KAMAL KUMAR M.Phil, MBA, M.Com.

1. INTERNATIONAL BUSINESS
MANAGEMENT
UNIT - 1

2. INTRODUCTION
International Business conducts business
transactions all over the world. These transactions
include the
 transfer of goods, services, technology,
managerial knowledge, and capital to other
countries.
 International business involves exports and imports.
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3. INTERNATIONAL BUSINESS
International business is defined as commercial
transactions that occur across country borders.
When a company sells products in the US, Japan
and throughout Europe, this is an example
of international business.
All commercial transactions—including sales,
investments, and transportation—that take place
between two or more countries
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4. DEFINATION OF INTERNATIONAL
BUSINESS
• IB means carrying on business activities( like
goods, capital) beyond national boundaries.
• IB is defined as the organization that buys /sell
goods and services across two or more
national boundaries, even if management is
located in a single country.
• International Business is also known as Global
Business
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6. NATURE OF INTERNATIONAL BUSINESS
 Involvement of commercial activity
 Surrounded with political risk
 Proactive or Reactive
 Differs from domestic business
 Large scale operations
 Sensitive nature
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7. FEATURES
 Large scale operations
 Integration of economies
 Focus by developed countries and MNCs
 Benefits to participating countries
 Keen competition
 Special role of technology
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8. IMPORTANCE OF
INTERNATIONAL BUSINESS
 Increased socio –economic welfare
 It opens new opportunities
 It gives new technologies
 Optimum utilization of resources
 Provides quality products
 It helps in earning foreign exchange
 High living standards
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9. MODES OF OPERATION IN INTERNATIONAL
BUSINESS
 Merchandise exports and imports
 Service exports and imports
 Tourism and Transportation
 Service Performance
 Asset Use
 Investments
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10. TYPES OF INTERNATIONAL BUSINESS
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Export-import trade
Foreign direct
investment
Licensing
Franchising
Management contracts

11. EXPORT-IMPORT TRADE
An import in the receiving country is an export from
the sending country.
Importation and exportation are the defining financial
transactions of international trade.
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12. FOREIGN DIRECT INVESTMENT
A foreign direct investment (FDI) is a controlling
ownership in a business enterprise in one country
by an entity based in another country.
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13. LICENSING
A business arrangement in which
one company gives
another company permission to
manufacture its product for a specified
payment . There are few faster or more
profitable ways to grow your business than
by licensing patents, trademarks,
copyrights, designs, and other intellectual
property to others.
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14. FRANCHISING
 According to the International Franchise
Association (IFA), franchising is defined as an
agreement or license between two legally
independent parties which gives:
 A person or group of people (the franchisee) the
right to market a product or service using the
trademark or trade name of another business (the
franchisor)
 The franchisee the right to market a product or
service using the operating methods of the
franchisor
 The franchisee the obligation to pay the franchisor
fees for these rights
 The franchisor the obligation to provide rights and
support to franchisees
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15. MANAGEMENT CONTRACTS
 Agreement between investors or owners of
a project, and a management company hired for
coordinating and overseeing a contract. It spells out
the conditions and duration of the agreement, and
the method of computing management fees.
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16. INTERNATIONAL BUSINESS
ENVIRONMENT
 Economic environment( per capita/economic
development)
 Legal environment(methods to regulate business
practices)
 Political environment( changes in government
policies)
 Social environment( importance of society)
 Cultural environment(beliefs ,values)
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17. ENVIRONMENTAL CHALLENGES OF
INTERNATIONAL MANAGEMENT
 Economic system: most
countries today are
moving toward market
economies.
 Natural resources:
different countries have
various availability of
natural resources.
 Infrastructure: the
schools, hospitals, power
plants, railroads,
highways, ports,
communication systems,
air fields, and commercial
distribution systems of a
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18. ENVIRONMENTAL CHALLENGES OF
INTERNATIONAL MANAGEMENT
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19. RECENT CHANGES IN INTERNATIONAL
BUSINESS
 Total world trade declined dramatically after
2000, but is again on the rise.
 The rate of globalization is accelerating.
 Regionalization is taking place, resulting in
trading blocs.
 The participation of countries in world trade is
shifting.
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20. GLOBALIZATION
 Because of globalization, for the first time in history,
the availability of international products and services
can be accessed by individuals in many countries,
from diverse economic backgrounds.
 Globalization means integration with the world economy .
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21. THE GLOBAL ECONOMY
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22. COMPONENTS OF
GLOBALIZATION
 Globalization of markets
 Globalization of production
 Globalization of Investment
 Globalization of Technology
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23. GLOBALIZATION OF MARKET
 Refers to the process of integrate the world market
in to a single market
 Ex- A no of consumers products have global
acceptance like coca –cola, Pepsi, levis jeans.
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24. REASONS FOR GLOBALIZATION OF MARKET
 Increase profits
 Growth opportunity
 Risk reduction
 Competition
 To cater the demand of the foreign market
 Mass production
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25. TRENDS IN GLOBALIZATION
 Cooperation among countries
 Liberalization of cross border movements
 Transfer of Technology
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31. BENEFITS OF GLOBALIZATION
 Increase in Employment & Income
 Balanced Human development
 Lower price with higher quality
 Free flow of technology
 Increase in production and consumption
 Transportation
 Goods and services
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32. PROCESSES OF GLOBALIZATION (CONT’D)
 Strategic alliance: a
cooperative arrangement
between two or more firms for
mutual gain.
 Joint venture: a special type of
strategic alliance in which the
partners share ownership of a
new enterprise.
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33. PROCESSES OF GLOBALIZATION (CONT’D)
 Direct investment: when a firm headquartered in
one country builds or purchases operating facilities
or subsidiaries in a foreign country.
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34. THANK YOU…
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