International business study notes

Foreign direct investments FDI occur when international companies make investments in factories, plants, and machinery in nondomestic markets.

Starting with the European colonization movement of the 16th century, and proceeding through the industrial revolutions of the 18th and 19th centuries, the spread of technology has jumpstarted modernization movements in many countries as scientific and technological advances have upgraded national lifestyles and aided efficient resource use.

There are, moreover, a number of fundamental problems with the basic PLC hypothesis itself.

theories of international business notes

Also, the theory does not explain why certain goods are cheaper in certain countries. Pre-trade relative prices in each country determine the range of possible terms of trade for the trading partners.

With reference to this case, discuss the failure of the governments, the Council for Leather Exports and the leather industry and the lesions of this case. An MNC is not dependent on the resource base of just one nation; it operates wherever and whenever conditions are favourable.

Evolution of international business management

Exporting is a traditional and well-established method of reaching foreign markets. Modern-day effects. Attributes could relate to economies of scale in production, marketing or organizational management skills; preferential access to finance or raw materials; or the use of a superior technology. Industrially advanced nations were thus able to export new products until such time that the products were produced by other low factor cost countries. Public tastes might have altered, or the product may be technically obsolete. Within national markets, former government-owned industrial monopolies such as airlines, telecommunications, energy, and utilities have been sold back into the private sector privatization , and their markets deregulated to allow companies to compete for market share and profits. Also, it develops a person's sensitivity to foreign cultures, values and social norms, thus enabling the individual to adopt broader perspectives and hence improve his or her overall managerial efficiency. A number of studies have also analysed the role of individual factors such as intellectual property rights, trade secrets, data bases, the culture of organization, etc. To remain competitive, large global firms benefit from having strong, efficient supporting and related industries to provide the inputs required by the industry. There is extensive advertising during the intro- duction, the aim being to create product awareness and loyalty to the brand. From the 6th century BC, the Silk Road, running from the Middle East to China, was a major commercial conduit carrying artifacts, metals, and semiprecious stones across Asia, as well as new ideas such as Buddhism and Islam. Likewise, the commercial policies aimed at restricting imports through tariffs, quotas, voluntary export restraints, import licensing, local content rules, restriction on outsourcing, escape clauses, etc. Local market demand conditions. Competition intensifies, and price cutting occurs until the product is no longer profitable for the foreign exporter to supply.

For ideas and technologies to travel, there had to be common means of communication between markets. Nowadays the great majority of large enterprises operate internationally as do an increasing number of small to medium sized firmsso that an awareness of the major issues in international business is a valuable asset for any manager in a company that deals with suppliers, customers, contractors, licensees, etc.

Types of international business slideshare

Why study international business? While the principle of comparative advantage as expounded by David Ricardo was couched in terms of technological superiority, the principle, when phrased in terms of comparing opportunity cost or relative prices of goods and services between countries is sufficiently general to encompass a variety of circumstances. Industry analysis and structure Business strategy involves identifying and exploiting the resources and capabilities of the firm in the marketplace for the purpose of gaining competitive advantage and superior financial performance. It takes more days of labour to produce both items in country 2 than in country 1, so that country 2 has an absolute disadvantage in the production of each item. This may boost or create a comparative advantage for the industry experiencing such economies of scale. It concerns the international movement of goods, capital, services, employees and technology; importing and exporting; cross-border transactions in intellectual property patents, trademarks, know-how, copyright materials, etc. An MNC is not dependent on the resource base of just one nation; it operates wherever and whenever conditions are favourable.

Global companies have invested and are present in many countries. In many cases a product's lifespan may be extended by skilful marketing. Wells advanced the theory that product life cycles explain the pattern of direct foreign investment in developing countries by western MNCs.

Unit — IV Foreign Exchange Markets: Determining exchange rates; Fixed and flexible exchange rate system; Exchange rate theories; Participants in the foreign exchange markets; Foreign exchange market — cash and spot markets; Exchange rate quotes; LERMS; Factors affecting exchange rates — spot rates, forward exchange rates, forward exchange contracts; Foreign exchange and currency futures; Exchange rate arrangement in India; Exchange dealings and currency possession; information and communication; Foreign exchange trades.

goals of international business
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