain financial growth in the value of its financial holdings in the foreign company. There are several reasons for companies to make FDIs and portfolio investments: A - The increase of sales and profits.
INTERNATIONAL BUSINESS - Chapter 1 Summary
, time: 12:00International business summary book and lecture notes - International Business - Stuvia
English summary for the course International Business of the bachelor Business Administration at the UvA. It includes all the required chapters and additional lecture notes. Book: International Business: Competing in the Global Marketplace 12th edition. Charles W. L. Hill Thomas M. Hult 9 International Business: Competing in the Global Marketplace Charles W. L. Hill Chapter 1 This chapter sets the scene for the rest of the book. We have seen how the world economy is becoming more global, and we have reviewed the main drivers of globalization and argued that they seem to be thrusting toward a more tightly integrated global economy Introduction to International Business. With the globalization of the world economy, there has been a concomitant rise in the number of companies that operate globally. Though international business as a concept has been around since the time of the East India Company and continued into the early decades of the 20th century, there was a lull in the international expansion of companies because of the Two
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