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International Business
Session Time Topics
One 1000 -1330Relevance in presentday environmentInfluences oninternational businessTypes of International
BusinessOrganizationsfacilitating internationalbusiness
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Levis
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Objectives
To define International Business
To understand factors that affectinternational business
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Organizational compulsions ofinternational expansion
Spreading of risk: Periodic cyclic downturnsand upward swings
To strengthen bottom line: Limitation ofdomestic population
To strengthen resource base: Increased in
inexpensive resource base
Personal ambitions of the policy making
body/individual: Bias
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Bandwagon Effect
Denial of First Mover Benefits to theCompetitors
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Technological developments and their
rapid diffusion at global scale
Dismantling of trade barriers
Emergence of business facilitators
Increasing limitation in terms of growth
presented by domestic markets
Influences on InternationalBusiness
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Conducting of InternationalBusiness
Goods
Services
Portfolio Capital
Direct Investment
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Exports and Imports
Visible exports and imports
Service exports and imports Tourism and Transportation Performing Services Assets Utilization
Portfolio Capital Marketable Securities Non - Marketable Investments
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Direct Investments
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Global and Multi Domestic
Organizations
Organization can be both
Global in some operational domains and
multidomestic in other operationaldomains
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Environments
Internal environments
External environments
Proximate environments
Distant environments
Constituents of external environments
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Environment & InternationalBusiness
Geography History
Psychology Economics
Social Sciences Legal system Political system
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The Perspective of
Competition
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Competitive Environment
Every firm operates within its competitiveenvironment
Competitive factors
1. Product Homogeneous
Compete more on price
Strategies emphasize cost saving by
Superior equipment, technology, economies of scale -Steel
Differentiated
Shakira and Pt. Ravi Shankar
Innovative
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2. Organization Size
Larger the organization
larger theresources relative to competitors
>Coke and Royal Crown
3. Market Size
Larger domestic market size invitescompetition less incentive for goinginternational
>Whirlpool from USSmaller market size needs expansionstrategy and investment in overseasmarkets
> Electrolux from Sweden
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4. Nature of Competition
International Boeing and Airbus
Local
Wal Mart in India competing with next door
grocer
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Firm Process ofInternationalization
Innovative Related Models
Sequential development
No regular export activity
Export through independentrepresentatives or agents
Establishment of an overseas salessubsidiary
Overseas production facility
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Psychic Distances
Uppsala Models
Totally disinterested firm
Partially interested firm Exploring firm
The experimental firm, undertaking
exports on experimental basis Experienced small exporting firm
Experienced large exporting firm
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Leapfrogging
Extent and intensity of commitment Transferability of experiential
knowledge
Collaborative arrangements
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Environmental ForcesComplicating Decision-makingin International Business
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