International business 5e griffin chapter 1

an overview of international business international business, 5th edition chapter Chapter Objectives • Discuss the meaning of international business • Explain the importance of understanding international business • Identify and describe the basic forms of international business activities • Discuss the causes of globalization • Comprehend the growing role of emerging markets in the global economy 1-2 The Business of the Olympics 1-3 The Business of the Olympics • Intense reflection of international business • Government of games by IOC • Competition for hosting • Revenue sources for the Olympics – Broadcast rights – Corporate sponsorships 1-4 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 1-5 How Does International Business Differ from Domestic? • Currency conversion • Legal systems • Culture • Availability of resources 1-6 Why Study International Business? • Large organizations • Foreign-owned subsidiaries • Small businesses • Competitors • Business techniques and tools • Cultural literacy 1-7 International Business Activities • Exporting and Importing • International Investments • Licensing, Franchising, and Management Contracts 1-8 Exporting and Importing • Exporting: selling of products made in one’s own country for use or resale in other countries • Importing: buying of products made in other countries for use or resale in one’s own country 1-9 Figure 1.1 Exports as a % of GDP 1-10 Visible and Invisible Trade • Trade in Goods – Merchandise exports and imports – Visible trade • Trade in Services – Service exports and imports – Invisible trade 1-11 Exporting at Boeing 1-12 International Investments • Capital supplied by residents of one country to residents of another • Two categories: – Foreign direct investments – Portfolio investments 1-13 Other Forms of International Business Activity Management contracts Licensing 1-14 Franchising Variations of Organizations Multinational Corporation Multinational Enterprise Multinational Organization 1-15 Multinational Corporations (MNCs) • Engage in foreign direct investment • Own and control foreign assets • Buy resources in multiple countries • Create goods and services in multiple countries • Sell goods and services in multiple countries 1-16 Table 1.1 The Largest MNCs 1-17 • ExxonMobil • Chevron • Wal-Mart • DaimlerChrysler • Royal Dutch Shell • Toyota Motor • BP • Ford Motor • General Motors • ConocoPhillips Motives for Globalization • To leverage core competencies • To acquire resources and supplies • To seek new markets • To better compete with rivals 1-18 Environmental Change and Globalization Changes in Political Environments 1-19 Technological Changes Figure 1.2 World Exports as a % of World GDP 1-20 Figure 1.3 Foreign Direct Investment Relative to World GDP 1-21 Globalization and Emerging Markets 1-22 • Argentina • Mexico • Brazil • Poland • China • South Africa • India • South Korea • Indonesia • Turkey Framework of Book • The World’s Marketplaces • International Environment • Managing International Business • Managing International Business Operations 1-23 .. .Chapter Objectives • Discuss the meaning of international business • Explain the importance of understanding international business • Identify and describe the basic forms of international business. .. compete with rivals 1- 18 Environmental Change and Globalization Changes in Political Environments 1- 19 Technological Changes Figure 1. 2 World Exports as a % of World GDP 1- 20 Figure 1. 3 Foreign Direct... Governmental agencies 1- 5 How Does International Business Differ from Domestic? • Currency conversion • Legal systems • Culture • Availability of resources 1- 6 Why Study International Business? • Large