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Presented by Sugihar to, SH. MM

© SUGIHARTO, SH.MM GICI Business School
International Business - all
commercial transactions between
two or more countries
Involves modes of business that
differ from those at the
domestic level
Foreign conditions diversity
company’s external
environment

© SUGIHARTO, SH.MM GICI Business School
International business
consists of transactions that
are devised and carried out
across national borders to
satisfy the objectives of :

INDIVIDUALS
COMPANIES
ORGANIZATIONS

© SUGIHARTO, SH.MM GICI Business School
Causes the flow of ideas, services,
and capital across the world
Offers consumers new choices
Permits the acquisition of a wider
variety of products
Facilitates the mobility of labor,
capital, and technology

Provides challenging
employment opportunities
Re-allocates resources, makes
preferential choices, and shifts
activities to a global level
© SUGIHARTO, SH.MM GICI Business School
Will an idea, good, or service fit
into the international market
Should trade or investment be used
to enter a foreign market
Should supplies be obtained
domestically or abroad
What product adjustments are necessary
to be responsive to local conditions
What are the threats from
global competitors
© SUGIHARTO, SH.MM GICI Business School
© SUGIHARTO, SH.MM GICI Business School
Expand sales greater purchasing
power in the world as a whole
Acquire resources of products,
services, components
also, foreign capital, technologies,
information
Diversify sources of sales and
supplies, takes advantage of business
cycle differences among countries

Minimize competitive risk to prevent
competitor from gaining advantages
© SUGIHARTO, SH.MM GICI Business School
EXPANSION OF TECHNOLOGY
transportation and communication are quicker and
less costly
Liberalization of cross-border movements

Government barriers reduced because:
desire for better access to greater variety
of goods and services
domestic producers forced to be more
competitive
lowered trade barriers to their own exports
Development of supporting services by business
and governments to:

© SUGIHARTO, SH.MM GICI Business School
Development of supporting services by
business and governments to:
Ease the flow of goods and
services sold abroad
Reduce risks of International
Business

Increase in global competition,
the firms have become more
global to maintain
competitiveness

© SUGIHARTO, SH.MM GICI Business School
j
MERCHANDISE EXPORTS
AND IMPORTS

Are the most common international
economic transaction, especially for
smaller companies. And …
Major source of international revenue
and expenditures for most companies
SERVICE EXPORTS AND IMPORTS
NONPRODUCT INTERNATIONAL
EARNINGS
Tourism and transportation
Performance of services for a fee
Use of assets by others - Licensing
Agreements
© SUGIHARTO, SH.MM GICI Business School
j
INVESTMENTS - ownership of foreign
property in exchange for financial return
Foreign direct investment
Investor gains a controlling interest in
foreign company by joint venture or
mixed venture another option is
Portfolio investment

International Companies
the terminology
Strategic alliance
collaborative arrangement of critical
importance to the competitive viability of
one or more partners
Multinational enterprise (MNE)
© SUGIHARTO, SH.MM GICI Business School
j
LICENSING - official or legal permission
to carry on an activity
A permit from an authority to own or use
something, do a particular thing or carry
on a trade through agreement between
licensed entity (Licensee) and granting
authority

FRANCHISING - A marketing system
revolving around a two-party agreement,
whereby the franchisee conducts
business according to the terms
specified by the franchisor
Single franchise owner
Master franchisee
© SUGIHARTO, SH.MM GICI Business School
OPERATIONS AND INFLUENCES
External Influences

The Operations

PHYSICAL AND
SOCIETAL FACTORS

OBJECTIVES

Political policies and
legal practices
Cultural factors

Economic forces
Geographical
influences

Sales expansion
Resource acquisition
Diversification
Competitive risk
minimization
STRATEGY

© SUGIHARTO, SH.MM GICI Business School
OPERATIONS AND INFLUENCES
MEANS

External Influences
COMPETITIVE
ENVIRONMENT
Major advantage in
price, marketing,
innovation, or other
factors
Number and
comparative,
capabilities of
competitors

Competitive
differences by country

MODES
Importing and
exporting
Tourism and
transportation
Licensing and
franchising
Turnkey operations
Management
contracts

FUNCTION
Marketing

Finance
Production
Accounting

Overlying
alternatives

Choice of
countries
Organization
and control
mechanisms

Human
resources

Direct and portfolio
investment
© SUGIHARTO, SH.MM GICI Business School
MEASURING GLOBALIZATION

Note: # learn anything about Globalization, the
terms, the definition, and its History. Those will
be part on Final examination

Foreign Aid

POLITICAL ENGAGEMENT

Treaties
Organizations

Peacekeeping

ECONOMIC INTEGRATION
PERSONAL CONTACT

International Trade
Foreign Direct investment

Travel and Tourism
Telephone
Transfer Payment
Internet users

TECHNOLOGICAL CONNECTIVITY

Hosts

Secure servers
© SUGIHARTO, SH.MM GICI Business School
GLOBALIZATION Good OR Bad ?
Threats to national sovereignty
Economic growth and
environmental stress
Growing income inequality and
personal stress
Offshoring – transferring of production
abroad
is controversial in terms of who benefits
when costs are reduced and whether the
process exchanges good jobs for bad
ones
© SUGIHARTO, SH.MM GICI Business School
OPERATIONS AND INFLUENCES
The EXTERNAL INFLUENCES
Physical and societal factors
P O L I T I C A L that affect whether and how

International Business occurs

DOMESTIC AND
determines what managers can
I N T E R N A T I O N A L L A W do in International Business
ECONOMICS

determines The types of investment

G E O G R A P H Y determine location and availability of
world’s resources

© SUGIHARTO, SH.MM GICI Business School
OPERATIONS AND INFLUENCES
The EXTERNAL INFLUENCES
Physical and societal factors
To operate within a company’s
external environment, its managers
must have :
knowledge of business operations
a working knowledge of social
sciences ….

and how they affect all
functional business fields

© SUGIHARTO, SH.MM GICI Business School
The EXTERNAL INFLUENCES
OPERATIONS AND INFLUENCES Competitive environment

Varies by industry, company, and country
Strategies differ across companies
e.g., importance of controlling labor cost
e.g., influence of local and international competitors
Size of market differs across
countries
© SUGIHARTO, SH.MM GICI Business School
Risk Minimization

Evolution of Strategy in
International Process
PATTERNS OF EXPANSION
Passive to active pursuit of
International Business opportunities
– initially wait for foreign
opportunities
Limited to extensive modes of
operations – begin with
importing or exporting
operation

foreign operations viewed as
risky international commitments
evolve gradually

External to internal handling of
International Business – rely on
intermediaries at first
Few to many foreign locations
Similar to dissimilar business
environments

© SUGIHARTO, SH.MM GICI Business School
THANK YOU FOR LISTENING
1st Meeting
International Business
STIE GICI Business School

January 2014
Background image provide by
slide Factory
Closing theme by A ha
‘Stays on These Roads’

Presentation created by
Ace 013 Slides factory
© MCX 2014
© SUGIHARTO, SH.MM GICI Business School

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Intro to international business

  • 1. Presented by Sugihar to, SH. MM © SUGIHARTO, SH.MM GICI Business School
  • 2. International Business - all commercial transactions between two or more countries Involves modes of business that differ from those at the domestic level Foreign conditions diversity company’s external environment © SUGIHARTO, SH.MM GICI Business School
  • 3. International business consists of transactions that are devised and carried out across national borders to satisfy the objectives of : INDIVIDUALS COMPANIES ORGANIZATIONS © SUGIHARTO, SH.MM GICI Business School
  • 4. Causes the flow of ideas, services, and capital across the world Offers consumers new choices Permits the acquisition of a wider variety of products Facilitates the mobility of labor, capital, and technology Provides challenging employment opportunities Re-allocates resources, makes preferential choices, and shifts activities to a global level © SUGIHARTO, SH.MM GICI Business School
  • 5. Will an idea, good, or service fit into the international market Should trade or investment be used to enter a foreign market Should supplies be obtained domestically or abroad What product adjustments are necessary to be responsive to local conditions What are the threats from global competitors © SUGIHARTO, SH.MM GICI Business School
  • 6. © SUGIHARTO, SH.MM GICI Business School
  • 7. Expand sales greater purchasing power in the world as a whole Acquire resources of products, services, components also, foreign capital, technologies, information Diversify sources of sales and supplies, takes advantage of business cycle differences among countries Minimize competitive risk to prevent competitor from gaining advantages © SUGIHARTO, SH.MM GICI Business School
  • 8. EXPANSION OF TECHNOLOGY transportation and communication are quicker and less costly Liberalization of cross-border movements Government barriers reduced because: desire for better access to greater variety of goods and services domestic producers forced to be more competitive lowered trade barriers to their own exports Development of supporting services by business and governments to: © SUGIHARTO, SH.MM GICI Business School
  • 9. Development of supporting services by business and governments to: Ease the flow of goods and services sold abroad Reduce risks of International Business Increase in global competition, the firms have become more global to maintain competitiveness © SUGIHARTO, SH.MM GICI Business School
  • 10. j MERCHANDISE EXPORTS AND IMPORTS Are the most common international economic transaction, especially for smaller companies. And … Major source of international revenue and expenditures for most companies SERVICE EXPORTS AND IMPORTS NONPRODUCT INTERNATIONAL EARNINGS Tourism and transportation Performance of services for a fee Use of assets by others - Licensing Agreements © SUGIHARTO, SH.MM GICI Business School
  • 11. j INVESTMENTS - ownership of foreign property in exchange for financial return Foreign direct investment Investor gains a controlling interest in foreign company by joint venture or mixed venture another option is Portfolio investment International Companies the terminology Strategic alliance collaborative arrangement of critical importance to the competitive viability of one or more partners Multinational enterprise (MNE) © SUGIHARTO, SH.MM GICI Business School
  • 12. j LICENSING - official or legal permission to carry on an activity A permit from an authority to own or use something, do a particular thing or carry on a trade through agreement between licensed entity (Licensee) and granting authority FRANCHISING - A marketing system revolving around a two-party agreement, whereby the franchisee conducts business according to the terms specified by the franchisor Single franchise owner Master franchisee © SUGIHARTO, SH.MM GICI Business School
  • 13. OPERATIONS AND INFLUENCES External Influences The Operations PHYSICAL AND SOCIETAL FACTORS OBJECTIVES Political policies and legal practices Cultural factors Economic forces Geographical influences Sales expansion Resource acquisition Diversification Competitive risk minimization STRATEGY © SUGIHARTO, SH.MM GICI Business School
  • 14. OPERATIONS AND INFLUENCES MEANS External Influences COMPETITIVE ENVIRONMENT Major advantage in price, marketing, innovation, or other factors Number and comparative, capabilities of competitors Competitive differences by country MODES Importing and exporting Tourism and transportation Licensing and franchising Turnkey operations Management contracts FUNCTION Marketing Finance Production Accounting Overlying alternatives Choice of countries Organization and control mechanisms Human resources Direct and portfolio investment © SUGIHARTO, SH.MM GICI Business School
  • 15. MEASURING GLOBALIZATION Note: # learn anything about Globalization, the terms, the definition, and its History. Those will be part on Final examination Foreign Aid POLITICAL ENGAGEMENT Treaties Organizations Peacekeeping ECONOMIC INTEGRATION PERSONAL CONTACT International Trade Foreign Direct investment Travel and Tourism Telephone Transfer Payment Internet users TECHNOLOGICAL CONNECTIVITY Hosts Secure servers © SUGIHARTO, SH.MM GICI Business School
  • 16. GLOBALIZATION Good OR Bad ? Threats to national sovereignty Economic growth and environmental stress Growing income inequality and personal stress Offshoring – transferring of production abroad is controversial in terms of who benefits when costs are reduced and whether the process exchanges good jobs for bad ones © SUGIHARTO, SH.MM GICI Business School
  • 17. OPERATIONS AND INFLUENCES The EXTERNAL INFLUENCES Physical and societal factors P O L I T I C A L that affect whether and how International Business occurs DOMESTIC AND determines what managers can I N T E R N A T I O N A L L A W do in International Business ECONOMICS determines The types of investment G E O G R A P H Y determine location and availability of world’s resources © SUGIHARTO, SH.MM GICI Business School
  • 18. OPERATIONS AND INFLUENCES The EXTERNAL INFLUENCES Physical and societal factors To operate within a company’s external environment, its managers must have : knowledge of business operations a working knowledge of social sciences …. and how they affect all functional business fields © SUGIHARTO, SH.MM GICI Business School
  • 19. The EXTERNAL INFLUENCES OPERATIONS AND INFLUENCES Competitive environment Varies by industry, company, and country Strategies differ across companies e.g., importance of controlling labor cost e.g., influence of local and international competitors Size of market differs across countries © SUGIHARTO, SH.MM GICI Business School
  • 20. Risk Minimization Evolution of Strategy in International Process PATTERNS OF EXPANSION Passive to active pursuit of International Business opportunities – initially wait for foreign opportunities Limited to extensive modes of operations – begin with importing or exporting operation foreign operations viewed as risky international commitments evolve gradually External to internal handling of International Business – rely on intermediaries at first Few to many foreign locations Similar to dissimilar business environments © SUGIHARTO, SH.MM GICI Business School
  • 21. THANK YOU FOR LISTENING 1st Meeting International Business STIE GICI Business School January 2014 Background image provide by slide Factory Closing theme by A ha ‘Stays on These Roads’ Presentation created by Ace 013 Slides factory © MCX 2014 © SUGIHARTO, SH.MM GICI Business School